...vs. Buy Revisited Reassessing your company’s manufacturing strategy M ake or buy? The classic manufacturing question still has no easy answer. Amid signs of demand recovery, but with capital still limited and resources thinned by restructuring, top executives today are revisiting the issue. To come to the right make-or-buy decision, leading companies resist the temptation to “feed the beast.” Instead of focusing only on short-term gains, these leaders keep their long-term strategy and corresponding core competencies in mind. They adopt a clearly defined manufacturing strategy, and then adopt the right tactics that can lead to smart decisions and a competitive advantage. The trade-offs between making a product inhouse and buying it externally are well known to most senior executives. The “buy” approach— a manufacturer purchasing a necessary part from an outside source—frees up resources, reduces capital demands, increases flexibility and improves returns on capital employed, but in a tough market companies may seek to avoid potential quality concerns and supply risks. On the other hand, a “make” approach—developing and building that same necessary part internally—enables the company to utilize available internal capacity, absorb fixed costs and protect intellectual property, but it can lead to unnecessary complexity and divert time and attention away from highervalue activities. Choosing “make” simply because the capacity already exists, or “buy” to avoid...
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...New House Decision James Wilkerson XECO/212 Prof. Paul March 11, 2012 A New House Decision Buying a house is a decision that can have major consequences for someone if they buy at the wrong time. Purchasing a home is one of the biggest financial decisions that any one person can make. The strength of the economy can give you good information as to when to buy and when not to buy. Timing can be very beneficial for a buyer and understanding how to make the decision when to buy can have long term financial consequences for the buyer. In this case the buyer is me. When making a decision to buy a new house I will look at the principles people face tradeoffs, the price of something is what you give up to get it, rational people think at the margin, and people respond to incentives. While I want to buy a new house there are several different areas that I will look at before making the purchase. How much each home costs plays a role in my decision. It is important for me to live within my means of money so making the right choice will benefit me the most. Looking at new homes there may be two that are different in space, number of bedrooms, and price. I personally am looking for the most amount of space for the price that I can afford. I currently own the house that I have now and in order for me to buy it will have to be beneficial for me to give up what I have at the moment. I face tradeoffs of buying a new house verses...
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...Running head: ASSIGNMENT # 1: MAKE OR BUY METHODS Assignment #:1 Make or Buy Methods by Inas Ellaham PMAN 641 – Project Procurement Management Professor Michael Hagerman University of Maryland University College June 12, 2011 Table of Contents Introduction 3 “Make” or “Buy” Analysis 4 Conclusion 7 References 9 Assignment #1: Make or Buy Methods Introduction According to the PMBOK (2008, p. 321), “a make-or-buy” analysis is a general management technique used to determine whether particular work can best be accomplished by the project team or must be purchased from outside sources.” A number of factors could affect the make-or-buy decisions such as budget, scope, or time constraints; therefore, when making a decision project managers weigh the advantages and disadvantages of make versus buy options and their impacts on the project costs and project master plan date. This paper examines and assesses the “Make or Buy” methods by analyzing it because project managers rely on it when deciding as to whether to “buy or make”. The first section of the research paper will present a brief description of these methods, followed by an analysis, which will include the advantages and disadvantages of make versus buy by providing reasons and examples against each one of these 2 options. Finally, based on the analysis and the findings demonstrated and revealed in this paper, I will highlight in my conclusion key limitations and constraints...
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...Reggie Geiger Economics May 9, 2012 Final Project: A New House - Decision The first principle I would use in the decision to purchase a home. Would be the First Principal the Principal that people face trade off, when you make any kind of a decision to buy you always face tradeoffs. A Trade off is a decision to give something up so you can obtain another thing that you feel is more important in the long run after weighing the options. An example of a trade off to purchase a home would be the choice to downsize a car so that you can purchase the home of your dreams. Or if you have to work more hours to be able to afford your new home that would also be a trade off because you are giving up your time for the new home and time is one of the most important assets a person has. The next principle is the cost of something is what you give up to get it. This is similar to a trade off in the way that you are giving up something to get something, but with a tradeoff sometimes you can do less of the other and still have it, but when you give up something completely that is different. Things you might have to give up when purchasing a home would be going on a vacation twice a year. You might have to give up going on a vacation twice a year and reduce it to once a year. Even the little things can count when giving up something, like getting a cheaper brand of certain products and foods that will save you money. Another principle I am considering before buying the new home is thinking...
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...New House Sean Monahan XECO/212 07/31/2011 Phillip Post New House When buying a house I will have to consider many things about the pros and cons of either buying a house or renting a bigger apartment and which would better suit my financial situation at the time. Do I have the saving and financial stability to afford a home right now in today’s market? If I can afford a house what are my limits for payments and the new house price that I can afford? These are few of the questions I needs to think that would suit my situation. I will go over each of these in my paper explaining how to look at each of these things when buying a house. There are few principles that would come into play when thinking about buying a new house such People face tradeoffs. When buying a house I may have to give something’s in order to buy a house that I want. It may have to not go on that family vacation or even not go out every week to a dinner with my wife. I must look at the things that are things that I like or want to do and give them up for things that I need or need to do to get what I want. The second principles ties right into the same things as principle one, the cost of something is what you give up to get it. I need to look at what I am giving up and is it worth what I am going to get in return. In the third and fourth principles bring together another whole aspect of buying house also. Will it be beneficial to my family if I buy a house now or will it be better to wait for...
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...A New House Buying a new home is not to be taken lightly. Buying a new home is going to be one of the most important decisions a person or a couple will make in there live. To buy a home is not something a person does every day. Millions of Americans consider buying a home, is taking the next step in life. Make sure that it is the next step that you want to take. The decision to purchase a new home in today’s real estate market is a considerably difficult decision to make after weighing the advantages and disadvantages. The current real estate market dictates that today is a perfect time to buy a home as prices are low and interest rates are at all-time lows as well. The real estate market is typically broken into two markets; a buyer’s market and a seller’s market. In a buyer’s market, sellers stand to lose some ground in the bargaining process because a larger number of homes on the market offer buyers a wider selection of homes to choose from. In this situation, buyers have a comparative advantage over sellers because buyers can demand incentives from sellers to close the transaction or find another agreeable seller. When purchasing a home you need to ask a lot of questions before deciding to a home. Some of the issues would be readiness, financial, and emotionally ready to buy a new home. You must also look at your budget, like your income, savings, and insurance. You should make sure that when buying your home you are ready for the long haul, because...
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...Purchasing a new home is a major decision requiring a substantial financial outlay where the wrong decision could have long-term financial consequences. In addition, two principles that play a major role in this decision include principle number two the cost of something is what you give up to get it, and principle number three rational people think at the margin. In this essay, I will discuss each principal and the roles they play in the decision to buy a house. Furthermore, I will explain how these principals influence the marginal benefits and marginal costs associated with the decision to purchase a home (Mankiw, 2007). The role of principal number two the cost of something is what you give up to get it, puts in perspective what a person must give up to purchase a home. For example, most people have to give up frivolous spending to save money for a down-payment. This includes buying expensive groceries, going on vacations, and buying brand new vehicles. Generally speaking, people give up their normal spending habits and live below their means for a period to buy a home (Mankiw, 2007). Principle number three rational people think at the margin also plays a large role in the decision to buy a home. For instance, people do the best they can to achieve their goals given the opportunities they have. In the case of buying a home people will think at the margin and decide that buying a home is not only a place to live but an investment. Principal number two the cost is what...
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...The decision to buy a house should be an important, far reaching financial decision for any individual. Within this assessment I will show that a number of different economic principles are utilized in making the ultimate decision to purchase. Of course, some people may buy using a gut feeling or buy on a whim, but the educated economist will consider, at least, trade offs and the marginal cost and benefits involved with the purchase. Government incentives to purchasing a home would also be considered as well as the government’s control of the economy. This would cause the strength of the overall economy to impact any large purchase, especially one as substantial as a home purchase. After all, this could be the single largest purchase I could quite possibly ever make. I will take into account all of these areas in determining what the best course of action is for my individual situation at this time. Most people consider the trade offs required to purchase a home to beginning when the home is purchased. While there certainly are trade offs to be made after the purchase, there are several to be considered in just making this financial decision. Since almost all real estate loans require some down payment, trade offs begin when I start saving to buy a house. Decisions I would have to make like “Should I go on vacation or invest the money for my down payment”, begin long before the purchase of real estate. Current satisfaction versus long term satisfaction is the major trade off...
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...Technology & Information Management Individual Assignment Technology & Information Management Individual Assignment Introduction Furntown is in the business of furniture manufacturing and sales. The organisation is currently considering implementing a mobile application for customers. With this new software application problem comes the question on whether to build or buy. The acquisition decision is a difficult one due to many competing interests and the different factors that affect the decision. This report aims to highlight the differences between the build and buy decision by providing an outline of the advantages and disadvantages which are inherent of each and finally deliver a recommendation for the course of action that will be best for Furntown. The organization choosing the build or buy criteria would make such a choice depending on the size of the business, the complexity of its structure, the demands of its service and how its rendered. Applications differ in use according to how they are built to suit the organizations catered for. Small organizations usually use standardized commercially built software as they work efficiently for their model whereas bigger and more developed ones need specific software uniquely made for them to cater for the complex and more demanding models they serve. A budget of any organization also forms a fundamental basis from which this choice can be made. Buying an Application from commercial vendors is more cost effective...
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...plays a major role in your decision? * After reading the 10 principles, I think that 1 People Face Trade-offs, and 2 The Cost of Something is what you give up to get it are the principals that will play a major role in my decision to purchasing a new home. I say “People Face Trade-offs” because in order to buy a house I will have to make sacrifices and give up certain things I like to do so that I can spend that time researching and looking for the perfect home. I chose 2 “The cost of something is what you give up to get it” because not only will I have to sacrifice some of the fun things I like to do but I will have to refrain from spending money on unnecessary things like Starbucks in order to save money. Buying a house is a big step and it will take lots of time and money to close a deal on a house. From researching the right community, home, schools that are close by as well as the miles to and from work. It will take a lot of time. Not only will purchasing a new home take up time but also saving money will be a must. I will have to cut back on certain things and save every bit of cash that I can in order to buy the home that I want. That way when I finally find a house that I like I will have a good amount of money for a down payment. Then I will have to figure out what I will need to sacrifice in order to make the payments. 2. Provide an example for each about decision-making, interaction, and the workings of the economy. * Decision-making is the actions that...
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...as in how many links are present in their vertical chain. Adopting vertical integration for a firms means reduction of transportation costs as common ownership means closer geographical areas, the supply chain is more coordinated, barriers to entry are there making it hard for new firms to enter the market, core competency is expanded and access to uneasy distribution channels is gained. I think it can be in a firms interest to outsource its components from competitors rather than producing in-house because (Make Vs Buy Decision) this way the firms can gain economies of scale which is a good amount of saving in costs gained by the increased level of production (the firm being a supplier) whereas in-house production doesn’t gain much economies of scale as the demand would be little. The firm becomes obedient and efficient as they must follow the rules and efficiency as is in the entire market. Buying from the market improves flexibility but some disadvantages of the buy decision are the search costs, incomplete contracting which is transaction costs- under the contracts between parties only certain remedies are covered in case of unknown or unforeseen changes. That contract automatically becomes invalid, they must look into other measures resulting into additional contracting costs. For example, suppose a computer manufacturing firm has to deliver 50 computers to a retailer and they have a contract between themselves but the company is not sure whether they should install Windows...
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...A New House - Decision XECO/212 May 15, 2011 Don MacLean Axia College of University of Phoenix Much thought should be given and taken into account on whether to purchase a home. The decision to buy a home is a very big and important step that should be entered into very carefully. A new home purchase is one of the most significant decisions people will make in their lifetime. There are many factors that can affect one’s overall decision to buy a home. When people consider making the jump from renting to owning, sometimes they mistakenly consider only the cost of the rent versus the cost of the mortgage payment. Unfortunately, some people make the decision to buy a home without considering these factors. In order to determine how much housing I can afford, I must factor in many things such as location suitable for raising a child, savings, other debts, personal preference, and income. Therefore, I have decided to purchase a home and will apply some of the ten principles of economics to ensure I’m making the right decisions along the way. Utilizing some of the ten principles of economics such as people face trade-offs, the cost of something is what you give up to get it, and people respond to incentives will help shape my decision so the home buying experience can be a thought out process altogether. Other essential factors that must be included are the marginal benefits and marginal costs associated with buying a home. Purchasing...
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...major role in your decision? The cost of something is what you give up to get it. Buying a house is a big step to take and with it comes lots of responsible that you have to consider. This is where you find out that you will have to give up something’s in order to save for it. You have to budget yourself with everything you spend money on. Buying a house is something that will take some time to do, it’s not that easy to just say that you are going to buy a house and there it is. By knowing that this principle is a major role in buy a house then you are ready to give-up just about anything that spends money unwisely. • Provide an example for each about decision-making, interaction, and the workings of the economy. For decision-making; I came up with the idea of buying a house, because it would help since I’m starting a family and would help me in the long run of having my own home instead of renting. Many factor to go across. For interaction; is that I like the idea of owning my own home, being able to do whatever I want to remodel it or add to it. The working of the economy; this can help or it could hurt me by paying attention to what the economy is like and where is a good place to buy or where they are selling cheap. Know who leaves in the area and is there schools nearby. There is so much to look in to when the economy is involved. • Explain how that influences the marginal benefits and marginal costs associated with the decision to purchase a house The influences the...
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...The firm is the largest housing developer in Sarawak and always builds a lower cost houses. They decided to change their business strategy to build variety a type of houses. I am sure that I can do a batter research work than Mr. Abu. The article clearly stated that Mr. Abu only focus on Demographic and level of income of the responded in the Siburan area only. In the report Mr. Abu state where the most of the respondent only interest on the lower cost house and them not interest in purchasing the high cost because the house is too far from the town. To test the market demand I will created and implement some of the business strategies to see and make the research of the houses selling potential for Siburan area. The planning must consist of: I. Problem and Opportunities Identifying * House sales at Siburan are not give a positive feedback * The most of the responded actually from the lower income level * The firm stay with decision will not lower the houses price. II. Assessing Problem or Opportunities * The house demand in Siburan area is increase year by year. This is bases on the population growth. * The demand for lower cost house is high * The increasing number of population * The sudden rising of the property price III. Selecting and Implementing the Course of Action * Involve the government participate. These will equilibrium in the house ownership in the rural area by providing a financial loan from the local financial...
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...Decision Making Process Paper A huge decision I had to make in my life was the decision to buy another home and move to the state of Washington. I had previously purchased a home in the state of Oregon and was underwater so to speak on it. For me, the uncertainty and risk were the biggest decisions for me to face. The housing market was in a downward spiral and had my own decision making process to go through. Does homeownership, with its ongoing responsibilities, suit your lifestyle? According to "Realtor.com" (2012), you are ready to buy a home if you have a steady income that can be documented, have saved enough money for a down payment, will be able to pay other bills while keeping your mortgage payments current and are prepared to keep the home for at least five years” (para. 7). I struggled to decide if these were things I would be able to do, and the decision making process for me was answering each of these questions carefully and thoughtfully. The decision making process can be different depending on how you approach it. In the course textbook, the decision making process involves six steps; Identifying and diagnosing the problem, generating alternative solutions, evaluating alternatives, making the choice, implementing the decision, and evaluating the decision. (Bateman & Snell, 2011). If I was to use this process to make a decision to buy a house, I would identify that the problem was deciding whether to make the life altering decision to buy a house. I would determine...
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