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M9-06 lecture
M9-06 lecture
Scenario analysis defined
Scenario analysis defined
Scenario analysis is the process of evaluating future events by considering potential outcomes. It does not try to predict one possible outcome, but rather presents a range of alternative outcomes to arrive at the expected impact.
Example: The case of potential tax rate scenarios
Example: The case of potential tax rate scenarios
Make or buy: Making outsourcing decisions
Make or buy: Making outsourcing decisions
Many experts believe a company should outsource any process or function that is not part of its core competency (what it does best and where it competes in the market). For example, Apple designs iPhones, but outsources manufacturing to companies like FoxConn.
How do companies decide whether to outsource or manufacture in house? They perform make-or-buy analyses, which are a type of what-if analysis that involves the question of whether to manufacture a product in house or to purchase it externally.
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