TY  - JOUR
AU  - Chang, Yu-Teng 
AU  - Lo, Chih-Yao 
PY  - 2011
TI  - Research on the Decision Model for Self-Production and Outsourcing Choices under Limited Production Capacity
JF  - Journal of Mathematics and Statistics
VL  - 7
IS  - 2
DO  - 10.3844/jmssp.2011.157.164
UR  - https://thescipub.com/abstract/jmssp.2011.157.164
AB  - Problem statement: In the face of competitive environments with uncertain demands and a
trend toward High-Mix, Low-Volume (HMLV) production, self-production or direct outsourcing has
troubled decision-makers of enterprise for a long time. In the previous studies, not much has been written
about the topic. Approach: Therefore, this study applies the Analytic Hierarchy Process (AHP) to
investigate the topic through either qualitative or quantitative decision-making factors that influence
enterprise decision making, as well as through the viewpoint of comparative advantage. Results: Besides
considering relevant factors in decision making, this study also derives a decision-making model as the
basis for enterprises to choose from self-production and outsourcing under limited production capacity.
Conclusion: Through weighting the importance of each decision factor and proposal by the company’s decision maker based on their strategic needs and through eigenvector calculations, the company can obtain an optimal solution, faced with the two choices, based on model calculations. Also, based on the importance priority of each proposal in the decision matrix, the company can conduct production planning and devise purchasing plans.