FACTORSCONSIDER FOR MAKE AND BUY

1. Factors considered for deciding
Presented By :
Vinod Solanki
Make or Buy

2. Make-or-Buy Decision
 Make-or-Buy decision (also called the
outsourcing decision) is a judgment made by
management whether to make a component
internally or buy it from the market. While
making the decision, both qualitative and
quantitative factors must be considered

3. Major Factors considered for
deciding make or buy
o Quality
o Quantity
o Convenience
o Marketing

4.  Quality
If a company can create a product that is better
than the product which can buy from a vendor,
then it will make that product in-house, assuming
that charge a price high enough to justify the
materials and labor.

5. • Quantity :-
The volume of product that a company needs will
influence your decision of whether to make or buy
it. If there is need one jar of hot sauce, then it
doesn't usually make sense to fashion your hot
sauce from scratch.
However, sometimes a very large demand can
also be a reason not to make a product in house.
If an business uses tens of thousands of boxes to
package products, then it is often cost-effective to
contract to a company that can make them to a
custom size.

6.  Convenience
When an company is operating in high gear
meeting ongoing demand, it can be more
convenient to make products than to buy them.
However, if the vendor who makes a product that
need is in another country and can't deliver a
necessary item on short notice, it may be more
convenient to make that product.
The convenience of making or buying products
may change relative to the volume of business
you are currently transacting, and the amount of
surplus labor and space that you have.

7.  Marketing
Making products in house can be an important
marketing strategy. A clothes store that makes
and sells its own line of dresses offers customers
an added value and a strong brand. A restaurant
that makes its own sauces and dressings can
provide unique flavors.

8. Thank You