Now, in this episode and the next one, we will talk about make-or-buy decisions. So, we will study insourcing and outsourcing. We will see that the idea of relevance plays the key role here. So, this is the first part of the example. So, we talk about company XYZ that makes relays, standard or customized. So, we analyze costs. These costs are per 5,000 units. We put together the following table and then we see how that goes. So, this is the cost component. Then, this is expected total cost for 5,000 pieces. This is expected cost per unit, and we analyze this. Now, some components, so direct materials 45,000 and this is nine a piece. Then, direct labor, 10,000 or two a piece. Now, and then, there are some components of overhead. So, this is a variable overhead. That includes for example power, supply, and something, and this is 20,000 or four a piece. Then mixed overhead, and this is purchases, and orders, and others. So, this is 10,000 or two a piece. Then, finally, I will use that, I will put that in black. This is fixed overhead. That is, for example, depreciation, insurance or something else. So, this is $15,000 or three piece. So, we put together and get the total cost of $100,000 here or 20. Now, this is what we observe if we decide to make these relays on our facilities. Well, this doesn't tell us much, because we know that the cost is 20 per unit. But let's say that now, first of all, let's take a look at this and keep in mind this fixed overhead of three a piece that I put in black here. We will come back to that in just a minute. But what if there's another company, and this company is Alpha, Beta, or Gamma. That offers to sell relays to us at $18 per unit. Well, if we just look back at the table on the previous page, we remember, the cost for us is 20. So, it seems pretty tempting to accept this offer because for us, it must be the saving is $2 a piece. But, and the question is, should we accept? The initial temptation is to say yes. But we save on this, not 20 but only 17, because remember these fixed costs of three, these costs are irrelevant. Because regardless of whether we buy or we make that in our factory, these don't change. So, as a result, we can say that we do not accept. So, we save not 20 but just 17. This is irrelevant costs. Therefore, we decline the offer. Well, but is that it? If we accepted this offer and bought these relays, then our factory would be idle. But that means that we have some capacity to make something else. So, this analysis would be incomplete unless we also studied the following opportunity. We buy these relays from company Alpha, Beta and Gamma, and at the same time we use a fleed facilities to make something and sell it to another company. We start studying the market, and that actually leads us to the fact that what if we have this option to make something else? Now, in the next episode, we will make some assumptions and we'll analyze exactly this case. So, that will be the continued part or make-or-buy decisions analysis.