Determine If the Following Scenario Warrants a Make or Buy

question 11

Essay

Determine if the following scenario warrants a make or buy decision.
$$\begin{array} { | l | l | } \hline \text { Buy } & \begin{array} { l } \text { An orgarization would like to venture into social } \\\text { analytics but has no experience or skills to begin } \\\text { the efforts. }\end{array} \\\hline \text { Make } & \begin{array} { l } \text { A retailer wants to upgrade its Web site bidding } \\\text { system; the bidding system is developed internally } \\\text { and it provides a strategic advarnage over other } \\\text { retailers. }\end{array} \\\hline \text { Make } & \begin{array} { l } \text { An irnovative approach to customized } \\\text { maruffacturing needs to be kept a secret; the hope is } \\\text { that this new process will suprise and shakeup the } \\\text { industry. }\end{array} \\\hline \text { Buy } & \begin{array} { l } \text { The internal website designer has linited } \\\text { availability and is always consumed by the } \\\text { marketing department. }\end{array} \\\hline\end{array}$$

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Definitions:

Linear Equation

An algebraic equation in which each term is either a constant or the product of a constant and a single variable.

Variable Cost Per Unit

Variable Cost Per Unit is the cost that varies directly with the production volume, including materials and labor directly involved in the production.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or sales activity.

High-low Method

The high-low method is a way of estimating the fixed and variable components of a cost by using the highest and lowest activity levels and their corresponding costs.