What Factors Must A Firm Consider While Addressing The Make Or Buy Decision?


1 Answers

Lily James Profile
Lily James answered

A firm must make a product when it has all the necessary resources to produce it. This is especially true when it comes to raw materials or materials used in production. The Make or Buy Decisher firsion is inherently dependent on what kind of benefits are associated.

A company can make a product when it has low cost raw material, cheap labor, all the machinery installed and excellent relations with the stakeholders. Whereas if all these issues pose a problem, the company must decide to buy that product. This way the home country would give an advantage to the firm by decrease in product quality and product prices.

Thus firm's having comparative advantage over the other firms must make the product to minimize cost and enhance value.

Answer Question