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Make or Buy Analysis.

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Presentation on theme: "Make or Buy Analysis."— Presentation transcript:

1 Make or Buy Analysis

2 Make or Buy Decision Use to decide if an operation should make an item from scratch or buy a ready-made version. Analysis helps to balance how much food a kitchen produces with the quality standards of the operation. Ready-made advantages: Consistency Reduced prep & labor costs Reduced needs of equipment & storage space. But ready-made products cost more money than items that must be prepared, and such items may also have other drawbacks. Decide what benefits you.

3 Reasons for making Cost concerns
Need of direct control over the product Quality control concerns Supplier unreliability Volume too small to get a supplier attracted Political and environment reasons Organizational pride

4 Reasons for Buying Lack of technical experience
Supplier's expertise on the technical areas and the domain Cost considerations Need of small volume Insufficient capacity to produce in-house Brand preferences Strategic partnerships

5 Make or Buy? : Tomato Sauce
Newman's Own Marinara Sauce 24-oz jar TOTAL: $2.99 PER 4-OZ SERVING: $0.50 Make your own: TOTAL: $4.06 PER 4-OZ SERVING: $1.02

6 Make or buy? Puff pastry Pepperidge Farm's Frozen Puff Pastry Sheets from Peapod Online Grocery TOTAL: $4.69 PER OUNCE: $0.27 Prep Time: 30 min. Homemade: 16 oz Package TOTAL: $2.00 PER OUNCE: $0.13

7 Make or buy? Chicken Stock
Swanson's Natural Goodness Chicken Broth TOTAL: $2.99 for 32 oz PER 1 CUP SERVING: $0.75 Homemade: TOTAL: $8.58 for (roughly) 4 qts. PER 1 CUP SERVING: $0.54

8 Make or buy? : Cheesecake
Sara Lee New York Style Cheesecake TOTAL: $8.49 PER SLICE (6): $1.42 Original Cheesecake from The Cheesecake Factory TOTAL: $23.95 PER SLICE (8): $2.99 Homemade: TOTAL: $13.13 PER SLICE (12): $1.09


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