Hazards When Analyzing Costs for Manufacturing Outsourcing Decisions

摘要

OUTSOURCING DECISIONS OF ALL SIZES place a premium on the availability of highly responsive cost information that reflects causal relationships of the operations and resources impacted. When this type of cost information is not available (which is a common occurrence), a common alternative is a situational business analysis of traditional financial statement accounting information. The problem with relying on situational analyses is that they rarely are done for small- to mid-range decisions because they take too long. Additionally, special analyses are subject to substantial variation based on the skill of the analyst.