Make-or-buy decision

A make-or-buy decision compares internal production with external purchase on relevant future costs and benefits. Include avoidable production costs, supplier price, quality, logistics and any opportunity cost of scarce internal resources. Exclude unchanged common allocations. Consider capacity, supply reliability, knowledge, dependency and long-term consequences; the cheapest short-run option may not be strategically suitable. Under a limiting factor, rank internal production by the saving from making per unit of scarce resource.