Short Term Decisions

Question 1

Examples of outsourcing opportunities?

Answer 1

1. outsourcing would shift the risk to supplier, assuming a long-term fixed price contract is in place.
2. It is an opportunity when there are some downward pressure on pricing.
3. outsourcing to the specialized supplier could result in higher quality and faster production.
4. free up resources to focus on the core business

Question 2

Examples of Risks associated to outsourcing?

Answer 2

1. Loss of control over quality and timing
2. decreased flexibility if there is a change on demands result in delays and inefficiencies
3. Outsouring could involve laying off some employees which could reduce overall company morale and productivity.