Make-or-Buy Analysis involves evaluating various factors such as cost, quality, resource availability, and other relevant aspects to determine the optimal production strategy.

Make-or-Buy Analysis aims to allocate resources effectively by determining whether a company should produce a component internally or purchase it from an external supplier.

Make-or-Buy Analysis involves comparing the total cost of producing a component internally (including material, labor, and overhead costs) with the cost of purchasing it from an external supplier.

Purchasing components from an external supplier often provides access to specialized expertise, advanced technology, and economies of scale, which may not be available internally.

For non-critical components, cost and quality may be the primary factors, while strategic considerations are less relevant.

Purchasing components from an external supplier may involve sharing sensitive information, leading to potential loss of intellectual property or competitive advantage.

While Make-or-Buy Analysis can lead to cost reduction, improved quality, and increased flexibility, it does not directly impact customer satisfaction.

The Make-or-Buy Differential represents the cost advantage or disadvantage of producing a component internally compared to purchasing it externally.

Production Capacity is a quantifiable factor that directly impacts the decision to make or buy a component.

Make-or-Buy Advantage refers to the cost benefit gained by producing a component internally due to excess capacity and lower production costs.

Supplier Reputation is a qualitative factor that can influence the decision to purchase components externally.

Make-or-Buy Disadvantage refers to the cost disadvantage incurred by producing a component internally due to lack of resources or expertise.

Increased Production Cost is not a risk associated with purchasing components from an external supplier, as the primary goal of Make-or-Buy Analysis is to minimize production costs.

Production Advantage refers to the cost benefit gained by producing a component internally due to lower production costs.

Purchasing components from an external supplier can offer reduced production costs, improved quality control, and access to specialized expertise.