Statements is true of contract manufacturing

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Reference no: EM132173177

1. Which of the following statements is true of contract manufacturing?

It decreases organizational responsiveness to the environment.

It enables a firm to tap the greater economies of scale.

It requires firms to meet the scale of market demand by committing to long-term capital investments.

It requires companies to increase its labor force to meet the scale of market demand.

2. Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products. Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal. This collaborative arrangement is most likely to be classified as ________.

capability complementation

solo internal development

disintermediation

outsourcing

3. Which of the following statements is true of outsourcing?

It is the best way for a company to develop in-house manufacturing capabilities.

It involves significantly low amounts of transaction costs.

It is the most viable option for companies seeking to avoid becoming hollow.

It carries a risk of proprietary technology being expropriated by the contract manufacturer.

4. ________ offers a fast way for a firm to extend the reach of its technology that is nearly free and offers the potential for royalties.

Solo internal development

Forming a joint venture

Vertical integration

Licensing out a technology

Reference no: EM132173177

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