MAKE OR BUY DECISION AS AN IMPORTANT TOOLS FOR PROFITABILITY IN MANUFACTURING ORGANIZATION. (A CASE STUDY OF GLOBAL SOAP DETERGENT INDUSTRY LIMITED, ILORIN).

ABSTRACT

        This project has been specially written to cover “make or buy decision as important tool for profitability in a firm” with particular reference to global soaps and detergent industries Ltd, Ilorin. The term “purchasing” is used in industry to denote the act of the functional responsibility for procuring materials, supplies and services.

        However, in a narrow sense an considering the topic make or buy decision as an important element for profitability, the term supply describes the process of buying and in a broader sense, the term determine the need, selecting the supplier, arriving at proper price, terms and conditions, issuing the order, follow up to ensure proper delivery.

        This project work is divided into five (5) chapters. Chapter one of this project discussed the introduction of the subject matter, statement of general problem, rational behind the study, scope and limitation of the study, historical background of the organization and definition of the term used.

        Chapter two contains details of different type of literature review on the subject of make or buy decision.

        Chapter three entails the research method used, instrument used in data collection, research population and sample size, sampling procedures used, statistical techniques used in presenting and analyzing data setting of hypothesis.

        Chapter four deals with presentation and analysis of data, interpretation of data, reason behind make or buy decision at global soap and detergent industries ltd, Ilorin, benefit of make or buy decision to Global soap, and detergent industries Ltd, Ilorin and testing of hypothesis.

CHAPTER ONE

1.1  INTRODUCTION

The decision to either make or buy material required for production processes and other purpose is very paramount most especially   in manufacturing companies such as global soap and detergent industry limited Ilorin. Many organizations consider it profit ability o manufacture (make) the material required in he house, if here are enough facilities to embark  on such, while the decision to make materials in house is considered wrong by some organization due to their lack of enabling facilities or simply says they are not aware of the benefits there in.

The decision has regard to make or buy should not be handling with levity. These is so because, failure to make appropriate decision here is the beginning of failure.  Many organizations are facing problems today just because they take the decision that is most profitable for their concern.   However this decision often seems to be taken as required by design, production and purchasing department.

In considering these decisions it is worth not things than 50% of company’s annual budget spends by the purchasing department, and millions of naira is   lost annually as a result of purchased items.  It would therefore be more economical to decide whether to make or buy material required.

• Cost :- the cost associated with manufacturing needs materials in house and the current cost f purchase, if material must be bought, it determine which one is cost effective.
• Availability of product capacity:- the firm should consider whether there is enough person machinery and technical know how that would be place then, the firm ma embark on “make” decision  and if otherwise, it has to locate right source a supply  form who to buy.