ProcessPlan and manage procurementeasy
A project needs a specialized component. The organization could build it internally, but doing so would require hiring and training staff for a capability it will not need after this project. What analysis should guide the decision?
- AA make-or-buy analysis comparing the total cost and risk of internal development against external procurement.
- BA cost-benefit analysis of the project as a whole.
- CA procurement audit of previous vendor performance.
- DA resource leveling analysis of the internal team.
Explanation
Correct answer: AThe decision to produce internally or acquire externally is made through make-or-buy analysis, weighing total cost, capability, and risk.
- A
- Correct. Make-or-buy analysis is precisely the technique for comparing internal development against procurement, including costs the organization would not otherwise incur.
- B
- A project-level cost-benefit analysis addresses whether the project is worth doing, not how to source one component.
- C
- A procurement audit reviews the procurement process after the fact and does not decide sourcing.
- D
- Resource leveling addresses scheduling of existing resources, not whether to acquire a capability at all.