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Make-or-Buy Decisions

Choices about whether to obtain a required item from an external supplier or produce it within the organization.

Key Points

  • Compares in-house capability and capacity versus outsourcing to meet scope, cost, schedule, and quality needs.
  • Looks at total cost of ownership, including procurement, integration, operations, maintenance, and potential exit costs.
  • Evaluates risks such as supplier reliability, intellectual property, lead times, and strategic control.
  • Results feed the procurement management plan and may trigger solicitations or internal resourcing plans.

Example

A project needs a specialized analytics engine within four months. The team estimates that building it internally would take six months and require new tooling, while a reputable vendor offers a proven component with integration support. After analyzing cost, schedule, risk, and support, the team decides to buy the component and focus internal effort on integration and testing.

PMP Example Question

During planning, the team weighs whether to outsource a custom subsystem or develop it in-house to meet a tight deadline. What type of decision is this?

  1. Source selection
  2. Make-or-buy decision
  3. Contract type selection
  4. Procurement negotiation

Correct Answer: B — Make-or-buy decision

Explanation: The scenario is about choosing between external procurement and internal development, which defines a make-or-buy decision, not vendor selection, contract choice, or negotiation.

How To Land the Job and Interview for Project Managers Course

Take the next big step in your project management career with HK School of Management. Whether you're breaking into the field or aiming for your dream job, this course gives you the tools to stand out, impress in interviews, and secure the role you deserve.

This isn’t just another job-hunting guide—it’s a tailored roadmap for project managers. You’ll craft winning resumes, tackle tough interview questions, and plan your first 90 days with confidence. Our hands-on approach includes real-world examples, AI-powered resume hacks, and interactive exercises to sharpen your skills.

You'll navigate the hiring process like a pro, with expert insights on personal branding, salary negotiation, and career growth strategies. Plus, downloadable templates and step-by-step guidance ensure you're always prepared.

Learn from seasoned professionals and join a community of ambitious project managers. Ready to land your ideal job and thrive in your career? Enroll now and take control of your future!



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HK School of Management delivers top-tier training in Project Management, Job Search Strategies, and Career Growth. For the price of a lunch, you’ll gain expert insights into landing your dream PM role, mastering interviews, and negotiating like a pro. With a 30-day money-back guarantee, there’s zero risk—just a clear path to success!

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