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Compact case
Case
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Reference no. C-0766-E
Published by: IESE Business School
Originally published in: 2012
Version: May 2012
Length: 4 pages

Abstract

On the one hand, this case study is designed as a vehicle for understanding costs already incurred and opportunity costs at Fibertec. On the other hand, it addresses the decision of whether to close one of its departments and outsource it to an engineering company. In addition, this document allows for an analysis of what might be the best decision using different criteria (economic, level of risk, people involved, etc). To calculate the differential costs of the two options, one must take into account real savings and those that, as costs incurred, do not affect the decision since the costs are the same in both cases. Also considered are the opportunity costs for each option and for each potential savings.
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Abstract

On the one hand, this case study is designed as a vehicle for understanding costs already incurred and opportunity costs at Fibertec. On the other hand, it addresses the decision of whether to close one of its departments and outsource it to an engineering company. In addition, this document allows for an analysis of what might be the best decision using different criteria (economic, level of risk, people involved, etc). To calculate the differential costs of the two options, one must take into account real savings and those that, as costs incurred, do not affect the decision since the costs are the same in both cases. Also considered are the opportunity costs for each option and for each potential savings.

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