Examining Make-or-Buy Analysis for Projects

Examining Make-or-Buy Analyses for Projects

 

Make-or-buy analysis is a technique that is used to analyze various parameters, such as cost of making versus buying, capacity (based on size) of making, legal eligibility of making, and technical feasibility of making and determining whether it will be better to produce a product or service in-house or procure it from an outside seller.

 

Make-or-buy decisions can significantly impact project time, cost, and quality. In the case of a buy decision, you must also consider if the product needs to be purchased, leased, or rented.

Make-or-buy analysis

 

Typical example…

 

A multimedia company was required to deliver several days of training to a client on the operation of its flagship product.

 

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The company’s project team had to decide whether to increase staff in order to develop the training material in-house or to outsource the work to a seller.

 

The company’s budget constraints and relative inexperience made it cost-effective to contract with an experienced outsource firm.

 

 

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