Outsourcing production may increase a firm's flexibility in some ways, but it may also make production costs higher and quality control more difficult.

Question

Quizplus · Accepted Answer

Outsourcing production can lead to increased flexibility due to the ability to tap into specialized skills and resources, but it may also result in higher costs due to transportation, communication, and management expenses. Quality control can be more challenging when working with external suppliers who may not share the same standards and processes as the firm.

Outsourcing Production May Increase a Firm's Flexibility in Some Ways