Types of Special Decisions

The next section is focused on special decisions. Special decisions are unique, one-of-akind types of decisions that we have to decide whether to accept or not.

The first kind of special decision is called a special order, which is when someone offers to buy a product from your company, but at a special price.

The next kind of decision is to retain or eliminate a product line. Our company has several different product lines and we’re deciding whether or not we should get rid of one of them.

The next decision is whether to lease or buy an asset. When we need new equipment, we have to figure out if it’s worth it to lease the equipment or buy the equipment, and then we have the make or buy decision.

When we’re manufacturing products, we have to decide whether we want to create everything ourselves or buy some already-made components from other companies (i.e., make or buy decisions).

Next is the sell or process further decision. We’re manufacturing something and we have to decide whether we want to sell it as-is or spend more money manufacturing it and sell it for a higher price later.

The next special decision is scrap or rework. When we have a faulty product, we could either just get rid of it or we could spend more on it to eventually be able to sell it.

Even though there are many types of special decisions, each one follows the same guidelines.