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Space Engineering Co.: In-House vs Subcontracting - Maximizing Production Efficiency

This overview presents the different scenarios and considerations for Apex Space Engineering Co., specializing in space exploration vehicles and lunar atmosphere test equipment. The analysis includes in-house fabrication and subcontracting, cash flow diagrams, sensitivity analysis, and conclusions for optimizing production efficiency.

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Space Engineering Co.: In-House vs Subcontracting - Maximizing Production Efficiency

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  1. BUSINESS VENTURE TEAM 1 Brenda Watkins – Leader/Organizer Justin Legere – Leader/Organizer Chweya Masongo – Summarizer Jeffrey McCarthy – Techie

  2. OVERVIEW • SCENERIOS • IN-HOUSE • SUBCONTRACTING • CASH FLOW DIAGRAM • SENSITIVITY ANALYSIS • CONCLUSIONS

  3. SCENERIO APEX Space Engineering Co. • Specialization: Space exploration vehicles and lunar atmosphere test equipment. • 10 Year Contract with NASA for $11.9 million • 2 Projects Per Year

  4. IN HOUSE FABRICATION • Pros: • Complete Production Control • Tax Benefits • Cons: • Liability • Start-Up Cost • Overhead

  5. Sub Contracting: • Pros: • Pass on Liability • No Start-Up • Low Overhead • Cons: • Lack of Production Control

  6. In House Cash Flow:

  7. Sub Contract Cash Flow

  8. Sensitivity Analysis

  9. CONCLUSIONS • Sub contracting = low production • In House = High Production RESOURCES • http://www.abprocess.com/stainlessmarket.htm • http://www.ganeshmachinery.com/ • http://www.csupomona.edu/~rosenkrantz/egr403site/egr403projects.htm

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