You can put this solution on YOUR website!
If they continue to outsource the item, their total cost will be 5,000 X $20.
If they make the switches themselves, then it will cost:
$3 + $2 + $1 = $6 per switch times 5000 switches PLUS
$25,000 batch set-up PLUS
$37,500 salaries PLUS
$20,000 factory cost PLUS
$1,500 times 12 months lost lease revenue.
Add up all of the costs to make the switches themselves and compare it to the total cost of continuing to outsource. You can do your own arithmetic.