Discuss the Problems Associated with Global Sourcing

question 32

Essay

Discuss the problems associated with global sourcing.

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Definitions:

Diseconomies Of Scale

Situations where a firm's costs per unit increase as the scale of production increases, typically due to inefficiencies that arise from becoming too large.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Diminishing Returns

A principle in economics that states as one input variable is incrementally increased, there comes a point when the rate of resultant output begins to decrease.

Variable Inputs

Inputs, such as labor and materials, whose usage changes according to the level of production.