To Reduce Its Dependence on a Single Outsourcing Provider, an Organization

question 7

Short Answer

To reduce its dependence on a single outsourcing provider, an organization will seek flexibility and take a "best-of-breed" approach. What is the term used to describe this use of multiple outsourcing vendors?

---

Definitions:

Profit-maximizing

A strategy or condition where a firm adjusts its production to achieve the highest possible profit based on its costs and the market price.

Shut-down Point

The price and quantity point at which a business ceases operations because continuing would result in losses.

Economically Efficient

A situation where resources are allocated in a way that maximizes the net benefit to society or minimizes the cost of achieving a set output level.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.