Prextos Corp., after incurring losses, decides to move its manufacturing unit to a foreign location where it would get labor at cheaper rates. This way it plans to make profit. In this scenario, Prextos is planning to employ _____ to cut down its losses.
A)acquisition
B)offshoring
C)vertical integration
D)outsourcing

Question

Quizplus · Accepted Answer

Offshoring refers to the practice of relocating a company's business processes or services to a foreign country, where labor and other operational costs are lower. In this scenario, by moving its manufacturing unit to a foreign location to get labor at cheaper rates, Prextos Corp. is adopting offshoring as a strategy to cut down its losses and make a profit. Therefore, option (B) is the best choice in this case. The other options - acquisition, vertical integration, and outsourcing - are not relevant to the given scenario.