CIC can contract out to another firm, JBM Enterprises, the marketing, distributing, and servicing of its units. This would save CIC $175,000 in monthly materials and labor costs. The cost of the contract would be $130 per machine sold for the average of 600 units sold per month. CIC uses value-chain analysis to study the effect of these options on its strategy and costs. The analysis is summarized in Exhibit 2.4 .