Producers’ make or buy decision and business shutdown: An evaluation of choice in textile industry

Figures & data

Figure 1. Cost and capacity induced make or buy decision model.

Figure 2. Quality control induced make or buy decision model.

Table 1. Results of construct validity and of reliability test for the variables

S/n	Variables	No. of Items	Construct Validity		Reliability
			Average Variance Extracted	Composite Reliability	Cronbach’s Alpha
1	Cost of production	4	0.671	0.671	0.684
2	Manufacturing capacity	3	0.692	0.682	0.696
3	Product quality control	3	0.680	0.685	0.689
4	Shutdown	2	0.674	0.681	0 .702

Source: Researchers Fieldwork (2018).

Table 2. Description of variables used in the research

Variables	Abbre-vation	Description	Respondents	Scale	Scale Value
Independent
Make or buy decision	MBD	A make-or-buy decision is an act of choosing between two alternatives of either manufacturing a product in-house or purchasing it from an external supplier to meet customers demand	Management staff	Interval	1–5
Cost of production (Sub variable)	COP	Production cost refers to the costs incurred in the process of production or service rendition such as material costs, labour cost, and factory expenses.	Management staff	Interval	1–5
Manufacturing capacity (Sub variable)	MCA	Production capacity means the volume of products that can be generated by a production plant in a given period by using current resources	Management staff	Interval	1–5
Product quality control (Sub variable)	PQC	Product quality control (PQC) is a method of a set of procedures intended to ensure that a manufactured product adheres to a defined set of quality criteria. PQC process ensures that product quality is maintained or improved with either reduced or zero errors	Management staff	Interval	1–5
Dependent
Organization Shutdown	OSD	A shutdown is an operational level where a company experiences no benefit for continuing operations and decides to close down temporarily or permanently	Management staff	Interval	1–5

Source: Researchers’ Initiative (2018)

Table 3. Descriptive statistics for the cost of production

Participants	Cost
	N	Mean	SD
Afprint Nigeria Plc.	35	3.642	0.522
Aswani Industries Plc.	58	3.284	0.731
United Nigeria Textiles Plc.	55	4.866	0.765
Atlantic Textile Mfg. Coy. Ltd	64	2.998	0.602
Dangote Gen. Textile Ltd	53	4.226	0.417
Sun flag Group Nig. Limited	57	3.412	0.804
Total	322	3.738	0.640
F- statistics	8.176
P-value	0.000

SPSS output (2018)

Table 4. Descriptive statistics for manufacturing capacity

Participants	Capacity
	N	Mean	SD
Afprint Nigeria Plc.	35	4.145	0.544
Aswani Industries Plc.	58	4.216	0.967
United Nigeria Textiles Plc.	55	3.888	1.004
Atlantic Textile Mfg. Coy. Ltd	64	4.466	0.680
Dangote Gen. Textile Ltd	53	3.897	0.698
Sun flag Group Nig. Limited	57	4.268	1.138
Total	322	4.146	0.839
F- statistics	10.234
P-value	0.001

SPSS output (2018)

Table 5. Descriptive statistics for product quality control

Participants	Product quality control
	N	Mean	SD
Afprint Nigeria Plc.	35	3.456	0.940
Aswani Industries Plc.	58	2.416	0.765
United Nigeria Textiles Plc.	55	3.864	1.061
Atlantic Textile Mfg. Coy. Ltd	64	2.843	0.811
Dangote Gen. Textile Ltd	53	2.846	0.200
Sun flag Group Nig. Limited	57	3.429	0.822
Total*	322	3.142	0.767
F- statistics	9.254
P-value	0.004

SPSS output (2018)

Table 6. Summary of regression results of the impact of make or buy decision on the business shut down

	N	Model 1	Model 2	Model 3	Model 4 (General)
Model Summary
R	322	.776	.702	.658	.811
R^2		.721	.683	.644	.783
Adj. R^2		.717	.660	.635	.766
ANOVA^a
Sig.		.000	.000	.000	.000
F. Statistics	322	5.687	6.610	5.765	7.234
Coefficients^a
t- statistics		2.181	2.782	1.999	2.876
(Constant)		3.211	3.484	2.990	3.228
COP, MCA, PQC	322	.260	.254	.227	.454
Std. Error		.065	.077	.080	.082
DW		1.463	1.601	1.499	1.544

Source: SPSS output (2018)

Model 1 = Cost of Production; Model 2 = Manufacturing capacity; Model 3 = Product quality control;

Model 4 = Make or buy decision.

Table 7. Population make up definition

S/N	NAME OF COMPANY		Total population					Source List (50%)	Valid Copied Returned
		Location	Md/Gm	Ma	Mm	Pm	Total
	Public Companies
1	Aba Textile Mills Plc	Aba	4	4	11	36	55	-
2	Afprint Nigeria Plc	Lagos.	3	5	9	29	46	46	35
3	Aswani Industries Plc	Lagos	4	4	13	30	51
4	Nigerian Bag Mfg. Co. Plc	Lagos	6	7	15	47	75	75	58
5	United Nigeria Textiles Plc	Lagos	5	6	17	39	67	67	55
	Private Companies							-
6	African Textile Mfg. Limited	Kano	4	5	10	32	51	-
7	Arcee Textile Industry Limited	Lagos	3	4	12	26	45	-
8	Atlantic Textile Mfg. Coy. Ltd	Lagos	3	4	16	32	55
9	Dangote Gen. Textile Limited	Lagos	6	5	18	54	83	83	64
10	Qualitex Textile Limited	Lagos	4	3	21	41	69	69	53
11	Sunflag Group Nigeria Limited	Lagos	5	5	16	37	63	63	57
12	Woollen & Synthetic Text. Ltd	Lagos	4	4	14	32	54	-
	TOTAL		51	56	172	435	714	403	322

Source: Researcher Fieldwork (2018)

Md = Managing Director; Gm = General manager; Ma = Managing Accountant; Mm = Marketing Manager; Pm = Production manager.