Flexcon produces pistons in three separate work cells, which differ according to the type of piston produced each cell has six numerically controlled machines in a u-shape layout, with a supervisor, a process engineer, a material handler, and 12 employees assigned across the three cells. Flexcon piston case study 5 because this cost analysis only represents two years, the decision to continue insourcing is one that will need to be revisited annually and a close eye kept on forecasted demand. Flexcon piston decision perform a quantitative insourcing/outsourcing analysis using the data provided what qualitative issues might affect your final decision identify any costs or issues that are not part of your analysis that might affect your decision.
Although flexcon expects greater piston volumes in years one and two compared with current demand, the team does not believe additional material economies are available flexcon spent $225,000 last year on other miscellaneous direct materials required to produce the pistons. Flexcon industries is a leading manufacturer of pressure vessels for the water well industry and thermal expansion and hydronic heating systems. Insourcing/outsoucing—the flexcon piston decision this case addresses many issues that affect insourcing/outsourcing decisions.
Flexcon piston case study 8 whenever a decision to outsource or insource is made, it is critical that a host of voices with experience and knowledge of various aspects of a company’s operations be sought out for. Flexcon piston piston introduction: in this topic am to explain the piston its working and uses a piston is a component of reciprocating engines, reciprocating pumps, gas compressors and pneumatic cylinders, among other similar mechanisms. Flexcon is known for their quality of pistons and by outsourcing this product they are giving their suppliers the opportunity to “buy in” into the business and take control of prices this would raise the outsourcing cost.
1- flexcon should keep its family of pistons in-house in fact, if it outsources its pistons, it will save money the first year- about $30,000 before tax and $18,000 after tax however, the second year, flexcon will lose a significant amout of money- about $124,200.
Insourcing/outsoucing—the flexcon piston decision this case addresses many issues that affect insourcing/outsourcing decisions a complex and important topic facing businesses today is whether to produce a component, assembly, or service internally (insourcing), or whether to purchase that same component, assembly, or service from an external supplier (outsourcing.
Flexcon is a $3 billion maker of small industrial engines that has been manufacturing high quality pistons for fifty years as demand for a broader line of products has increased over the years, flexcon has responded by broadening the product line and currently produces three different kinds of pistons. The piston insourcing/outsourcing decision flexcon is considering outsourcing production of all pistons that are part of the company’s “r” series of engines flexcon has machined various versions of these pistons as long as anyone at the company can remember.