When evaluating a make-or-buy decision,which of the following does NOT need to be considered?
A)alternative uses of the production capacity used to make the product or part
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 not relevant to the make-or-buy decision as it is a sunk cost that has already been incurred. Only costs that will impact future decisions should be considered. Alternative uses of production capacity, quality of the supplier's product, and reliability of the supplier's delivery schedule are all important factors in the decision-making process.

When Evaluating a Make-Or-Buy Decision,which of the Following Does NOT