Risks to a Company That Can Result from Outsourcing Include

question 24

Multiple Choice

Risks to a company that can result from outsourcing include:

• A) Customers demanding higher quality and better service
• B) Loss of control over a product or process
• C) Increasing technological capabilities
• D) Lower costs
• E) a and b

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Definitions:

AFC (Average Fixed Cost)

The fixed costs (expenses that do not change with the level of production) divided by the quantity of goods or services produced, typically decreasing as production increases.

Marginal Cost

The cost increase that comes with producing an additional unit of a product or service.

Marginal Revenue

The heightened income realized from the sale of one more unit of a good or service.

Marginal Cost

The price involved in creating one more unit of a specific good or service.