Final answer:
The 'make or buy' decision in supply chain management affects cost, efficiency, quality, and profitability. Companies like Amazon use economies of scale to maintain competitive pricing. The final answer to the impact of the decision to 'make' is likely increased profitability, despite potential initial cost increases. Option 4 is the correct answer.
Step-by-step explanation:
The decision to make or buy is a critical one in supply chain management and impacts many aspects of a company's operations. In the context provided, a major manufacturer must decide whether to produce components in-house or purchase them from an external supplier. The decision to 'make' signifies an integration of production, which has implications for the cost structure, efficiency, quality control, and profitability of the company.
Amazon, as an example, is a company that has achieved significant success partly due to its production model and ability to maintain a cost structure that allows them to offer competitive prices. Their ability to undercut competitors' prices, including shipping costs, suggests a highly optimized supply chain with a focus on efficiency and economies of scale. This takes into account the idea that a larger scale of production or a larger factory operates with lower average costs, compared to a smaller scale.
When the supply chain management department of the major manufacturer decided to 'make,' it could have done so anticipating increased efficiency, quality, and eventually, profitability—even if the initial costs might be higher than buying. The correct option in the final answer appears to be '4) Profitability', assuming the decision was made strategically for long-term benefits.