Development of Make or Buy Decision on Polyethylene Terephthalate Preform Plastic Bottles in Addis Ababa MOHA Soft Drink Company

Subject Areas : Cost-Benefit Analysis

Belachew Mebrat ¹ , Lydia Gebremariam ² , Rahel Tesfaye ³

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Received: 2022-12-23 Accepted : 2025-04-19 Published : 2025-06-23

Keywords: PET preform, Cost-benefit, and linear regression analysis ,

Abstract :

The purpose of the study is to develop a make-or-buy decision on polyethylene terephthalate (PET) preform of plastic bottles for the sake of minimizing the company expense. However, the study was focused on the summit MOHA soft drink industry PET preform purchasing price status. The study aimed to address the impact of the demand-supply gap on PET preform prices, particularly affecting companies reliant on preforms. It focused on conducting a cost analysis to assess the feasibility of replacing merchant-supplied PET preforms with in-house injection machines, along with outlining viable investment strategies for PET preform production. The study utilized cost-benefit and linear regression analyses to evaluate the economic feasibility of this approach. The findings revealed that replacing merchant-supplied PET preforms with an in-house injection machine is a highly effective strategy for reducing procurement costs. The company achieved significant annual savings of 91,705,969.30 birr through this approach. This underscores the economic advantage of producing PET preform plastic bottles internally, rather than purchasing them from external suppliers.