A high-end global computer company concludes that it needs to concentrate on gaining production efficiencies with its manufacturing processes. The company decides to outsource the manufacturing of key strategic parts of its products to Vietnam. Why does this company decide to utilize outsourcing?To reduce costsFor higher skilled laborTo increase qualityFor tighter process control
Question
A high-end global computer company concludes that it needs to concentrate on gaining production efficiencies with its manufacturing processes. The company decides to outsource the manufacturing of key strategic parts of its products to Vietnam. Why does this company decide to utilize outsourcing?To reduce costsFor higher skilled laborTo increase qualityFor tighter process control
Solution
The company decides to utilize outsourcing primarily to reduce costs. Manufacturing in countries like Vietnam can be cheaper due to lower labor costs and operational expenses. This can help the company gain production efficiencies.
While outsourcing can sometimes also provide access to higher skilled labor, increase quality, or allow for tighter process control, these are not the primary reasons mentioned in the scenario you provided. The main focus here is on improving production efficiencies, which is often directly tied to reducing costs.
Similar Questions
A financially driven reason for outsourcing is that it can reduce costs through a lower cost structure.Question 38Answera.TRUEb.FALSE
The disadvantages of global outsourcing are?a.Hidden costsb.Cut down customer issuesc.Cheap labour costd.Beat competition
Most organizations are not in business to provide information technology services, yet many have spent valuable time and resources on information technology functions when they should have instead worked on important competencies such as marketing, customer service, and new product design. Outsourcing helps tackle this problem. Which benefit does outsourcing primarily provide in such a scenario?Group of answer choicesFalseprotects strategic information from being accessible to external suppliersincreases accountability even without a written contracthelps focus on an organization’s core businessreduces fixed and recurrent costs
What is Outsourcing?By giving an outside party the responsibility to make goods for your company By producing the goods within your company
Explain the term 'outsourcing
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