In the make or buy decision, why is it that purchasing a component from a vendor may cost more than producing the component internally, even though the quoted price from the vendor is lower than the internal price?

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Answers (3)

maanoj 02-09-2012
maanoj - National Institute of Industrial Engineering
In this case, company will be paying to idle equipment and staff in the factory.
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mahmud 02-09-2012
mahmud - Jaypee University of Engineering & Technology
Because purchasing the component may cause idle equipment and staff in the factory that the company must still pay for.
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