of the Proposed Plant
The market potential for the proposed Gear Box Assembly Plant is based in the concept of the make or buy decision. In the past, standardized designs have made it feasible for the tractor production operation to buy gear boxes from external sources for production line installation. The shifting focus in tractor production, however, means that making specialized gear boxes at a corporate facility by assembling standardized components into a variety of configurations is now the most efficient means of providing the necessary gear boxes for the tractor manufacturing operation.
A decision by a firm to either fabricate internally a part or component used in one of its production processes, or, alternatively, to acquire that part or component from an external supplier is referred to as a make or buy decision. A firm must consider a number of factors, when approaching a make or buy decision. The factors which must be considered are both qualitative and quantitative in character.
In the realm of the qualitative, a firm may feel that, by producing parts and components internally, that it becomes less dependent upon suppliers, and that it can better insure a smooth flow of required parts and components. Potentially offsetting these advantages, however,
...