Which question should be addressed when performing a make-or-buy analysis?

A key factor in a make-or-buy analysis is determining whether the staff possesses the necessary skills to produce a product consistently. This assessment is crucial because if the current workforce lacks the required expertise, producing the item in-house could lead to poor quality, inconsistent results, or increased training and hiring costs. Evaluating staff capabilities helps ensure that any decision to manufacture internally will meet quality standards and production goals.

While the other options present important considerations, they focus on elements that are more peripheral to the core decision-making process in a make-or-buy analysis. For instance, market demand is significant for overall business strategy but does not directly pertain to the operational capability of producing the item. Similarly, sourcing materials locally affects logistics and cost but does not address whether the necessary skills are available for production. Projected sales figures offer insights into potential revenue but do not inform the ability to produce the product effectively. Thus, assessing staff skills is fundamental to understanding the feasibility of making the product in-house.