Fun Play Global Sourcing (Scenario)

question 43

Multiple Choice

Fun Play Global Sourcing (Scenario)
Fun Play Inc., a company manufacturing toys for children, has decided to outsource some of its value-chain activities. However, the firm has no experience with global sourcing and has hired a consulting firm to assist its managers. The consulting firm has been assigned the task of determining which activities should be outsourced and where the outsourced activities should be located.
-If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

• A) offshoring
• B) contract manufacturing
• C) cause marketing
• D) captive sourcing

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Definitions:

Perfectly Inelastic Demand

A situation where the demand for a product remains constant regardless of changes in its price.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with its demand either being elastic or inelastic.

Total Revenue

Total financial gains received by a firm from its commercial sales and service operations throughout a defined period.

Elastic

A characteristic of a supply or demand curve that describes how much the quantity supplied or demanded responds to changes in price.