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When a Machine Shop Decides to Have Another Organization Perform

question 62

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When a machine shop decides to have another organization perform the heat-treating operation on its products instead of doing its own heat treating,what does this illustrate?


Definitions:

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating income.

Average Operating Assets

The average value of the assets used in the normal operations of a business over a specific period, typically used in return on investment calculations.

Balanced Scorecard

An integrated set of performance measures that are derived from and support the organization’s strategy.

Strategy

A company’s “game plan” for attracting customers by distinguishing itself from competitors.

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