The common practice of outsourcing the upstream activities of the business

Question

The common practice of outsourcing the upstream activities of the business - raw materials, manufacturing, assembly, and inventory - provides many advantages with little risk to the entrepreneur. ​

Quizplus · Accepted Answer

Outsourcing upstream activities can indeed offer advantages such as cost reduction, access to specialized skills, and improved focus on core competencies. However, it also introduces risks such as loss of control over the supply chain, potential quality issues, dependency on suppliers, and challenges in communication and coordination.