Make or Buy Analysis
What's Inside the Make or Buy Analysis Template?
Details | 2 Sheets
Supported Versions | Excel 2007, 2010, 2013, 2016, 2019, Office 365 (Mac)
Category | Operations, Data Analysis
Tags | PMP, Build or Buy, Outsource
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Inside Our Make or Buy Analysis
A Make-or-Buy Decision (also known as Outsourcing Decision) Analysis is a quantitative analysis for deciding whether to produce something in-house or to outsource it to an external vendor.
This is one of our best popular operations and supply chain management templates. There are a few reasons why a company would explore making something internally that they previously outsourced.
1, Quality issues
2. Price increases
3. Product Modification
In the case of one or multiple of those events, a company would run a Make-or-Buy Analysis to help them determine the best path forward.
Start by inputting your Buy Info data in D10 and the following rows in that column. Info includes Item Purchase Cost, Ordering Cost, Order Quantity, Total Ordering Ordering Cost and Holding Cost. Once you input that data you will be given a TTL (Total) cost number.
Starting in D3, input your Forecast Demand Quantity, Direct Material Cost, Direct Manpower Cost, Machine Depreciation Cost, Variable Overhead Cost and Relevant Fixed Cost. That will spit out a TTL cost in D9.
The Make or Buy result will auto populate based on your inputs.
It will show you which decision you should make based off the quantitative analysis, the definiteness of the result and your cost per unit.
There are up to 8 models so you run multiple Make-or-Buy Decisions simultaneously.
On the right hand side of the template are too graphs that showcase the Priority of Make and Priority of Buy for each model.