Problem

If I were a manager at Anhueser Busch, to consider having someone else manufacture my products would take some thought process and contracts first depending on the product. The beer itself would stay inhouse due to the processes needed to produce the beer that way everything is under our own monitor and we dont have to rely on an outsourced vendor to match our standards within the beer business. I would consider as far as tshirt merchandise and such to be outsource to other vendors because i could more than likely buy in bulk and get a better deal on most things. Irrelevant cost on these items would be the shipping and distributing cost because they are there regardless and more than likely a set standard. The production cost could be fluctuate depending on the type of shirts, how many are being produced and how fast they are being produced. The sunk cost would be the shipping and distributing cost.

QUESTION :

Can you put your example of outsourcing t-shirts into a differential analysis? When making outsourcing decisions, it is is important to consider what costs would be incurred if produced in-house as compared to the costs if produced elsewhere.