Make Or Buy

When it comes to making goods or products, companies have to decide whether to produce them internally or outsource production to another company. This decision is called the make-or-buy decision. There are a few factors that go into this decision, such as cost, quality, and capacity.

intern vs. outsourced

What is the make-or-buy definition? The make-or-buy definition is the strategic decision of whether to produce goods internally or purchase them from an external supplier.

There are several key factors that come into play when deciding whether to make or buy something:

1)Cost: It’s usually cheaper to outsource production because you don’t have to invest in the infrastructure needed to produce the good yourself. You also save on labor costs as you only need to pay for the good itself, not for someone’s time to produce it.

2)tQuality: When you outsource production, you can choose a supplier who specializes in making that particular type of product. This usually leads to a higher quality product than if you tried to produce it yourself.

3)tCapacity: Producing goods internally takes up space in your facility and ties up employees who could be working on other tasks. If you don’t have the space or staff available, outsourcing production might be your only option.