Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc., a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at lower cost than Vernon can itself.
Which of the following, if true, most strongly supports the prediction that Vernon's plan will achieve its goal?
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc., a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at lower cost than Vernon can itself.
Which of the following, if true, most strongly supports the prediction that Vernon's plan will achieve its goal?
(A) Among the parts of its business that Vernon does not plan to outsource are some that require standards of accuracy too high for most independent suppliers to provide at lower cost than Vernon can.
(B) Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves.
(C) Relatively few manufacturers that start as independent suppliers have been able to expand their business and become direct competitors of the companies they once supplied.
(D) Vernon plans to select the independent suppliers it will use on the basis of submitted bids.
(E) Attending to certain tasks that Vernon performs relatively inefficiently has taken up much of the time and effort of top managers whose time would have been better spent attending to Vernon's core business.
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.
Which of the following, if true, most seriously weakens the argument?
A. If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
B. Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
C. Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
D. For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
E. When a company decides to use an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.