Definition of
internal versus external sourcing
choice between making or buying needed item a decision on whether to produce goods internally or to buy them in from outside the organization. The goal of internal versus external sourcing is to secure needed items at the best possible cost, while making optimum use of the resources of the organization. Factors influencing the decision may include: cost, spare capacity within the organization, the need for tight quality and scheduling control, flexibility, the enhancement of skills that can then be used in other ways, volume and economies of scale, utilization of existing personnel, the need for secrecy, capital and financing requirements, and the potential reliability of supply.
www.qfinance.com