Question 1

List at least 3 costs of switching sources in the context of outsourcing.

Accepted Answer

Switching sources in the context of outsourcing can involve a variety of costs. Here are at least three significant costs that a company might incur when changing its outsourcing provider:

1. Transition Costs: Transitioning to a new outsourcing provider involves a range of activities that can be costly. These include the costs associated with winding down operations with the current provider, such as fulfilling any remaining contractual obligations, and the costs of ramping up operations with the new provider. Transition costs may also include expenses related to transferring knowledge and data, reconfiguring systems and processes to align with the new provider's methods, and potential downtime during the switch-over period.

2. Training and Onboarding Costs: When switching to a new outsourcing partner, there is often a need to train and onboard the new provider's personnel to ensure they understand the company's processes, culture, and expectations. This can involve creating training materials, conducting workshops or seminars, and dedicating staff time to oversee the onboarding process. These activities require both time and financial resources, and there may be a temporary loss in productivity as the new team comes up to speed.

3. Contractual and Legal Costs: Changing outsourcing providers may lead to contractual and legal costs. This includes the potential costs of terminating the existing contract, which might involve penalty fees or other termination costs. Additionally, there will be legal expenses associated with negotiating and drafting a new contract with the new provider. These costs can be significant, especially if there are complex service level agreements (SLAs) or if the outsourcing involves regulatory compliance issues that require legal expertise.

Other potential costs not listed above could include the loss of institutional knowledge if the previous provider had a deep understanding of the company's operations, the risk of reduced quality or service disruption during the transition period, and the potential impact on customer satisfaction and company reputation if the switch does not go smoothly.

Question 2

Find the terms associated with appraisal cost when discussing outsourcing among the following choices?
1)Rework
2)Returns
3)IT investments
4)Monitoring mechanisms

Accepted Answer

A)  (1) 
B)  (1) and (2) 
C)  (2) and (3) 
D)  (4) 
A)  (1) 
B)  (1) and (2) 
C)  (2) and (3) 
D)  (4) B

Question 3

The following statements are concerned with the location specific complexities for outsourcing relationships.Choose the least likely statement.

Accepted Answer

A)  Geographic dispersion complicates monitoring the service provider 
B)  Geographic dispersion increases control cost 
C)  Geographic dispersion decreases the information asymmetry and uncertainty 
D)  Geographic dispersion increases coordination cost 
A)  Geographic dispersion complicates monitoring the service provider 
B)  Geographic dispersion increases control cost 
C)  Geographic dispersion decreases the information asymmetry and uncertainty 
D)  Geographic dispersion increases coordination cost C

Question 4

Provide an example of incentive misalignment in the outsourcing contract.

Accepted Answer

An example of incentive misalignment in

Question 5

Within an outsourcing relationship, it has been shown that suppliers sometime do not behave in the manner expected.Choose a contributing factor of suppliers' opportunistic behaviors.
1)The buyer has a stronger position in the power relationship
2)The location of the supplier is far from the buyer
3)There are many possible suppliers that can perform the same function
4)The information system of the two parties in the relationship is integrated

Accepted Answer

A)  (2) 
B)  (1) and (3) 
C)  (2) and (4) 
D)  (1), (2), and (4) 
A)  (2) 
B)  (1) and (3) 
C)  (2) and (4) 
D)  (1), (2), and (4)

Question 6

Describe what the quality cost category, "External failure cost", means in the context of outsourcing?

Accepted Answer

In the context of outsourcing, "External

Question 7

Choose among the following statements, the statements that are correct regarding the influence the Nation's cultural distance has on the cost of outsourcing relationships.
1)Other factors such as organizational culture, professional culture have a stronger influence on effect on control and coordination costs
2)Inter-firm management difficulties can be directly liked to Cultural Distance
3)Collectivist cultures tend to generate lower costs
4)The cost of Individualistic cultures and collectivist cultures are the same

Accepted Answer

A)  (1) and (3) 
B)  (2) and (3) 
C)  (1), (2), and (4) 
D)  None of the above 
A)  (1) and (3) 
B)  (2) and (3) 
C)  (1), (2), and (4) 
D)  None of the above

Question 8

Generally, there are 7well known hidden costs of outsourcing.Find these costs among the possible choices.Which of the following is not considered one of the 7 hidden cost of outsourcing?
1)Transportation costs
2)Quality costs
3)Internal Coordination costs
4)Supply Chain Risk Management costs

Accepted Answer

A)  (2) 
B)  (1) and (4) 
C)  (2), (3), and (4) 
D)  None of the above 
A)  (2) 
B)  (1) and (4) 
C)  (2), (3), and (4) 
D)  None of the above

Question 9

List at least two possible opportunistic behaviors on the part of the outsource service provider.

Accepted Answer

1. Overcharging for additional services:

Question 10

Within an outsourcing relationship, is has been shown that suppliers some time do not behave in the manner expected.Creating a comprehensive contract can prevent some of these behaviors.Which of the following contract specifications could prevent opportunistic behaviors on the part of the outsource service provide?

Accepted Answer

A)  Clearly outline a dispute resolution process 
B)  Specify the length of the contract to be a long term contract 
C)  Include clauses to protect transferred equipment 
D)  Do not specify which party is responsibility for an external disruption of the supply chain 
A)  Clearly outline a dispute resolution process 
B)  Specify the length of the contract to be a long term contract 
C)  Include clauses to protect transferred equipment 
D)  Do not specify which party is responsibility for an external disruption of the supply chain

Question 11

What is the buyer's risk when the probability of outsourced function being disrupted is 2% and the cost of a disruption is $4,000,000?

Accepted Answer

A)  $500,500 
B)  $250,000 
C)  $80,000 
D)  $100,000 
A)  $500,500 
B)  $250,000 
C)  $80,000 
D)  $100,000

Question 12

Provide a brief description of what implementing of external sourcing model entails in the context of outsourcing.

Accepted Answer

Implementing an external sourcing model

Question 13

Domestic Industries.Inc.is relocating its manufacturing facilities from Ohio to Mexico.What term could we use for this decision?

Accepted Answer

A)  Outsourcing 
B)  Off-shoring 
C)  Domestic Outsourcing 
D)  In-sourcing 
A)  Outsourcing 
B)  Off-shoring 
C)  Domestic Outsourcing 
D)  In-sourcing

Question 14

US electronics is purchasing of goods to facilitate a business process owned by itself.What term should be used to describe this situation?

Accepted Answer

A)  Off-shoring 
B)  Contract manufacturing 
C)  Outsourcing 
D)  Joint venturing 
A)  Off-shoring 
B)  Contract manufacturing 
C)  Outsourcing 
D)  Joint venturing

Question 15

Which of the following reasons seem to be the largest specific contributor to the failure of outsourcing relationships and the process being brought back in-house?

Accepted Answer

A)  Global economic down turn 
B)  Cost of Monitoring and controlling suppliers 
C)  Cultural difference between buyers and suppliers 
D)  Competitive global competition 
A)  Global economic down turn 
B)  Cost of Monitoring and controlling suppliers 
C)  Cultural difference between buyers and suppliers 
D)  Competitive global competition

Question 16

Among the following activities, which choice does the party who originated the order has the least amount of control?

Accepted Answer

A)  Subcontracting 
B)  Contract manufacturing 
C)  Outsourcing 
D)  Joint venturing 
A)  Subcontracting 
B)  Contract manufacturing 
C)  Outsourcing 
D)  Joint venturing

Question 17

Describe the difference between individualism-collectivism in regard to national culture.

Accepted Answer

Individualism and collectivism are two c

Question 18

Which of the following descriptions accurately describe "Internal Coordination" for outsourcing?

Accepted Answer

A)  Activities associated with switching sources 
B)  Payroll, benefits management expected to be eliminated with outsourcing 
C)  Activities involved with ensuring compliance with governmental laws 
D)  Costs involved with lobbying efforts and related travel 
A)  Activities associated with switching sources 
B)  Payroll, benefits management expected to be eliminated with outsourcing 
C)  Activities involved with ensuring compliance with governmental laws 
D)  Costs involved with lobbying efforts and related travel

Question 19

Which of the following is not considered a quality cost category when discussing outsourcing?

Accepted Answer

A)  Appraisal cost 
B)  Internal failure cost 
C)  Return cost 
D)  Preventative cost 
A)  Appraisal cost 
B)  Internal failure cost 
C)  Return cost 
D)  Preventative cost

Question 20

Describe the nature of Core Competencies in the context of outsourcing.

Accepted Answer

Core competencies are the unique strengt

List at least 3 costs of switching sources in the context of outsourcing.

Find the terms associated with appraisal cost when discussing outsourcing among the following choices? 1)Rework 2)Returns 3)IT investments 4)Monitoring mechanisms

The following statements are concerned with the location specific complexities for outsourcing relationships.Choose the least likely statement.

Provide an example of incentive misalignment in the outsourcing contract.

Describe what the quality cost category, "External failure cost", means in the context of outsourcing?

Generally, there are 7well known hidden costs of outsourcing.Find these costs among the possible choices.Which of the following is not considered one of the 7 hidden cost of outsourcing? 1)Transportation costs 2)Quality costs 3)Internal Coordination costs 4)Supply Chain Risk Management costs

List at least two possible opportunistic behaviors on the part of the outsource service provider.

What is the buyer's risk when the probability of outsourced function being disrupted is 2% and the cost of a disruption is $4,000,000?

Provide a brief description of what implementing of external sourcing model entails in the context of outsourcing.

Domestic Industries.Inc.is relocating its manufacturing facilities from Ohio to Mexico.What term could we use for this decision?

US electronics is purchasing of goods to facilitate a business process owned by itself.What term should be used to describe this situation?

Which of the following reasons seem to be the largest specific contributor to the failure of outsourcing relationships and the process being brought back in-house?

Among the following activities, which choice does the party who originated the order has the least amount of control?

Describe the difference between individualism-collectivism in regard to national culture.

Which of the following descriptions accurately describe "Internal Coordination" for outsourcing?

Which of the following is not considered a quality cost category when discussing outsourcing?

Describe the nature of Core Competencies in the context of outsourcing.

Supply chain focused manufacturing planning and control

Forecasting demand

S&OP/Aggregate planning

Master production schedule

Supply chain focused inventory management

MRP production system

JIT/Lean production

Push and pull production systems

Capacity management

Production planning and control for remanufacturing

Manufacturing focused supply chain integration

Filters

Exam 11: Supply chain focused outsourcing

List at least 3 costs of switching sources in the context of outsourcing.

Find the terms associated with appraisal cost when discussing outsourcing among the following choices? 1)Rework 2)Returns 3)IT investments 4)Monitoring mechanisms

The following statements are concerned with the location specific complexities for outsourcing relationships.Choose the least likely statement.

Provide an example of incentive misalignment in the outsourcing contract.

Describe what the quality cost category, "External failure cost", means in the context of outsourcing?

Generally, there are 7well known hidden costs of outsourcing.Find these costs among the possible choices.Which of the following is not considered one of the 7 hidden cost of outsourcing? 1)Transportation costs 2)Quality costs 3)Internal Coordination costs 4)Supply Chain Risk Management costs

List at least two possible opportunistic behaviors on the part of the outsource service provider.

What is the buyer's risk when the probability of outsourced function being disrupted is 2% and the cost of a disruption is $4,000,000?

Provide a brief description of what implementing of external sourcing model entails in the context of outsourcing.

Domestic Industries.Inc.is relocating its manufacturing facilities from Ohio to Mexico.What term could we use for this decision?

US electronics is purchasing of goods to facilitate a business process owned by itself.What term should be used to describe this situation?

Which of the following reasons seem to be the largest specific contributor to the failure of outsourcing relationships and the process being brought back in-house?

Among the following activities, which choice does the party who originated the order has the least amount of control?

Describe the difference between individualism-collectivism in regard to national culture.

Which of the following descriptions accurately describe "Internal Coordination" for outsourcing?

Which of the following is not considered a quality cost category when discussing outsourcing?

Describe the nature of Core Competencies in the context of outsourcing.

Supply chain focused manufacturing planning and control

Forecasting demand

S&OP/Aggregate planning

Master production schedule

Supply chain focused inventory management

MRP production system

JIT/Lean production

Push and pull production systems

Capacity management

Production planning and control for remanufacturing

Manufacturing focused supply chain integration

Filters