How Does Outsourcing Improve an Organization's Utilization of Assets

question 51

Multiple Choice

How does outsourcing improve an organization's utilization of assets?

• A)By allowing a company to eliminate its IS department,which will reduce its payroll costs.
• B)By allowing the company to sell assets to outsourcers and improve their cash position.
• C)By eliminating the expense of keeping up with the latest technology and,thus,eliminate the drain on cash reserves.
• D)Both B and C above are correct.

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Definitions:

Average Total Cost

The total cost of production divided by the number of units produced, used to analyze cost behaviors in economics.

Producer Surplus

The difference between the amount producers are willing and able to sell a product for and the actual amount they receive, often representing profit.

Total Surplus

The total net gain for society derived from the creation and utilization of goods or services, calculated as the combined value of consumer and producer surplus.

Net Welfare Gain

The improvement in societal well-being, measured as the sum of consumer and producer surplus, arising from economic transactions or policy changes.