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What is the best way to understand the economics of outsourcing?
Outsourcing is generally conducted for the benefit of the individual firm, but often creates negative outcomes for the economy at large. The best way to understand the economic issues surrounding outsourcing is to understand the economic tradeoffs at play. Two case studies will help in fostering this understanding.
What does it mean to "outsource" something?
In possession of the author. Outsourcing is a process by which an organization takes the services of an external party to perform some of its operations or functions. Outsourcing is also done by shipping firms all over the Globe (Outsource Freight, 2012).
What are the advantages of outsourcing?
There are numerous advantages to the practice of outsourcing. One of the first and most obvious is the cost savings. Outsourcing helps keep costs way down because workers in other countries do not make as much as their American counterparts.
Which is an example of an outsourcing relationship?
Good outsourcing relationship presents firms with unmatched opportunities to access a network of business partners. For example, electronic assembling firms in China partner with more than two electronic manufactures, firms sharing one assembler can benefit from the supply chain such as sourcing from a chip maker or glass display maker.
Last Update: Oct 2021
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