Final answer:
The decision to purchase production materials from home or abroad is known as the sourcing decision. It is a strategic choice that involves evaluating cost, quality, and trade policies, and can be influenced by concerns over national security and the protection of domestic industries.
Step-by-step explanation:
The organizational decision to purchase production inputs, components, or finished goods from domestic or foreign producers is known as the sourcing decision. Sourcing is a strategic choice for companies that involves determining the most cost-effective and efficient location to produce goods or obtain materials needed for production. This could be at the national level (domestic sourcing) or from international suppliers (global sourcing). Companies must weigh various factors such as cost, quality, reliability, and the potential for trade restrictions when making a sourcing decision.
Additionally, factors like national security and the need to protect domestic industries can influence government policies on imports, potentially leading to restrictions on trade of foreign products. This is especially true for goods that are crucial for a country's security or are an intrinsic part of its national identity.