Answer
I agree with the statement provided. When making the decision to produce a component part in-house or purchase it from an external supplier, cost considerations are essential. If the purchase price of the component is less than the total manufacturing cost per unit incurred when producing it in-house, it is more cost-effective to buy it externally. However, as mentioned, it's important to consider both financial and non-financial factors in the decision-making process, such as quality, reliability, and supplier performance.
Work Step by Step
I agree with the statement provided. When making the decision to produce a component part in-house or purchase it from an external supplier, cost considerations are essential. If the purchase price of the component is less than the total manufacturing cost per unit incurred when producing it in-house, it is more cost-effective to buy it externally. However, as mentioned, it's important to consider both financial and non-financial factors in the decision-making process, such as quality, reliability, and supplier performance.
