Make or Buy Decision an Important Purchasing Tool and a Cost Control Technique in an Organization
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain how effective procurement of materials are being carried out within the ministry of finance
- To ascertain whether the ministry of finance have experience workers and qualified personnel for carrying out the activities efficiently and adequate usage of materials in order to achieve their effective results
- To know the role of supplier’s function play in ministry of finance
CHAPTER TWO
REVIEW OF RELATED LITERATURE
The Make or Buy Decision
Today’s businesses are running at global scale in a highly competitive environment. Hence quality at lower optimized cost is the need of the hour. Companies are continuously exploring ways to reduce the cost of an item. In the process the companies continuously deal with the dilemma of whether the item should be developed/made in-house or the same should be developed/made by an outside agency, which can develop the item at a lower cost and with better efficiency.
This has led to the phenomenon of outsourcing in companies, wherein companies have been exploring outsourcing many of their manufacturing and development activities to agencies which are more efficient in doing them and can deliver them at a lower cost per unit. Outsourcing has become an integral part of today’s manufacturing or even new product/service/solution development, so that they can focus on their core business function and can outsource many of their non-core functions.
This is where they undertake the make-or-buy analysis to decide whether the same work should be done in-house or should be bought from an outside agency by outsourcing. Cost becomes one of the major factors in doing make-or-buy analysis.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to Make or Buy Decision an Important Purchasing Tool and A Cost Control Technique in an Organization
Sources of data collection
Data were collected from two main sources namely:
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
DATA ANALYSIS
The data collected from the respondents were analyzed in tabular form with simple percentage for easy understanding.
A total of 133(one hundred and thirty three) questionnaires were distributed and 133 questionnaires were returned.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Make or Buy Decision an Important Purchasing Tool and A Cost Control Technique in an Organization
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of Make or Buy Decision an Important Purchasing Tool and A Cost Control Technique in an Organization
Summary
This study was on Make or Buy Decision an Important Purchasing Tool and A Cost Control Technique in an Organization. Three objectives were raised which included: To ascertain how effective procurement of materials are being carried out within the ministry of finance, to ascertain whether the ministry of finance have experience workers and qualified personnel for carrying out the activities efficiently and adequate usage of materials in order to achieve their effective results and to know the role of supplier’s function play in ministry of finance
. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of ministry of finance. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up directors, administrative staff, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
Based on the research conducted, it is found that the capacity is a significant factor influencing make a decision ‘of a part with a different mean values and standard deviation. To keep up with the increasing demand from the customers, respondents have to outsource some of its part/component to supplier maintaining the same quality standards and at less prices than in-house manufacturing cost of company, so that they can shorten waiting time and deliver the product on time. If production capacity reaches its limits shows that at lowest limits total cost increases with decrease in percentage of make parts, and at the higher limit the total cost decreases marginally, while the percentage of make parts increases. However, it may lead to loss in quality. It is leads to a poor capacity management implemented in the company. Therefore, respondents should plan, establish, measure, monitor, and adjust levels of capacity so that sufficient capacity is available to permit execution of the manufacturing schedules
Recommendation
It is important to transfer the best knowledge to the company in an effective way and make them aware of the importance of “Make or buy” decision in the future of their business.
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