When deciding whether to make a component internally or to outsource production, a company must:
When deciding whether to make a component internally or to outsource production, a company must:
When deciding whether to make a component internally or to outsource production, a company must evaluate the landed cost of the component. Landed cost includes all aspects of the cost associated with manufacturing or acquiring a component, including production, shipping, handling, and any other expenses incurred until the component reaches its intended destination. This comprehensive evaluation helps ensure that the decision is made based on the true cost and value implications rather than just the initial price or other isolated factors.
Correct Answer should be A. Before a firm makes a make or buy decision, they have to evaluate the landed cost of the product.
Why it is not A
The answer is A. Evaluate the landed cost of the component.
evaluate the landed cost of the component