Strategically thinking, why might management opt for other than the most economical choice

There are a few factors that are considered by the organizations previously taking the choice of assembling or purchasing the segments. Teloxy would have picked fabricating the segments as there would be an immediate control on the nature of the items. Now and again the transportation cost and the stockroom costs might be too high to ever be considered. There would be no danger of untrustworthy providers as the item would be made inside the organization. Ceaseless supply of required segments will be accessible. In view of the considerable number of components said, Teloxy team would have settled on assembling the things despite the fact that it isn't prudent.

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Answer:

Management might opt for other than the most economical choice because:

- Controlling. E.g. Franchise can be helpful to increase earnings fast but the uncertainly of quality supplied by franchisees can hurt a firm in the long run.

- Branding. E.g. Some firms have a reputation for their hand-made products. Industrialized production can reduce cost per unit and increase productivity but the brand surely is affected.

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