The make-or-buy decision typically would include considerations about:
The make-or-buy decision typically would include considerations about:
The make-or-buy decision is a strategic decision about whether a company should produce goods internally or purchase them from an external supplier. One of the key considerations in this decision is the total ownership costs, which encompass all costs associated with acquiring, using, and disposing of the product. These costs include production, storage, transportation, maintenance, and other life-cycle costs. Evaluating total ownership costs helps the company understand the full financial impact of either making or buying a product.
Total ownership costs go beyond the initial purchase price and include factors like production costs, storage costs, transportation costs, maintenance costs, and any other costs incurred throughout the life cycle of the product or component.