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Bus 105 Unit 4 Ip

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BUS105 Week 4 Individual Assignment

Abstract
This paper will go into detail about the three options given to manufacture the product from the scenario. I will evaluate the pros and cons of each form of manufacturing and then make a final decision on what type would be the most beneficial for this situation.

I have chosen to completely outsource production of the product to an outside company.
This option seems to be the most cost effective option starting out. The initial cost of buying machinery and other equipment as well as the cost of higher skilled employees to make the product and facilities for them to use is a very significant investment for someone starting out with limited funding. Outsourcing alleviates a lot of this initial investment by using an existing company to do the work. The most noticeable drawback of this type of business is that it tends to be more expensive to manufacture the product because the other company also needs to make a profit off of their time and effort invested in the product. Shipping cost could also present a problem if the company that is being used is located far away. Another major setback is that by outsourcing the work you also risk the quality of the product not being up to your standards if the other company is not on the same page on what is good quality and what is junk. The other options of taking complete control and having total in-house manufacturing or outsourcing some of the manufacturing and assembling the product in-house. In the current situation I do not feel that either of these options are the right choice. The initial investment is very high and if the product is not successful in the market then the potential loss is much greater. Since the business I chose is a sole proprietorship that could be devastating to the owners

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