Everything Else Being Equal, a Firm Considering Outsourcing Can Be

question 89

Multiple Choice

Everything else being equal, a firm considering outsourcing can be reasonably certain that:

• A) total costs will be lower.
• B) its supplier probably has more expertise in whatever is being outsourced.
• C) it can maintain tight control over knowledge.
• D) proprietary information will not be disclosed.
• E) control over operations will be maintained.

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Definitions:

Intangible

Describes assets or value that cannot be physically touched or seen but have importance or worth, such as intellectual property or brand reputation.

Acquisition

The purchase of one company by another.

Economies Of Scale

The cost advantage that arises with increased output of a product, as the fixed costs are spread out over more units of production.

Merger

The combination of two or more companies into a single entity, often with the goal of increasing market share, reducing costs, or gaining access to new markets or technologies.