Module 2 Discussion Board: you will assume the role of an entrepreneur. You will create a fictional organization and consider some costing concepts as you create it.
First, compose a full paragraph that describes the organization. Be sure to include the name of your company, the product (or products) or services that it provides, and who your intended customer base would be. Think strategically about what you can offer that a customer base would see as valuable, and what basic business model would help you to be most profitable.
Once you have outlined the company and its goals, please consider and answer the following questions:
- Identify at least one fixed and one variable cost you will have in producing your product(s) or service(s).
- Identify at least one potential sunk cost.
- Identify a potential relevant cost decision you would have to make and explain which aspects of the decision might be relevant and which ones would not be relevant.
- Explain how opportunity costs could apply to one or more of your products and/or services.
- Identify at least one outsourcing decision in which you would “buy” and at least one outsourcing decision in which you would “make.” Keep in mind these can be not only production issues but issues related to how your business is structured. Explain the analysis you would use in arriving at an item you would “buy” and the analysis you would use in arriving at an item you would “make.”
Your initial posting should be between 300 to 400 words and use a minimum of three sources (one of which may be the textbook). Cite your sources and references using APA format (a tutorial is provided in the Class Tutorials Section of the course).
You will use two items to complete Part II. First, go back and review the company that you created for the Module 2 Discussion Board. Think strategically about the company, its products and services, and issues related to cost. Then, review the case study on Boeing (http://web.mit.edu/ctpid/lara/pdfs/abccasestudy.pdf) to understand how activity-based costing and activity-based management can impact managerial decisions within firms. Once you have completed these two activities, respond to the following questions in the space provided below. You should use source materials, citations AND references (in APA format) to help support your answers. Generally, 3-5 sources (or more) should be used. Remember to double space your answers as well.
Topic A (10 points) – Using the company you created in Module 2, if you were to conduct an ABCM pilot in the organization, then which stakeholders would be most likely to support the project? Which stakeholders would find the project threatening or problematic? Why?
Topic B (10 points) – Do you believe that make-buy decisions would be better, worse, or no different with an ABCM system in place? Why do you reach this conclusion?