Question

All of the following should be considered in a make or buy decision except:_______.a. cost savingsb. quality issues with the supplierc. future growth in the plant and other production opportunitiesc. the supplier will make a profit that would no longer belong to the business

Answer 1

Answer:

D. the supplier will make a profit that would no longer belong to the business

Explanation:

A make or buy decision can be defined as a strategic approach pertaining to making the choice to either produce (manufacture) a product in-house (internally) or purchasing the product from an external supplier. Thus, the make component typically deals with producing the product internally while the buy component strictly has to do with outsourcing or purchasing from an external supplier.

Some of the factors to be considered in a make or buy decision are;

I. Cost savings.

II. Quality issues with the supplier.

III. Future growth in the plant and other production opportunities.

Hence, all of the aforementioned should be considered in a make or buy decision except whether the supplier will make a profit that would no longer belong to the business.