Final answer:
Make-or-buy decisions are about choosing whether to produce components or services internally or to outsource them (option D). These business decisions involve a careful cost/benefit analysis and consider financial capital, strategic impact, and production methods.
Step-by-step explanation:
Make-or-buy decisions are decisions about whether or not to outsource value creation activities. Essentially, these decisions determine if a firm should produce a component or service internally or purchase it from an external supplier. These decisions involve considering the cost-effectiveness and the strategic impact on the business, taking into account factors like production cost, labor, quality control, capacity, and core competencies. By conducting a cost/benefit analysis, firms compare the marginal costs and marginal benefits to make informed choices.
These analyses extend to broader financial considerations, such as raising financial capital through different means, including early-stage investors, reinvesting profits, borrowing, or selling stock. Additionally, production decisions address other questions, such as what should be produced and how should goods and services be produced, factoring in resource scarcity and production processes.