Which of the following does NOT need to be considered when evaluating a make-or-buy decision?
A)savings from an alternative use of the production equipment
B)the original cost of the production equipment
C)the quality of the supplier's product
D)the reliability of the supplier's delivery schedule

Question

Quizplus · Accepted Answer

The original cost of the production equipment is a sunk cost and cannot be recovered regardless of the decision to make or buy. Therefore, it does not need to be considered in the evaluation of a make-or-buy decision. The other options listed all potentially have an impact on the decision and should be considered.

Which of the Following Does NOT Need to Be Considered