Tip: Other languages are Google-Translated. You can visit the English version of this link.
Log in


How to calculate Make-or-Buy decisions in Excel?

Make a kind of accessory by yourself, or buy it from other manufactories? Normally we have to compare costs of making and buying before making decisions. Here I will guide you to process Make vs Buy analysis, and make the make-or-buy decision in Excel easily.

Calculate Make-or-Buy decisions in Excel

Easily combine multiple worksheets/workbooks into single worksheet/workbook

It may be tedious to combine dozens of sheets from different workbooks into one sheet. But with Kutools for Excel’s Combine (worksheets and workbooks) utility, you can get it done with just several clicks! Full Feature Free Trial 60-day!

ad combine sheets books 1

arrow blue right bubbleCalculate Make-or-Buy decisions in Excel

To calculate or evaluate the make-or-buy decision in Excel, you can do as following:

Step 1: Prepare a table as the following screen shot shown, and enter your data into this table.

Step 2: Calculate the making cost and total buying cost:

(1) In Cell D3 enter =A3*C3+B3, and drag the Fill Handle to the range you need. In Our case, we drag the Fill Handle to the Range D4:D12;

(2) In Cell E3 enter =D3/A3, and drag the Fill Handle to the range you need. In Our case, we drag the Fill Handle to the Range E4:E12;

(3) In Cell G3 enter =F3*A3, and drag the Fill Handle to the range you need. In Our case, we drag the Fill Handle to the Range G4:G12.

Up to now, we have finished the Make VS Buy table in Excel.

Save a range as mini template (AutoText entry, remaining cell formats and formulas) for reusing in future

It must be very tedious to refer cells and apply formulas for calculating the averages every time. Kutools for Excel provides a cute workaround of AutoText utility to to save the range as an AutoText entry, which can remain the cell formats and formulas in the range. And then you can reuse this range with just one click in any workbook. Full Feature Free Trial 60-day!

ad auto text making vs buying dicisions

Step 3: Then we will insert a scatter chart.

(1) Holding the Ctrl key, and select the Units column (Range A2:A12), Unit Cost of Making column (Range E2:E12), and Unit Cost of Buying column (Range F2:F12);

(2) Click the Insert > Scatter button (or Insert Scatter (X,Y) or Buddle Chart button) > Scatter with Smooth Lines. See screen shot below:

Step 4: Format the vertical axis with right clicking the vertical axis and selecting the Format Axis from the right-clicking menu.

Step 5: Change the vertical axis options as following:

  1. In Excel 2013' Format Axis pane, enter min bound in the Minimum box, and enter max bound in the Maximum box;
  2. In Excel 2007 and 2010's Format Axis dialog box, check the Fixed option behind the Minimum and enter min bound into following box; check the Fixed option behind the Maximum and enter max bound into following box; then close the dialog box. See screen shot below:

Excel 2013 and higher versions:

Excel 2010:

Step 6: Change the horizontal axis option with the same method we introduced in Step 5.

Step 7: Keep selecting the chart, and then click the Layout > Chart Title > Above Chart, and then type a chart name.

Note: In Excel 2013, the chart name is added above the chart by default. You just need to change the chart name as you need.

Step 8: Change the position of legends with clicking the Layout > Legend > Show Legend at Bottom.

Note: In Excel 2013, the legend is added at bottom by default.

Up to present, we have created the Make vs Buy table and Make vs Buy chart already. And we can make make-vs-buy decision easily with the chart.
In our case, if we need less than 1050 units, it's economic to buy the accessory; if we need more than 1050 units, making the accessory will cost less; if we need 700 units or 1050 units, making costs the same money as buying. See screen shot below:

Recommended Productivity Tools

Ribbon of Excel (with Kutools for Excel installed)

300+ Advanced Features Increase Your Productivity by 71%, and Help You To Stand Out From Crowd!

Would you like to complete your daily work quickly and perfectly? Kutools For Excel brings 300+ cool and powerful advanced features (Combine workbooks, sum by color, split cell contents, convert date, and so on...) for 1500+ work scenarios, helps you solve 82% Excel problems.

  •  Deal with all complicated tasks in seconds, help to enhance your work ability, get success from the fierce competition, and never worry about being fired.
  •  Save a lot of work time, leave much time for you to love and care the family and enjoy a comfortable life now.
  •  Reduce thousands of keyboard and mouse clicks every day, relieve your tired eyes and hands, and give you a healthy body.
  •  Become an Excel expert in 3 minutes, and get admiring glance from your colleagues or friends.
  •  No longer need to remember any painful formulas and VBA codes, have a relaxing and pleasant mind, give you a thrill you've never had before.
  •  Spend only $39, but worth than $4000 training of others. Being used by 110,000 elites and 300+ well-known companies.
  •  60-day unlimited free trial. 60-day money back guarantee. Free upgrade and support for 2 years. Buy once, use forever.
  •  Change the way you work now, and give you a better life immediately!

Office Tab Brings Efficient And Handy Tabs to Office (include Excel), Just Like Chrome, Firefox, And New IE

  • Increases your productivity by 50% when viewing and editing multiple documents.
  • Reduce hundreds of mouse clicks for you every day, say goodbye to mouse hand.
  • Open and create documents in new tabs of same window, rather than in new windows.
  • Help you work faster and easily stand out from the crowd! One second to switch between dozens of open documents!
Say something here...
symbols left.
You are guest ( Sign Up? )
or post as a guest, but your post won't be published automatically.
Loading comment... The comment will be refreshed after 00:00.

Be the first to comment.