Your Firm Is Involved in a Make or Buy Decision

question 64

Essay

Your firm is involved in a make or buy decision for an important component of its single product.The quantitative analysis results in a small advantage for the buy option.Would you accept this alternative? Why or why not?

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Definitions:

Mutually Exclusive

Two or more events that cannot happen at the same time; the occurrence of one event precludes the occurrence of the other(s).

Nonzero Probabilities

Probabilities that are greater than zero, indicating that an event has a chance of occurring.

Sample Space

The set of all possible outcomes or results in an experiment or a random trial.

Experimental Outcomes

The possible results that can occur from a planned experimental procedure, each outcome being a unique result of the experiment.