In 5 pages and 2 parts this paper discusses a 'make or buy' corporate decision and the impact of reduct life cycles of products. Six sources are listed in the bibliography.
Name of Research Paper File: TS14_TEmakbuy.rtf
Unformatted Sample Text from the Research Paper:
or buy component parts that are used in the processes. There are advantages and disadvantages to either course of action. For any company to be successful in todays
market there is a need for resources to be maximised. Therefore when looking at this decision and decided whether the right course of action is to make or buy it
is the costs, both finite as a result of production, and opportunity costs that need to be considered, along with the asset base that is held by the company (Hegji,
2001). If a company chooses to make components there are several advantages that may be realised. They will have a greater degree of control over the parts they are using,
being able to amend and adjust them specifically as needed as well as control the costs. If there are large fluctuations in the demand for the parts this may also
mean the company is more able to respond to those changes. The company may already have the correct assets to use in the manufacture, and create further value, as
the increased workload will not incur all of the normal costs, as many of the fixed costs are already being paid, and therefore the increase in cost is marginal,
such as increased labour costs as well as the raw materials. This may save money, give a higher level of control and be more attractive. However, there are also disadvantages.
If a company seeks to make the parts rather than buy them in they may find that they are becoming less focused, moving away form the core competences (Schwarzwaelder, 2001).
This will mean a learning curve will be in place, which could be quiet steep if they have not made these parts before. There may be production problems, al of