Scenario A central government department, the Ministry of Food Hygiene (MFH), faces increasing pressure to cut costs, better manage suppliers’ performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology. External consultants were employed to conduct a feasibility study to identify options to address the problems, and the likely costs and benefits. The following options were considered: Do nothing. Re-engineer selected business functions. Outsource
A. The 10-year outsourcing contract, at current prices, will be worth £80m
B. Outsourcing would allow MFH to take advantage of the best services the outsourcing industry has to offer
C. The total expected savings over 10 years, at current prices, is £20m
D. The 10-year outsourcing contract will enable MFH to stabilize costs at agreed levels
E. The confirmed cost of the Outsourcing project is £2