Which of the following best describes the aim of evaluating Make vs. Buy decisions?

The aim of evaluating Make vs. Buy decisions is fundamentally centered around ensuring cost-effectiveness and efficiency. In supply management, organizations routinely confront the choice of whether to produce goods or services internally (make) or to procure them from external suppliers (buy). The evaluation process involves a comprehensive analysis of various factors, including production costs, operational efficiency, quality control, and strategic alignment with the company’s core competencies.

By focusing on cost-effectiveness, organizations aim to minimize expenses while still fulfilling their operational requirements. Efficiency also plays a key role, as businesses must consider not just the financial implications but also the potential impact on productivity and lead times. A well-informed Make vs. Buy analysis helps ensure that the organization is leveraging its resources optimally, which can lead to a more competitive position in the market.

While the other choices touch on aspects relevant to managing resources and relationships with suppliers, they do not encapsulate the overarching objective of the Make vs. Buy evaluation. For instance, reducing human resource costs or maximizing outsourcing opportunities may be results of a broader decision-making framework but do not capture the dual focus on both cost and efficiency that characterizes effective evaluations in this context. Similarly, the idea of eliminating all external suppliers runs contrary to the principle of strategic sourcing,