MGT603 GDB

Answer
My decision as a manager would depend on the following factors:1) Capital Cost of investment in procuring additional machinery for producing tires2) Trained human resource availability and their cost3) set off of existing fixed cost due to in-house production4) save in time and cost for obtaining tires from subcontractorAs the quality will comparatively improve there would be no fear of compromising with quality and lost orders and as indicated overall cost would also reduce means resulting in additional contribution margin.As such I would recommend going for in-house production. As a manager of the firm I shall adopt Backward Integration policy since the cost of buying tires from the market is too high. This would give the firm a competitive edge by reducing cost and improving quality.
Answer
In this situation, firm needs that strategy which minimizes the cost by avoiding extra expense.Being a Manager, I ll adopt the Backward strategy. The backward strategy deals with suppliers and their issues. It increases the control over the suppliers, if they are too costly or unreliable. In this current case, Mr. Ali is bearing the extra cost to buy the tire from tire manufacturer, which is cause of high cost of production. Backward strategy is helpful to minimize the cost and maximize the quality and profit. It is also give the competitive environment to firm.