The Arguments That Support Making Component Parts In-House (I

question 2

Multiple Choice

The arguments that support making component parts in-house (i.e.vertical integration) are fourfold:

• A) lower costs, facilitates investments in highly specialized assets, protects proprietary product technology and, facilitates the scheduling of adjacent processes
• B) greater flexibility, helps a firm capture orders from international customers, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
• C) helps a firm capture orders from international customers, lower costs, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
• D) lower costs, greater flexibility, facilitates the scheduling of adjacent customers and, facilitates investments in highly specialized assets
• E) greater efficiencies, better quality control, protects against technology theft, and more responsive to customers

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Definitions:

Composition

The act of combining two functions by applying one function to the result of another.

Function

A mathematical relation in which each element of a set of inputs is associated with exactly one element of a set of outputs.

Inverse Function

A function that reverses the operation of a given function, so that if the original function applied to an input gives a certain output, the inverse function applied to that output returns the original input.

Function

A relation between a set of inputs and a set of permissible outputs, where each input is related to exactly one output.