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
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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!

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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.



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