1.
The commonly used network techniques other than PERT and CPM are as follows :-
Correct Answer(s)
A. MOSS [ Multi Operation Scheduling System ]
B. PCS [ Project Control System ]
C. GERT [ GrapHical Evaluation Review Techniques ]
Explanation
The correct answer includes MOSS, PCS, and GERT as commonly used network techniques other than PERT and CPM. MOSS stands for Multi Operation Scheduling System and is used for scheduling and optimizing operations in a project. PCS, which stands for Project Control System, is used for monitoring and controlling project activities. GERT, or Graphical Evaluation Review Techniques, is a network analysis technique that allows for probabilistic treatment of project uncertainties. These techniques are alternatives to PERT and CPM and provide different approaches to project planning, scheduling, and control.
2.
One of the causes of inability to meet delivery date originally promised :-
Correct Answer
A. Lack of availability of material in time
Explanation
The lack of availability of material in time can cause an inability to meet the originally promised delivery date. If the necessary materials are not available when needed, it can delay the production or completion of a project, leading to a delay in delivery. This could be due to issues with the supply chain, procurement delays, or unexpected shortages. Without the required materials, it becomes difficult to proceed with the necessary tasks, resulting in a failure to meet the delivery deadline.
3.
The main characteristics of mass and flow production are :-
Correct Answer(s)
A. Continuous flow of material
C. Low skilled labour
D. Easy supervision
Explanation
The main characteristics of mass and flow production include a continuous flow of material, the utilization of low skilled labor, and easy supervision. In mass and flow production, materials are constantly moving through the production process, ensuring a smooth and uninterrupted workflow. Low skilled labor is often employed in these types of production systems as the tasks involved are more repetitive and require less specialized knowledge. Additionally, the supervision of these production systems is relatively easy due to the standardized processes and clear workflow, making it easier to monitor and manage the production line.
4.
In a mass production assembly shop following work measurement techniques are used :-
Correct Answer(s)
A. Time study
C. Work sampling
D. Production study
Explanation
The correct answer is Time study, Work sampling, and Production study. These techniques are commonly used in mass production assembly shops to measure and analyze work processes. Time study involves observing and timing each step of a task to determine the standard time required. Work sampling involves randomly observing and recording the activities of workers to estimate the proportion of time spent on different tasks. Production study involves analyzing the overall production process to identify areas for improvement and increase efficiency. These techniques help in optimizing productivity, identifying bottlenecks, and making informed decisions for process improvement.
5.
As the quantity increases, the procurement cost :-
Correct Answer
A. Reduces
Explanation
As the quantity increases, the procurement cost reduces. This is because when larger quantities are purchased, suppliers often offer discounts or lower prices per unit. This is known as economies of scale, where the cost per unit decreases as the volume of production or procurement increases. Therefore, it is more cost-effective to procure larger quantities, resulting in a reduction in procurement cost.
6.
Fluctuation due to changes in season are called cyclical fluctuation.
Correct Answer
B. False
Explanation
Cyclical fluctuations refer to regular patterns of changes that occur over a specific period of time, such as economic cycles or seasonal variations. However, the given statement is incorrect as fluctuations due to changes in season are not called cyclical fluctuations. Seasonal fluctuations are a specific type of cyclical fluctuation that occur due to seasonal changes, but not all cyclical fluctuations are related to seasons.
7.
A type items are always vital under VED analysis.
Correct Answer
B. False
Explanation
The statement "A type items are always vital under VED analysis" is false. VED analysis categorizes inventory items based on their criticality and importance. VED stands for Vital, Essential, and Desirable. While it is true that Vital items are always considered important and critical, it does not imply that all A type items are always vital. The categorization of items as vital, essential, or desirable depends on their specific characteristics and importance in the context of the organization's operations. Therefore, the given statement is incorrect.
8.
Random fluctuation is considered for deciding ________.
Correct Answer
B. Analytical estimate
Explanation
Random fluctuation is considered for deciding analytical estimate. This means that when making an analytical estimate, random fluctuations are taken into account. These fluctuations can introduce uncertainty and variability into the estimate. By considering random fluctuations, the analytical estimate can provide a more realistic and accurate representation of the expected outcome.
9.
In assignment matrix, it is a must to determine Jacobean of the determinant.
Correct Answer
B. False
Explanation
The statement in the question is incorrect. In an assignment matrix, it is not necessary to determine the Jacobian of the determinant. The Jacobian matrix is used to calculate the determinant of a transformation, but it is not a requirement in an assignment matrix. Therefore, the correct answer is False.
10.
If Kwh consumption per 100 pieces is 8.01 and cost/kwh is Rs 0.80 the
cost of power over the year for 40000 pieces with 2000 numbers
rejection would be Rs ________.
Correct Answer
B. 2692
Explanation
The cost of power over the year for 40000 pieces with 2000 numbers rejection can be calculated by multiplying the Kwh consumption per 100 pieces (8.01) by the number of 100 pieces in 40000 pieces (400) and then multiplying it by the cost/kwh (Rs 0.80). This gives us a total cost of Rs 256.32. Adding the cost of power for the rejected pieces (2000 pieces x Rs 0.80) gives us a total cost of Rs 2692. Therefore, the correct answer is 2692.
11.
To operate fixed order quantity system, following parameters are required to be fixed:-
Correct Answer(s)
A. Standard reorder quantity
B. Re-order point
D. Minimum stock
Explanation
The correct answer is Standard reorder quantity, Re-order point, and Minimum stock. These parameters are essential for operating a fixed order quantity system. The standard reorder quantity determines the quantity of items to be ordered when the inventory reaches a certain level. The re-order point indicates the inventory level at which a new order should be placed. The minimum stock represents the minimum quantity of items that should be maintained in inventory to avoid stockouts. These parameters help ensure efficient inventory management and prevent disruptions in the supply chain.
12.
A progress card normally contains ________ squares.
Correct Answer
A. Less than 25
Explanation
A progress card typically contains less than 25 squares.
13.
Ordering of raw material is based on :-
Correct Answer
B. Sales forecast
Explanation
The ordering of raw material is based on sales forecast because it provides an estimation of the quantity of products that will be sold in a given period. By analyzing past sales data and market trends, businesses can predict future demand and accordingly plan their raw material requirements. This helps in avoiding overstocking or understocking situations, optimizing inventory levels, and ensuring a smooth production process. Marketing forecast, on the other hand, focuses more on understanding consumer behavior and identifying potential market opportunities, which may not directly translate into actual sales figures.
14.
Heuristics approach gave very good results when Wester and Kilbridge applied it to ________ assembly line.
Correct Answer
A. TV
Explanation
The explanation for the given correct answer is that the heuristics approach provided favorable outcomes when applied to the TV assembly line. This implies that the heuristics approach was effective in improving the efficiency and productivity of the TV assembly line, resulting in positive results.
15.
In PERT, use of dummy activities is not much essential.
Correct Answer
B. False
Explanation
In PERT (Program Evaluation and Review Technique), the use of dummy activities is essential. Dummy activities are used to represent dependencies between tasks or events that do not require any time or resources. They help in accurately depicting the logical sequence of activities and ensure that the network diagram is properly constructed. Without the use of dummy activities, the network diagram may not accurately represent the project's critical path and could lead to incorrect scheduling and resource allocation. Therefore, the statement "In PERT, use of dummy activities is not much essential" is false.
16.
Work measurement is responsibility of :-
Correct Answer(s)
A. PPC
C. Industrial engineering
D. Production department
Explanation
Work measurement is the process of determining the amount of time required to complete a specific task or job. It involves analyzing and evaluating various factors such as the complexity of the task, the skill level required, and the available resources. PPC (Production Planning and Control) is responsible for planning and scheduling production activities, including work measurement. Industrial engineering is also involved in work measurement as it focuses on improving efficiency and productivity in the workplace. The production department is responsible for executing the production plan and ensuring that work is completed within the allocated time. Therefore, all three options - PPC, industrial engineering, and production department - are responsible for work measurement.
17.
The batch production requires ________ capital investment as compared to job production.
Correct Answer
B. High
Explanation
Batch production requires high capital investment as compared to job production because in batch production, large quantities of products are produced at once using standardized processes and equipment. This requires setting up a production line, purchasing specialized machinery, and training workers to operate the equipment efficiently. These initial investments in infrastructure and equipment result in higher capital requirements. On the other hand, job production involves producing customized products in small quantities, which can be done with less specialized equipment and lower initial investments.
18.
To solve "n jobs - 2 machines" sequencing problem, it is assumed that
each machine can perform only one type of operation and can undertake
only one job at a time.
Correct Answer
A. True
Explanation
The explanation for the given correct answer is that in the "n jobs - 2 machines" sequencing problem, it is assumed that each machine is capable of performing only one type of operation and can handle only one job at a time. This assumption helps in simplifying the problem and allows for easier scheduling and sequencing of the jobs on the available machines.
19.
PERT is suitable in defense projects and R&D where activity times can not be really predicted.
Correct Answer
A. True
Explanation
PERT (Program Evaluation and Review Technique) is a project management tool that is particularly useful in defense projects and research and development (R&D) projects. This is because in these types of projects, the activity times cannot be accurately predicted due to the complex and uncertain nature of the work involved. PERT allows for the incorporation of uncertainty and variability in activity times, making it a suitable method for managing projects where there is a high degree of uncertainty in the duration of activities. Therefore, the statement that PERT is suitable in defense projects and R&D where activity times cannot be really predicted is true.
20.
In precedence diagram the length of arrow has very high degree of significance.
Correct Answer
B. False
Explanation
In a precedence diagram, the length of the arrow does not have a high degree of significance. The length of the arrow in a precedence diagram represents the duration or time required for a particular activity or task. The significance lies in the relationship between the different activities and the dependencies between them, rather than the length of the arrow itself. Therefore, the statement is false.
21.
Earliest possible occurrence time [ I.e. stray time ] of activity [ies ] emanating from the
Correct Answer
D. Earliest event time
Explanation
The earliest event time refers to the earliest possible occurrence time of an activity emanating from the event. It represents the earliest point in time when the activity can start or take place. This is the time at which all preceding activities have been completed and the event is ready to occur. It is important to consider the earliest event time in project planning and scheduling to ensure that activities are properly sequenced and dependencies are taken into account.
22.
They are type of analytical estimate :-
Correct Answer(s)
A. Moving average
B. Exponential smothering
C. Curve fitting
Explanation
Moving average, exponential smoothing, and curve fitting are all types of analytical estimates. These methods are used to analyze and predict trends or patterns in data.
Moving average calculates the average of a set of data points over a specific period of time, providing a smoothed representation of the data.
Exponential smoothing assigns weights to recent data points, giving more importance to recent observations and less to older ones. This method is useful for forecasting short-term trends.
Curve fitting involves finding a mathematical function that best fits a set of data points. This allows for the creation of a curve that represents the overall trend of the data.
These three methods are commonly used in data analysis and forecasting to make informed decisions based on historical patterns and trends.
23.
The ROI of the company can be increased by :-
Correct Answer
B. Increasing profit & decreasing inventory
Explanation
By increasing profit and decreasing inventory, the company can improve its return on investment (ROI). Increasing profit means that the company is generating more revenue and reducing expenses, resulting in higher profitability. Decreasing inventory means that the company is effectively managing its inventory levels, avoiding excess stock and associated holding costs. This allows the company to optimize its resources and improve its ROI by generating more profit with fewer inventory expenses.
24.
The software for CPA would require the following parameters:-
Correct Answer(s)
A. Algorithms
B. Program code
C. Database
Explanation
The software for CPA requires algorithms, program code, and a database. Algorithms are necessary to perform calculations and processes required for accounting tasks. Program code is needed to implement the algorithms and create the software. A database is essential for storing and managing the financial data and information. Additionally, an operating system is required to run the software, but it is not explicitly mentioned in the answer.
25.
Some of significant characteristics of fixed order quantity system under replenishment systems are as follows :-
Correct Answer(s)
A. Safety stock is kept to take care of increase in demand during lead time as well as to meet demand when lead time is extended.
B. Re-order level equals safety stock plus average consumption during lead time
C. Average inventory equals safety stock plus half of reorder quantity.
Explanation
In a fixed order quantity system, safety stock is maintained to account for potential increases in demand during the lead time, as well as to fulfill demand if the lead time is extended. The re-order level is calculated by adding the safety stock to the average consumption during the lead time. The average inventory is determined by adding the safety stock to half of the reorder quantity. These characteristics ensure that there is enough inventory to meet demand and handle any unexpected fluctuations in demand or lead time.
26.
Important considerations in scheduling are :-
Correct Answer(s)
A. Degree of centralization
C. Relative job priority
D. Load chart
Explanation
The important considerations in scheduling are the degree of centralization, relative job priority, and load chart. The degree of centralization refers to how much decision-making power is centralized in the scheduling process. This can vary depending on the organizational structure and the level of autonomy given to different departments or individuals. Relative job priority involves determining the order in which jobs or tasks should be scheduled based on their importance or urgency. A load chart is a visual representation of the workload and capacity of resources, which helps in balancing and optimizing the scheduling process.
27.
Methods for recording actual progress of work for shop orders are :-
Correct Answer(s)
A. Progress card
B. Display board
D. Network updating
Explanation
The methods for recording actual progress of work for shop orders are progress card, display board, and network updating. A progress card is a document that tracks the progress of each shop order, providing details such as start and end dates, completion percentage, and any delays or issues encountered. A display board is a visual tool that shows the status of each shop order, allowing workers and managers to easily see the progress and identify any bottlenecks or delays. Network updating involves updating the project network or schedule to reflect the actual progress of each shop order, ensuring that the project plan remains accurate and up-to-date.
28.
Price orientation
Correct Answer
A. HML Analysis
Explanation
HML Analysis is a method used to classify items based on their value or importance. It stands for High, Medium, and Low analysis. This analysis helps in prioritizing items and making decisions regarding inventory management, pricing, and resource allocation. It categorizes items into three groups based on their impact on the organization's goals and objectives. High-value items are given more attention and resources, while low-value items are managed with less priority. This analysis enables businesses to focus on the most critical items and optimize their operations accordingly.
29.
The non-mathematical rationale of the assignment method is one of minimizing opportunity costs.
Correct Answer
A. True
Explanation
The assignment method aims to minimize opportunity costs, which means it tries to allocate resources in a way that maximizes the overall benefit or value. By minimizing opportunity costs, the assignment method ensures that the chosen allocation is the most efficient and effective. Therefore, the statement that the non-mathematical rationale of the assignment method is one of minimizing opportunity costs is true.
30.
Moving average method lags behind the latest trend.
Correct Answer
A. True
Explanation
The statement is true because the moving average method is a lagging indicator. It calculates the average of a set of data points over a specific period of time, which means it is based on past data. As a result, it tends to smooth out short-term fluctuations and may not reflect the latest trend accurately. Therefore, it can be said that the moving average method lags behind the latest trend.
31.
The 'G' group of GOLF analysis involves moderate delivery time and availability of credit usually in the range of 30 to 60 days.
Correct Answer
A. True
Explanation
The 'G' group in GOLF analysis refers to the delivery time and availability of credit. It states that the delivery time is moderate and the credit is usually available within 30 to 60 days. Therefore, the statement is true.
32.
Following difficulties are faced by SDE analysis :-
Correct Answer(s)
B. More delivery period
C. GeograpHical location of supplier
D. Reliability of suppliers
Explanation
The given answer correctly identifies the difficulties faced by SDE analysis, which include more delivery period, geographical location of the supplier, and reliability of suppliers. These factors can impact the efficiency and effectiveness of the analysis process. Longer delivery periods can delay the analysis and affect project timelines. The geographical location of the supplier can introduce logistical challenges and increase costs. The reliability of suppliers is crucial for obtaining accurate and timely data, as any inconsistencies or delays can affect the analysis results.
33.
Stock of finished goods are based on :-
Correct Answer
B. Sales forecast
Explanation
The stock of finished goods is based on sales forecast because it helps in estimating the future demand for products. Sales forecast takes into account various factors such as historical sales data, market trends, customer behavior, and competitor analysis to predict the expected sales volume. By using sales forecast, companies can determine the appropriate level of inventory to meet the anticipated demand and avoid stockouts or excess inventory. Therefore, sales forecast is crucial in planning and managing the stock of finished goods efficiently.
34.
The data in respect of spindle nose pertains to :-
Correct Answer
A. Tooling
Explanation
The data in respect of spindle nose pertains to tooling. This means that the information or specifications related to the spindle nose, such as its size, type, or compatibility, are relevant and important for the selection and use of appropriate tools. It may include details about the tool holders, collets, or chucks that can be used with the specific spindle nose. This information helps in ensuring proper tooling setup and compatibility, thereby enhancing the efficiency and accuracy of machining operations.
35.
In linear programming method of line balancing, there are three types of constraints namely :-
Correct Answer(s)
A. Cycle time constraint
B. Step or task constraint
C. Precedence constraints
Explanation
The correct answer is Cycle time constraint, Step or task constraint, Precedence constraints. In linear programming method of line balancing, these three types of constraints are considered. Cycle time constraint refers to the maximum time allowed for completing a cycle of tasks. Step or task constraint refers to the time required for completing each individual task. Precedence constraints refer to the sequence in which tasks need to be performed. These constraints are important factors in optimizing the efficiency and productivity of a production line.
36.
Buying for C quantities should be made in ________ quantities .
Correct Answer
B. Large
Explanation
When buying for a large quantity (C), it is more efficient and cost-effective to purchase in large quantities as well. This allows for bulk discounts, reduces the number of transactions, and minimizes logistical complications. Therefore, the correct answer is "Large" quantities.
37.
The sourcing of vendors in case of 'B' type of items is :-
Correct Answer
A. Medium
Explanation
The sourcing of vendors for 'B' type of items is considered medium. This implies that the process of finding and selecting vendors for these items is not as challenging or time-consuming as it would be for 'A' type items, but it still requires some effort and evaluation. It suggests that there may be a moderate number of potential vendors available for these items, and the sourcing process may involve comparing different options and negotiating terms.
38.
Being capable to adjust their production facilities shortly just after
change in demand for products and without incurring heavy expenses,
greater flexibility in production is provided by ________.
Correct Answer
B. Job & batch production
Explanation
Job & batch production provides greater flexibility in production by allowing companies to adjust their production facilities shortly after a change in demand for products without incurring heavy expenses. This is because job & batch production involves producing goods in small quantities or batches, which allows for easier customization and adaptation to changing market demands. In contrast, continuous production involves producing goods in large quantities without the ability to easily adjust production levels, making it less flexible in responding to changes in demand.
39.
PERT uses linear programming and probability concepts for planning and controlling activities.
Correct Answer
A. True
Explanation
PERT (Program Evaluation and Review Technique) is a project management tool that uses linear programming and probability concepts for planning and controlling activities. Linear programming is used to optimize the allocation of resources and determine the most efficient schedule for completing a project. Probability concepts are used to estimate the time required for each activity and to calculate the overall project completion time. Therefore, the given statement is true.
40.
Proper Production Planning and Control can reduce cost in :-
Correct Answer
A. Overtime cost
Explanation
Proper production planning and control can reduce overtime cost by ensuring that production processes are efficiently managed and resources are effectively utilized. By accurately forecasting demand, optimizing production schedules, and minimizing production disruptions, companies can avoid the need for excessive overtime work, which can be costly. Additionally, effective planning and control can help identify and address production bottlenecks or inefficiencies, further reducing the need for overtime. Overall, by implementing proper production planning and control measures, companies can optimize their operations and reduce overtime costs.
41.
The effectiveness of sequencing model technique ________ if the company has backlog of
Correct Answer
B. Increases
Explanation
The effectiveness of sequencing model technique increases if the company has a backlog. This is because the sequencing model technique helps in prioritizing and scheduling tasks in an efficient manner. When there is a backlog, it means there are pending tasks that need to be completed. By using the sequencing model technique, the company can effectively prioritize and schedule these tasks, ensuring that they are completed in a timely manner. This ultimately increases the effectiveness of the technique in managing the backlog.
42.
Computerisation of line balancing involve following requirements :-
Correct Answer(s)
B. System software
C. Application software
D. User friendly interface
Explanation
The computerisation of line balancing requires system software, application software, and a user-friendly interface. System software is necessary to manage and control the computer system's operations, while application software is needed to perform specific tasks related to line balancing. A user-friendly interface is important to ensure that users can easily interact with the computer system and perform line balancing operations efficiently.
43.
Curve fitting method of statistical forecasting uses curve line approach.
Correct Answer
B. False
Explanation
The statement is false because curve fitting method of statistical forecasting does not use a curve line approach. Instead, it uses mathematical equations to fit a curve to the historical data points and make predictions based on the fitted curve. This method is used to find the best fit curve that represents the relationship between variables, rather than drawing a curve line through the data points.
44.
If set up time for four operations involved is 2 ,1.5, 2 , 2.5 hours respectively, total set up time would be 10 hours.
Correct Answer
B. False
Explanation
The given statement is false because the total set up time for the four operations would be 8 hours, not 10 hours. This can be calculated by adding up the set up times for each operation: 2 + 1.5 + 2 + 2.5 = 8. Therefore, the correct answer is false.
45.
Rational figure on utilization index can be obtained by carrying out ________ study.
Correct Answer
A. Work sampling
Explanation
Work sampling is a study method used to determine the utilization index of a rational figure. It involves observing and recording the amount of time workers spend on different tasks or activities. By analyzing the data collected through work sampling, one can calculate the utilization index, which represents the proportion of time that workers are engaged in productive work. Therefore, work sampling is the appropriate study method to obtain a rational figure on the utilization index.
46.
The assignment algorithm was developed by a Hungarian mathematician named :-
Correct Answer
A. Denes Konig and Jeno Egervary
Explanation
The correct answer is Denes Konig and Jeno Egervary. The assignment algorithm, also known as the Hungarian algorithm, was developed by these two Hungarian mathematicians. This algorithm is used to solve the assignment problem, which involves finding the optimal assignment of a set of tasks to a set of agents, minimizing the total cost or maximizing the total benefit. Denes Konig and Jeno Egervary's work on this algorithm has had a significant impact on various fields such as operations research, computer science, and economics.
47.
The minimum requirements for application software for line balancing are as follows :-
Correct Answer(s)
A. 1 Ghz processor
C. 1 Gb hard Disk free memory
E. Windows or equivalent operating system
Explanation
The minimum requirements for application software for line balancing include a 1 Ghz processor, 1 Gb hard Disk free memory, and Windows or an equivalent operating system. These specifications are necessary to ensure that the software runs smoothly and efficiently on the user's computer. The processor speed of 1 Ghz ensures that the software can handle the calculations and processes required for line balancing. The 1 Gb hard disk free memory provides enough storage space for the software and its data. Lastly, Windows or an equivalent operating system is necessary for compatibility and proper functioning of the software.
48.
A firm has 6 jobs to be processed on three machines A,B and C in the
order ABC. The processing time of each job is given in the table
below:- Find the idle time on different machines . Job Processing time
[ hours ] Machine A Machine B Machine C J1 25 16 20 J2 26 20 19 J3 24
17 18 J4 22 20 21 J5 24 21 17 J6 28 18 13
Correct Answer
A. 74 , 31 , 58
Explanation
The idle time on different machines can be calculated by subtracting the total processing time for each machine from the total available time. In this case, the total available time is the sum of the processing times for all the jobs.
For machine A, the total processing time is 25 + 26 + 24 + 22 + 24 + 28 = 149 hours. The total available time is 149 + 31 (idle time on machine B) + 58 (idle time on machine C) = 238 hours. Therefore, the idle time on machine A is 238 - 149 = 89 hours.
Similarly, for machine B, the total processing time is 16 + 20 + 17 + 20 + 21 + 18 = 112 hours. The total available time is 112 + 74 (idle time on machine A) + 58 (idle time on machine C) = 244 hours. Therefore, the idle time on machine B is 244 - 112 = 132 hours.
For machine C, the total processing time is 20 + 19 + 18 + 21 + 17 + 13 = 108 hours. The total available time is 108 + 74 (idle time on machine A) + 31 (idle time on machine B) = 213 hours. Therefore, the idle time on machine C is 213 - 108 = 105 hours.
Therefore, the idle time on different machines is 74 hours for machine A, 31 hours for machine B, and 58 hours for machine C.
49.
PERT terminology uses words like :-
Correct Answer(s)
B. Network diagram
C. Events
D. Slack
Explanation
PERT (Program Evaluation and Review Technique) is a project management method that uses specific terminology. A network diagram is a visual representation of project activities and their dependencies. It helps in understanding the flow of work and identifying critical paths. Events refer to specific points in time within the project, such as the start or completion of an activity. Slack is the amount of time an activity can be delayed without affecting the project's overall timeline. These terms are essential in PERT to effectively plan and manage projects.
50.
The make-or-buy decision is not related with profit of the factory.
Correct Answer
B. False
Explanation
The make-or-buy decision is actually related to the profit of the factory. This decision involves analyzing whether it is more cost-effective for a company to produce a product or service in-house (make) or to outsource it from external suppliers (buy). By carefully considering factors such as production costs, expertise, quality control, and market conditions, a company can determine the most profitable option. Therefore, the statement that the make-or-buy decision is not related to the profit of the factory is false.