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TexCarp Consulting: Tying Oneself up into Knots?
內容大綱
In May 2022, Rohan Jain, the second-generation entrepreneur of an Indian family-managed carpet design firm, TexCarp Consulting, had to decide whether to enter a new vertical with one of their biggest clients, American Carpets. The opportunity involved using technology and personnel to carry out virtual reality rendering for American Carpets so that the US-based company could showcase its products to clients in virtual space. Jain tried to convince his father to invest. But the technology involved high costs, and Jains’s father was opposed to the idea, since it would involve tying capital to fixed costs. But Jain could also convert the fixed costs into variable costs by either hiring technology or outsourcing the project. Should Jain go ahead with the VR rendering project? And if so, which of the three options should he select: buy, hire, or outsource the required technology and personnel?
學習目標
This case is suitable for undergraduate and graduate level courses. After working through the case and assignment questions, the students will be able to:<br><br><ul><li>Distinguish between various cost types and use tools such as regression or the high-low method to segregate semi-variable costs into fixed and variable components.</li><li>Assess the implications of specific cost structures.</li><li>Apply the relevant concepts of contribution, operating profit, and breakeven analysis for financial decision making.</li><li>Evaluate the operating leverage for a firm and analyze the implications of operating leverage.</li><li>Assess the impact of market trends on financial decision making.</li></ul>