Question

Factors that may influence a firm's decision to buy goods rather than produce goods internally include a lack of in-house expertise, small volume requirements, a desire for multiple sourcing, and the fact that the item may not be critical to the firm's strategy. Additional consideration may be given if the firm has the opportunity to work with a company that has provided outsourced services successfully in the past and can sustain a long-term relationship (Kenton, 2019).

Additionally, most businesses make decisions not only about how many workers to employ at any given point in time (e.g., the amount of labor) but also about the scale of an operation (e.g., size of factory, office) to put together and which production processes to use. Therefore, the long run is defined as the time horizon necessary to not only change the number of workers but also to scale the size of the factory up or down and alter production processes as desired.

If you were a manager at Ford, what information would you need to make decisions about the production of a vehicle like the Ford Fusion? In your answer, please include information about number of employees, factory size, office space, production processes, and scale of operation.

Answer 1

Answer
Being a manager at ford, we should consider lack of in-house expertise, small volume requirements, a desire for multiple sourcing, outsourcing services in past, number of employees, factory size, office space, production processes, and scale of operation.
Any firm who want to produce internally and buy from outside should consider internal environment of organization and external facilities that are available to them. Production of vehicles should consider various factors like availability of raw material, expertise in using raw material , their optimum utilization, skilled and unskilled labor, working condition, quality control, production efficiency, no of workers as per the production process requirement in short and long run and Supervision and control of production facilities internally. We can also consider no of offices which are required to manager customer query and provide them solution to their problem.
We can also consider that facilities that are not available internally. We can take advantage of outsourcing where are efficiently managed by expertise external to organization.
We should also consider automation production process in which we can take advantage of advanced modern technology to produce desired level of vehicle.
We can increase the production volume as the demand of vehicle increase by setting up new factories and office as per desired location. We can also set location of factories and offices where supply of raw material and supply of finished goods to market can take place. We can also increase no of employees required as the production process demand and simultaneously we can open HR department to take care of the need of the existing employees and make other benefits to employees to make them loyal to company.
Scale of operation at various location may also increase to cater to demand of different areas. Production capacity of the plant should be used maximum to decrease the cost and increase the production volume that will bring maximum profit to company.