Which of the Following Items Should Not Be Considered When

question 65

Multiple Choice

Which of the following items should not be considered when evaluating a make-or-buy decision?

• A) The reliability of the supplier's delivery schedule.
• B) Quality of the supplier's product.
• C) Net book value (NBV) of the production equipment currently used to make the item in question.
• D) Contribution margin generated by an alternative use of the production equipment.
• E) Financial stability of the supplier.

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Definitions:

Generic Competitive Strategies

Frameworks proposed by Michael Porter that describe three potential strategies to achieve a sustainable competitive advantage: cost leadership, differentiation, and focus.

Competitive Advantage

A scenario or element that positions a business in a stronger or more favorable spot relative to its competitors.

SWOT Analysis

A strategic planning tool used to identify an organization's Strengths, Weaknesses, Opportunities, and Threats, to gauge internal and external factors affecting its objectives.

External Analysis

The evaluation of factors outside a business that can impact its performance, such as economic trends, competitive landscape, and regulatory environments.