Understanding the Make-or-Buy Decision in Business

Dr. Dhiraj Ovhal's lecture on the importance of the make-or-buy decision in businesses, detailing the factors influencing whether to purchase or produce goods/services. Exploring reasons for making or buying, cost considerations, technical skills, and manufacturing capacities. Emphasizing the significance of strategic decision-making in procurement processes.

• Make-or-Buy Decision
• Procurement Strategy
• Cost Analysis
• Outsourcing
• Manufacturing

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Uploaded on Oct 01, 2024 | 0 Views

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1. Welcome to all for the PSK Online lecture By Dr. Dhiraj Ovhal HOD of Commerce

2. PSK Purchasing & Store Keeping Chapter 4 :- Purchase procedure

3. Q.1 :-Make or Buy decision Meaning:- It means some time its advisable/ Prefer to buy certain things from outside because its easily and cheap cost instead of doing its own production. The reasons for Make:- Cost expand manufacturing activity Control over activity IPR Concern Reduce logistic cost Maintain secrecy The reason for Buy :- lack of technical skill Cost save Need small quantity No manufacturing capacity Brand preference

4. The reasons for Make:- Cost expand manufacturing activity Control over activity IPR Concern Reduce logistic cost Maintain secrecy

5. 2. The reason for Buy :- lack of technical skill Cost save Need small quantity No manufacturing capacity Brand preference

6. Make-or-buy Decision:- Make-or-buy is an important decision to buy some part of components from outside or manufacture in one's own plant. In some cases, a company may be able to make a required component more economically that it can buy it. On the other hand, a company can buy more effectively from outside than to make within own organization deciding whether a part should be purchased or manufactured is known in industry as the make-or-buy problem.

7. There are several occasions when a make-or-buy decision is taken. (a) Make or buy decision is always a valid concept in business. No organization should attempt to make something by their own, when they are able to buy the same for much fewer prices. That's why multinational companies outsource their requirements. (b) There are number of reasons a company would consider

8. Thank You

9. Attendance Link https://forms.gle/Xqvykv5vfEi1zpyF7 (Mention date at last point)