15-17 - 15-1715-29 (continued)Since the total incremental...

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Unformatted text preview: 15-1715-29 (continued)Since the total incremental costs of manufacturing the chucks ($3,025)is substantially below the cost of purchasing them ($6,500),manufacturing the chucks appears to be a good option.I would suggest that you request more detailed cost information fromLief about manufacturing chucks and other parts. Additionally, beforeyou cut off your supplier of chucks, I think it would be a good idea tosee if there are other options. For example, could additionaladvertising and reduced prices increase sales enough to gain back thelost business? I also think you should decide if manufacturing thechucks will be a permanent solution, or a temporary "fix." If it istemporary, will Woodchuck be able to reestablish a workablerelationship with its current supplier of chucks? If not, are thereother satisfactory suppliers?...
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