Question

1. Supply managers believe they can add the most value to the outsourcing decision by:

Multiple Choice

• providing a comprehensive, competitive process.

• advising the outsourcing team on relevant contractual terms and conditions.

• reviewing the analysis conducted by the outsourcing team.

• being available if the internal users want their assistance.

• managing the contract once the decision has been implemented.

2. Outsourcing:

Multiple Choice

• occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing.

• may reduce operating costs, improve focus on core competencies, and gain access to world-class capabilities.

• decisions are based on cost-benefit analysis.

• usually results in increased hiring to attain expertise that the organization does not already possess.

• is a low risk initiative because the firm can always revert back to performing the function in-house.

3. The decision to make or buy a good or service is:

Multiple Choice

• a one-time decision never to be reconsidered.

• a decision of strategic importance that deserves careful evaluation.

• primarily an operational decision.

• the same as deciding to insource or outsource.

• typically made by the chief supply officer and his or her executive team.

4. Subcontracts can only occur:

Multiple Choice

• in government procurement.

• if there is a prime contractor bidding out part of a job.

• when a lead contractor is behind schedule.

• if substitution is required after the specification has been set.

• when purchasing a good, not a service.

Answer 1

1. A. providing a comprehensive, competitive process.

Supply managers believe they can add the most value to the outsourcing decision by providing a comprehensive, competitive process.

2. B. may reduce or control operating costs, improve focus on core competencies, and gain access to world-class capabilities.

Outsourcing may reduce or control operating costs, improve focus on core competencies, and gain access to world-class capabilities.

3. C. the same as deciding to insource or outsource

The decision to make or buy a good or service is the same as deciding to insource or outsource.

4. B. if there is a prime contractor bidding out part of a job.

Subcontracts can only occur if there is a prime contractor bidding out part of a job.

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