Final answer:
The question is asking for the term describing the decision between developing an internal system or purchasing one from a vendor, which is known as a make-or-buy decision. This involves conducting a cost/benefit analysis and evaluating each option against specific constraints and criteria.
Step-by-step explanation:
The choice of developing an internal system or acquiring a software package from an external vendor is referred to as a make-or-buy decision. This decision-making process is crucial for organizations as it involves analyzing various factors such as costs, benefits, constraints, and criteria to determine the most efficient and economical solution. A cost/benefit analysis is often employed, where costs including money, effort, and other sacrifices are weighed against the benefits like money, time, experience, and other improvements. Additionally, each option is evaluated against a set of constraints and criteria to ensure the decision aligns with the organizational goals and resource capabilities.
The choice of developing its own system or acquiring a software package from an external vendor is also called a Make-or-buy decision. This decision involves considering the costs and benefits of developing the system internally versus purchasing it from an external source. It requires evaluating factors such as the company's technical capabilities, cost-effectiveness, time constraints, and long-term feasibility.