Contract manufacturing refers to
A) offering the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee.
B) contracting with a foreign firm to manufacture products according to stated specifications.
C) contracting between a foreign country and a local firm to invest together to create a local business.
D) having a company handle its own exports directly, without intermediaries.
E) exporting through an intermediary, which has the knowledge and means to succeed in selling a firm's product abroad.

Question

Quizplus · Accepted Answer

Contract manufacturing is when a company hires a foreign firm to manufacture products according to specific requirements or specifications. This allows the hiring company to take advantage of lower labor costs and other cost savings while still being able to control the quality of the products produced. Option A refers to licensing, option C refers to a joint venture, and options D and E refer to distribution methods.

Contract Manufacturing Refers to