Suppose the break-even quantity in a make-or-buy situation, Operation Management

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Suppose the break-even quantity in a make-or-buy situation

Suppose the break-even quantity in a make-or-buy situation is 1.5 million units. The expected production quantity is 1 million units. In-house production incurs a lower fixed cost but a higher per-unit variable cost as compared to outsourcing. Then which option do you recommend, make or buy?

Make

Buy

Either

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Operation Management: Suppose the break-even quantity in a make-or-buy situation

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Operation Management: Suppose the break-even quantity in a make-or-buy situation

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