Accounting › Section W · Short-term decision making › Topic W.3
Make or buy
Almost every product contains parts its maker could produce itself or buy from someone else. A supplier's quote often looks cheaper than the in-house cost per unit, but that comparison is only fair once you know which in-house costs would really disappear.
In this topic
- Outsourcing is a choice between alternatives
- What it really costs to make
- What it really costs to buy
- Worked example: chain guards at Halsway Bicycle Co.
- Freed capacity has value
- Worked example: putting the freed space to work
- Service businesses face the same choice
- Qualitative factors
- Common mistakes to avoid
- Key takeaways
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