The decision to make or buy a good or service is:
A)a one-time decision never to be reconsidered.
B)a decision of strategic importance that deserves careful evaluation.
C)primarily an operational decision.
D)the same as deciding to insource or outsource.
E)typically made by the chief supply officer and his or her executive team.

Question

Quizplus · Accepted Answer

The decision to make or buy a good or service is of strategic importance that deserves careful evaluation because it can have long-term consequences for the company's financial performance and competitiveness. This decision involves analyzing the costs, risks, benefits, and capabilities of both options and considering factors such as core competencies, capacity utilization, quality control, intellectual property, and supply chain management. It is not a one-time decision, as changing market conditions, technological developments, or organizational goals may require a reassessment of the make-or-buy strategy. It is not exclusively an operational decision, as it requires input and approval from the top management and other functional areas, such as finance, legal, and marketing. It is related to but not identical with deciding to insource or outsource, as make-or-buy can refer to any type of production or service delivery method, whereas insourcing and outsourcing usually refer to in-house versus external sourcing. The chief supply officer may be involved in this decision, but it is not solely their responsibility.

The Decision to Make or Buy a Good or Service