Sharina, the plant manager, needs to decide whether to make or buy a component for the company core product. She would like the advice of her production supervisors, since they must implement her decision. However she fear that the supervisors will be biased towards making the component in house , as they tend to favour retaining more work for their people. What should Sharina do?
Sharina as a plant manager plays a role of rational decision making. She has to analyzing the problem, developing alternative solutions, selecting the best solution, converting the decision into action and ensuring feedback for follow-up. Sharina has to decide whether to make or buy a component for the company core product and discusses with the production supervisor which may bias to the option of making component instead of buying component. In this case, Sharina has to know the advantages and disadvantages of the alternative solution she had and choose the best solution.
First, Sharina shall analyze the cost for both making and buying the component for the company core product. In the consideration of the return on investment, an option of lower cost is definitely the best choice for the company. Typically, the cost of producing the component by the own company is cheaper than buying the component from other company.
The quality of a product represents a company’s image and also the prerequisite for the customers to choose and buy the product. Therefore, it is essential for the company to choose the best quality component by producing own component. During the component production, the quality control check can be carried out to ensure the quality of the components. It is important for her to include the quality of the component into decision making.
Besides, by consider in term of time, Sharina has to make sure that there is no delay in the plan. The delay of production of component may happen if they buy the component from other company. However, the time...
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