Make or Buy?
Abstract
There is always been a dilemma for the companies regards to either making the product in-house facility or buying the necessary products from the suppliers. In-house production, production costs, extra labor costs, monitoring costs, storage requirement costs, waste product disposal costs should be considered. However, when we look into products from the suppliers, product purchase price, sales tax charge, inventory holding costs, ordering costs should be considered as well. The decision is crucial for the companies regards to time and profit. Therefore, all the things should be analyzed step by step, then the decision can be given regarding to ease and profit. It can be divided into 4 stages such as planning, evaluation, analyzing, and selecting (1). After the decision has been made, there are different types of contracts that should be preferred and negotiated with the suppliers.
In this article, the main focus will be managing the steps regarding to make or buy decision. Different types of contracts with the suppliers are also going to be examined at the end of the article.
References
1) [file:///C:/Users/Mehmet%20Kalkoseler/Downloads/I_Jakomin_A_Make-or-Buy_Decision_Process_for_Outso.pdf]
