Question:
Make-Buy decision process
The make-buy decision is an important management prerogative. I am supposed to be a manager of a software organization that has an average software development cost of $20.00/LOC. I am supposed to be considering the purchase of a 5000-LOC software package that will cost $50,000. Initially, my technical staff indicates that no modifications will be required for the package to meet your specifications. However, my software development group wants to develop similar software in-house. Should I make or buy? After further study, my technical group now finds that at least 1000 LOC will have to be modified or added to make the package viable. Should I now make or buy? I am required to carefully state any assumptions I have made in making my decisions. The solution needs to contain elaborative description along with reference details please.