You work for Ford helping to build a car model for which the cup-holder may either be custom-made or a standardized design. Standard cup-holders are easily available on the aftermarket. Producing the custom-made cup-holder for this specific car model would require Ford to invest in the development of new molds that would have no value in any alternative use; they are only useful to this one car model.

 

If you, as a car designer, decide to go with the standard model, should Ford make it, or buy it from someone else? If you go with the custom-made cup-holder, should Ford make it, or buy it from someone else? Explain your reasoning

 

1.For the standard model;-

Ford should buy them from someone else;

Ford should buy standard model from someone because, they readily available and they perform the same function.

It will saves on time taken to develop it.

Buying them from someone else will cut cost of producing them this ensures that the company does not run at a loss.

2. For the custom made-cup holder:-

Ford should make it;

The custom may need contain some features which are not in the standard model. This will force Ford company to invest into its development.

Custom made-cup holder may require some alternatives/adjustments which may require changes. These are not available in the standard model.

Step-by-step explanation

If you, as a car designer, decide to go with the standard model, should Ford make it, or buy it from someone else? If you go with the custom-made cup-holder, should Ford make it, or buy it from someone else? Explain your reasoning

1.For the standard model;-

Ford should buy them from someone else;

Ford should buy standard model from someone because, they readily available and they perform the same function.

It will saves on time taken to develop it.

Buying them from someone else will cut cost of producing them this ensures that the company does not run at a loss.

2. For the custom made-cup holder:-

Ford should make it;

The custom may need contain some features which are not in the standard model. This will force Ford company to invest into its development.

Custom made-cup holder may require some alternatives/adjustments which may require changes. These are not available in the standard model.