Ross Ayers

FlexCon Analysis

12/1/2019

After completing a quantitative insourcing/outsourcing analysis utilizing the provided

data, my team and I have concluded that outsourcing the manufacture of our “R” series pistons
would provide the company a net savings of approximately $2.4 million in operating capital.

This conclusion was reached using the provided tables and figures from analysis of
previous years production and provides projections for the next two years of production on both
sides with either insourced or outsourced pistons. As you can see from Figure 1, there are
substantial areas of opportunity within the insourced section of costs as well as heavy
expenditures specifically in the maintenance and repair of the machinery.

Figure 1.