Make A Product In-House Case Study

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Make or buy decisions help a construction company decide if it is better to produce a product in-house or buy a product from an outside supplier. There have some advantages of make a product in-house and buy a product from an outside source. According to Burt, Dobler, and Starling, as well as Joel Wisner, G. Keong Leong, and Keah-Choon Tan suggested that favor making a part in-house is save money based on the less expensive to make the part. If a construction company can lower its materials cost by making products in house, they will be had bigger potential to save their business money. A business should balance the savings on materials against the added payroll cost. It will help to see whether making products in house or outsource the production that makes the most financial sense. In addition, the advantages of making products in-house are to maintain a stable workforce in periods of declining sales. The construction company can decide to produce products in house if getting the requirement orders are down and reluctant to lay off employees. This decision not only can keep the workers employed, but also motivated and available as the company needs them. These benefits may outweigh a financial consideration such as a short-term elevated expense for production labor. The option to produce items in house allows the…show more content…
The construction company may decide to make if less expensive to make the products or do not have reliable suppliers. In contrast, the construction company may decide to buy if they faced lack of expertise or limited production facilities and insufficient capacity. Make or buy decision that make a sense for a company’s development in order to make the right decision in the long term. This decision making always an advantage to be able to choose among more than one option rather than simply accepting what is

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