What is make-up-to-buy decision?

Make-or-BUY's decision is a concept that is related to the types of business decisions that various businesses must make in terms of the issue of production of something itself. This concept is closely related to the concept of a competitive advantage, suggesting that it is a strategic advantage for businesses to focus on items that are best suitable for production. For example, a company in Florida, in the United States, should be relatively located to produce orange juice because of its close proximity to mass -produced oranges and the fact that it has developed competent methods for product extraction and production over the years. Assuming that a company that is located in an area that does not have the same advantages develops a unique recipe for the production of orange juice and decides to produce orange juice, it can outsource the production of the company's juice in Florida while concentrating on packaging and marketing product.

In this case, the company would use a decision on whether inYRABE or OUTSOURCING. Directly, the concept of make-or-BUY is related to items such as products that could have been developed by the company. For example, a company that specializes in the production of aircraft parts can develop a new type of part that requires a specialized type of production process that could prove to be off the easy reach of a development company. In this case, the company could consider its possibilities within the decision on make-or-BUY. The company may decide to outsource, because it would be cheaper to have part produced in another company that has specialization in mass production more efficiently.

To determine whether make-or-BUY decisions apply during cases related to the production of new products, the company would have to decide if the product in question is a product that includes the protection of business secrets, in which case the company would have to produce it independently, regardless of any costs. Another factor that could affect the wayDemonstration about outsourcing or production itself would be the size of the order. If the order size is too small, it can be too heavy or exaggerated to find another company to produce the product. The company could also decide to participate in the production of the product if it does not have much confidence in the outcome of the product by another company, even if it is cheaper for outsourcing production.