Make or Buy Decisions Pick an article (or more) from the literature that tells a

Question

Make or Buy Decisions
Pick an article (or more) from the literature that tells about a particular company’s outsourcing decision. There are many such articles.
An easy way to find such an article is to search an electronic database of business literature. Magazines that have published outsourcing articles include Wall Street Journal, Fortune, Forbes, Business week, and Strategic Finance. Many business sections of newspapers also include such articles. (Skyline University College Library has a good database – Use it to get required data)
Submit a report containing:
List as many details about the outsourcing decisions as you can. Include the type of activity that is being outsourced, the size of the outsourcing, and the type of company providing the outsourcing service.
Explain why the company decided to outsource the activity. If reasons are not given in the article, prepare a list of reasons that you think influenced the decision.
What disadvantages are there to outsourcing the activity?

Explanation / Answer

1)Outsourcing: it is purchasing goods and services from outside vendor rather than producing or providing services within the organization.

Decisions about whether services will insource or outsource are also called make-or-buy decisions.

before taking Make (manufacturing) or Buy (outsourcing) decision, the manager consider quality, dependability of suppliers, and costs are important.

2) With respect to quantitative aspects , the decision is based on incremental revenues and costs.if incremental revenues or more than the incremental cost, outsourcing can be accepted.

3) Disadvantage: with respect to qualitative aspects, the outsourcing has risk, as company depending on it suppliers, they may probably increases prices, poor quality and delivery performance.

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