Explore BrainMass

Explore BrainMass

    Vendor Certification Programs, Make vs Buy

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need help with ideas so that I can put together a PowerPoint presentation with 12-15 slides that can be used for both internal purposes and when you meet with all of your vendors to kick off a vendor certification program.

    Assume the following information about a company:
    The company is currently assessing a make versus buy decision.
    The company currently makes product line "A" using proprietary technology. Its variable cost/unit is $10, and its fixed cost allocation of overhead based on producing 10,000/yr is $20/unit, for a total standard cost of $30/unit.
    The company also makes 3 other completely different and separate product lines on different equipment.
    The company has a quote from an outside vendor for this product A, for $18/unit.

    Given the data presented, what criteria would you use to evaluate the make versus buy decision that faces you?
    As a company's managers create the optimum supply chain, there are many criteria that must be weighed, and in some cases, trade-offs are made. List at least 5 trade-off type decisions that the firm's managers would have to make to establish the optimum supply chain. Include why it is a trade-off and the added information that you would need to actually make the best choice.
    The following is an example of a trade-off:

    Should the manufacturing plant be located closer to its raw material vendors or its customer base? Why?
    Make up a checklist that a company's vendor certification team should fill out when it visits a vendor prior to certifying them. What are the pros and cons of installing a vendor certification program?

    © BrainMass Inc. brainmass.com June 4, 2020, 4:05 am ad1c9bdddf

    Solution Preview

    I attached the tutorial, but I also included them below for your convenience

    NOTE: This is a tutorial which will guide you in creating the final paper which is 12-15 PowerPoint slides with notes (150-200 words) a slide.

    Below are suggestions on what you should put on each slide
    Slide 1
    Basic information about the case
    Make vs Buy Decision
    Variable cost per unit $10
    Fixed cost allocation of overhead $10,000 per year at $20 per unit
    Total standard cost per unit $30
    Purchase cost per unit $18

    In your notes, discuss how the fixed costs related to making the product in house is an irrelevant cost. What this means is whether the company decides to make or buy, it will still be spending $10,000 in fixed costs. We can therefore eliminate $10,000 in our ...

    Solution Summary

    The expert examines vendor certification programs for make versus buy decisions.