Describe Make or buy decisions – with limiting factors and give illustrations

Describe Make or buy decisions – with limiting factors and give illustrations

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One reason for buying from another organization is the scarcity of the resources. A company may want to do more things than it has resources for and therefore it would be required to combine internal resources with buying externally to improve profitability.

A major decision to consider is how to increase the work between internal and external efforts. In situations where the company must sub-contract work to make up for shortfall in its inhouse capability its costs would be minimized where the marginal cost of buying is least for every unit of scarce resource saved by buying externally.

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Titany answered the question on October 12, 2021 at 05:54

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