Factors Affecting Make-or-Buy and Pricing Decisions in Jordanian Manufacturing Companies

Ahmad H. Daher, Abdul Naser I. Nour

Abstract


The aim of the study is to determine the factors affecting make- or – buy and pricing decisions in Jordanian manufacturing companies. In addition, this study is designed to show the degree of variation among these factors, based on the size and expertise of the corresponding companies. Another objective of this study is to test for correlation among various groups of the factors affecting the make – or – buy decision.

To achieve the objectives of this study, questionnaire was designed and distributed to (83) Jordanian manufacturing companies; of which, only (68) questionnaires were returned and found valid for statistical analysis, i.e. 82% in response rate. Of the (23) factors investigated, only (17) factors affect the make or buy decisions at a significance level of 95%.

These factors included the continuous attempts to improve the quality of the product and manufacturing it in Jordan according to the required quality standards. Other results revealed statistical significance for the factors involved in make or buy decisions related to size of the manufacturing company. But no statistical significance was found related to the expertise of the company.

Moreover, there were positive correlations between most of the various groups of factors affecting make – or – buy decisions, as well as differences in relative importance of these groups. Results also, indicated that management was responsible for pricing decisions and the most important factor affecting that decision was unit cost.  Direct materials cost followed by indirect manufacturing cost were found to be the most important factors to affect the product cost.

Thus, accounting information can play an important role in pricing and make – or – buy decisions.

 


Keywords


Make – or – Buy Decision / Pricing / Management Accounting

Full Text:

PDF

Refbacks

  • There are currently no refbacks.