Chap005 - Chapter 05 Make or Buy Insourcing and Outsourcing...

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Chapter 05 - Make or Buy, Insourcing, and Outsourcing C HAPTER 5 Make or Buy, Insourcing and Outsourcing Topics Covered Make or Buy Reasons for Make instead of Buy Reasons for Buying Outside The Gray Zone in Make or Buy Subcontracting Insourcing and Outsourcing· Insourcing Outsourcing Outsourcing Supply and Logistics Supply’s Role in Insourcing and Outsourcing Conclusion Questions for Review and Discussion·· References·· Cases B&L Inc. Rodot Automotive Alicia Wong 5-1
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Chapter 5 - Make or Buy, Insourcing, and Outsourcing QUIZ RESPONSES D 1. One of the most fundamental and critical decisions in any organization is, should we: a. have a single source or multiple sources for a specific purchase? b. order small quantities to avoid carrying costs or large quantities to get volume discounts? c. switch suppliers because of a slight price discount from a potential supplier? d. make or buy the needed good or service? e. enter into a long- or short-term agreement with a supplier? B 2. When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend: a. insourcing. b. outsourcing. c. continuing to make. d. continuing to buy. e. near-sourcing.. E 3. Deciding what represents a core competency in an organization is:
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Chapter 5 - Make or Buy, Insourcing, and Outsourcing B 4. Outsourcing of services is: D 5. Currently, managements tend toward: A
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