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Prepared For: Ms. Nimat Zarin Prepare By: Name: Emran Rahman Shawon ID: 1610478 Course ID- ACN202 Section: 01 Program- BBA Submission Date- 27/12/2020
Ten Alpina Tools: The Entrepreneur’s Dilemma Alfred Nanni, Paul Juras Q.1. Giulia is clearly intrigued by the options that have just opened for her. If she were to accept the customer contract offer and take over the forge, how would her business model change? (Be sure to address as many dimensions of the business model as possible, but particular attention to the two primary financial decisions- revenue stream and cost structure). Answer: Her revenues will not be changed as the production alternatives have no observable effect on revenues. The costs would be substantially different under the insourcing/outsourcing models. Current outsourcing model: Costs = $9.00 + $1.45 = $10.45 per piton; all costs are variable. Proposed insourcing model Variable costs: Material $1.45 Supplies (110/1000) $ 0.11 Electricity ((1962-1908)/(1300-1000)) $ 0.18 Total per year Fixed Costs: Labor $ 345,000 Building & maintenance cost $ 33,000 Depreciation $ 14,355 Electricity $ 20,736 Administrative cost $ 7,200 Total per year Q.2. Using Stanley Kowalchecks operating costs as your best guess data about the cost of $ 1.74 $ 420,291

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