Contracting with Vendors Outside the Organization to Obtain or Acquire

question 7

Multiple Choice

Contracting with vendors outside the organization to obtain or acquire goods and/or services is called

• A)target costing.
• B)insourcing.
• C)outsourcing.
• D)product harvesting.

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Definitions:

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, often including preventive care, and sometimes dental and vision benefits.

Adverse Selection

A situation where buyers and sellers have different information, leading to the market being dominated by inferior products because higher quality products are squeezed out.

Free Markets

Economic systems in which the prices for goods and services are determined by the open market and consumers, without government intervention.

Moral-Hazard Problem

A situation in which one party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting costs.