Buy Analysis in It Procurement Article Review

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This can be done by preparing a written document that outlines procurement agreement with the supplier.

The article suggests that in "make" decision, the costs of production are borne by the buyer. In the "buy" decision, the seller bears all the production cost. However, there are not only the production costs involved in making a product. The article did not mention that there are research costs associated with production as well (Li, 2013). A company producing electronic goods or mobile phones will need months or probably years of research before it finally produces the product. In buy decision although the buyer pays more than the production cost, the full expense of R&D is not paid by every buyer but it is distributed among other buyers too.

The authors say that the make-or-buy decision is based on what is the scope of the firm. However, it should be mentioned that not only the present scope counts, the firm's future plans have an impact on make-or-buy decision too. An it company may be concerned about its security and privacy concerns, hence it may like to make rather than buy, however, this may be an expensive procedure at the beginning.

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Tadelis and Bajari (2011) give a simple plan where the procurement management issues tender, negotiates with the supplier and gets the products. However, there are multiple complex levels involved and there are more than one phases of negotiation and consideration after which the buy decision completes.

The article mainly focuses on the economic sides of the make-or-buy decision. The article, therefore, fully incorporates factors like cost and financial involvements but the security concerns and the privacy issues make the procurement decision much more complex than it seems otherwise......

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