Fun Play Global Sourcing (Scenario)

question 54

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.
-Which of the following is most likely to be the consultants' utmost concern while deciding if clothing for Fun Play dolls needs to be outsourced?

• A) Is doll clothing part of Fun Play's core competencies?
• B) What kind of fabric is used for clothing Fun Play dolls?
• C) Do the competitors of Fun Play outsource accounting activities abroad?
• D) Does Fun Play intend to follow a strategy of product diversification in the near future?

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Definitions:

Continuous Budgeting

A budgeting approach that continuously updates the budget by adding a new period (month, quarter, etc.) as the current period is completed.

Annual Period

A 12-month time frame over which a business's financial performance is evaluated, which does not necessarily align with the calendar year.

Credit Sales

Sales in which the customer is allowed to pay at a later date, typically implicating the extension of credit from the seller to the buyer.

Collections

Collections involve the processes and activities undertaken by a business to pursue and receive payments owed by customers or debtors.