Why Do Cost Overrides with Outsourcing Occur More Frequently Than

question 36

Multiple Choice

Why do cost overrides with outsourcing occur more frequently than what is projected?

• A) Information technology is deemed a compatible system.
• B) Client demands are outside of the standard vendor package.
• C) Organizations are inexperienced with vendor selection.
• D) Vendors will make contracts that are biased in their favour.

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Definitions:

Sales Dollar

Refers to the total revenue generated from sales of goods or services, measured in dollars.

Administrative and Selling Expenses

Expenses incurred by a business in its day-to-day operations, including salaries of non-production staff, marketing costs, and office supplies.

Debt to Stockholders' Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Liabilities

Financial obligations or debts that a company owes to others, usually as a result of past transactions or events.