CIPS Supplier Relationships (L4M6) Practice Test

Question: 1 / 400

What decision process involves determining what to produce in-house or buy from suppliers?

Outsource decision

Make or buy decision

The correct answer is the make or buy decision. This decision process centers around whether an organization should produce goods or services internally (in-house) or purchase them from external suppliers. It involves a careful analysis of various factors, including costs, capabilities, resource availability, quality considerations, and strategic alignment with the organization’s overall objectives.

In the make or buy decision, organizations evaluate their own production capacities and the potential benefits and drawbacks of relying on external suppliers. This analysis helps determine which option would be more advantageous, particularly in terms of financial implications and overall efficiency.

By clearly understanding this decision-making process, individuals in procurement and supply chain roles can make informed choices that align with the organization’s goals and optimize resource utilization, ultimately leading to better supply chain performance.

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Procurement strategy

Supply chain decision

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