This is a question on make or buy scenarios. Should a manufacturer consider outsourcing a component if the manufacturer has idle capacity, or should they always make the product in this instance? Th

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

This is a question on make or buy scenarios. Should a manufacturer consider outsourcing a component if the manufacturer has idle capacity, or should they always make the product in this instance? Thanks!

Expert Solution
Step 1

What Is a Make-or-Buy Decision?
A make-or-buy decision is a demonstration of picking either fabricating an item in-house or buying it from an outer provider. Additionally alluded to as an outsourcing decision, a make-or-buy decision contrasts the expenses and advantages related and delivering a vital decent or administration inside to the expenses and advantages associated with employing an external provider for the assets being referred to. To think about costs precisely, an organization should consider all angles with respect to the securing and storage of the things as opposed to making the things in-house, which might require the acquisition of new hardware, just as storage costs.



steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Aggregate planning
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.