The make-buy decision is an important management prerogative. You are manager of a software organization that has an average software development cost of $20.00/LOC. You are considering the purchase of a 5000-LOC software package that will cost $50,000. Initially, your technical staff indicates that no modifications will be required for the package to meet your specifications. However, your software development group wants to develop similar software in-house. Should you make or buy? After further study, your technical group now finds that at least 1000 LOC will have to be modified or added to make the package viable. Should you now make or buy? Carefully state any assumptions you have made in making your decisions.
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