Audio Component Outsourcing (Scenario)

question 14

Multiple Choice

Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following is TRUE with regard to the risks of global sourcing?

• A) Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries.
• B) Firms that source from countries whose currencies are strengthening experience lower costs.
• C) Global sourcing weakens competition leading to a considerably risk-free international business environment.
• D) Environmental challenges exclude currency fluctuations, tariffs and other trade barriers, high energy and transportation costs.

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Definitions:

Middle Ear

The section of the ear between the eardrum and the oval window, containing the three auditory ossicles that transmit sound.

Vibrations

Oscillations that occur in various physical entities, which can be felt or heard as waves through mediums like air or water.

Balance

The ability of the body to maintain its center of mass over its base of support, a function involving sensory input, integration by the brain, and output to muscles.

Amplitude

The extent of displacement of a wave or oscillation, a measure of its strength or intensity.