Hello I need help to commenting on this discussion. 50 word to reply/comment to

Question

Hello I need help to commenting on this discussion. 50 word to reply/comment to what my classmate have post below in " ".

Topic: More to Make Buy? In this module, we learned how to evaluate a make / buy decision based on lowest total cost. What are other important factors that should be considered when evaluating this type of decision?

"I believe that it is important to consider the lowest cost, though the constraints of your own business should also be taken into consideration. For instance, it might be slightly cheaper to create in-house products than to purchase from an outside source, but that might not be the best use of those employees' time. It might turn out to be more efficient if you decide to purchase from an outside company and then tell the employees who would have been working on an in-house product to work on something else. That way you don't have to focus on mundane tasks and you are better utilizing everyone's skills. While it might technically be cheaper to send your workers on a task, it might turn out to be more efficient all around in the long-run. You can also consider quality and branding issues. If you are simply unable to do something as well as another company, it is better to cut your losses and hand the task over to them rather than straining your own resources to save money."

Explanation / Answer

It is true that the cost is an important consideration before going for a make or buys decision. But, a firm should also focus upon its core competencies, competitive advantages as well as the learning curve of the business. In the beginning, going for a buy decision may be an attractive proposition, but, it can lead to the manipulation at the end of supplier and quality issues. Also, high price can be quoted by the supplier after some time. Within the mean time, valuable manpower will leave the firm for opportunities elsewhere and firm will face the challenges of survival and sustainability. Thus, firm should be careful in negotiation and they should maintain their core competencies with themselves that will help them to gain market share instead of single focus on cost.

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