Use of third party change with productivity of new employees

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Reference no: EM131368788

FlexMan has identified a third party that is willing to produce routers and switches as needed. The third party will charge $6 per router and $4 per switch. Assume all other data as in Exercise 4 (pg. 228 of our textbook, sixth edition!), except that hiring and layoffs are allowed as in Exercise 5.

a) How should FlexMan use the third party if new employees provide only 50 percent productivity for the first two months?

b) How should FlexMan use the third party if new employees are able to achieve full productivity right away?

c) Why does the use of the third party change with the productivity of new employees?

Reference no: EM131368788

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