Indicate Whether Each of the Following Statements About Outsourcing Decisions

question 13

Short Answer

Indicate whether each of the following statements about outsourcing decisions is true or false.
1. An outsourcing decision involves a purchase offer from a customer at a lower-than-normal selling price.
2. Outsourcing would increase a company's level of vertical integration.
3. To evaluate an outsourcing decision, a manager should compare the avoidable cost of making an item to the cost of buying it.
4. The decision to outsource a particular product is not affected by the amount of the product needed.
5. Reliability of the supplier is a critical issue in an outsourcing decision.

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Definitions:

Field Experiment

An experiment that is conducted in a natural setting rather than in a laboratory setting.

Shopping Preferences

Individual choices or inclinations towards certain products, brands, or shopping environments.

External Validity

The ability to apply the outcomes of a research project to different environments and other persons.

Generalization

The process of applying the results from studies to wider contexts outside of the original research settings.