If an Incremental Make or Buy Analysis Indicates That It

question 204

True/False

If an incremental make or buy analysis indicates that it is cheaper to buy rather than make an item management should always make the decision to choose the lowest cost alternative.

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Definitions:

Maximize Contribution

A financial strategy or goal to increase the difference between total sales and total variable costs to maximize the profit contributed towards fixed costs and earnings.

Unbounded Maximizing

A type of optimization problem where the goal is to find the highest possible value of an objective function without upper limits.

Constraints

Limitations or restrictions that affect the performance, capability, or efficiency of a process, system, or project.