MGT 327 Chapter 5 Insourcing and Outsourcing

subcontractor

A ______ is used to complete work that has been bid out by prime contractors.

triad

A buyer who contracts with a supplier to deliver services directly to the buyer's customer is viewed as a service___________

outsourced

A car manufacturer has ________ the installing of windows in all their models to a third party vendor.

make over buy

A company that needs to protect intellectual property, even with a confidentiality agreement, may choose to ____________over _________ .

gray

A die shop has three options during production they are to make the part from a blank, buy a finished piece, or machine a partial piece from a forging. If the production manager chooses to machine an incomplete part from the purchased forging, this is known as the ________ zone.

A, C, D

A subcontract performance summary is beneficial for A) information for renegotiation. B) inventory of all services or goods. C) evaluation fore future selection. D) information for subsequent claims.

purchase the part from a third party vendor.

ABC automotive does not currently have the necessary technology and expertise to manufacture a mandatory component required for their exhaust systems, the cost of purchasing the machinery, tooling, training, and employees is very costly. ABC automotive should

-remain competitive. -focus on core strengths. -increase productivity.

Buying is favored throughout corporations today to

-The firm wishes to take advantage of a supplier's brand image. -The supplier can provide the benefit of economies of scale for components that are non-vital to the organization's operations. -The firm has strict on time delivery deadlines and requires a multi-sourcing strategy using an external supplier in addition to an internal source.

Choose the reasons a firm should purchase goods or services over making them. -The firm wishes to take advantage of a supplier's brand image. -The supplier can provide the benefit of economies of scale for components that are non-vital to the organization's operations. -The firm has strict on time delivery deadlines and requires a multi-sourcing strategy using an external supplier in addition to an internal source. -The company can make use of excess capacity by creating a material instead of letting the capacity sit idle.

involved

Given the importance of insourcing and outsourcing decisions, the supply manager should be______

Outsourcing

Hiring another organization to perform service to save costs, gain expertise, free up management time, and refocus on core competencies is known as_______

continuously

Insourcing and outsourcing decisions should be evaluated ___________

Insourcing

The decision to reverse functions, processes or projects that were being supported with external resources is known as

gray zone

The range between 100% insourcing and 100% outsourcing. that is useful for testing and learning both sides of supply without fully committing is known as

subcontract administrator.

The subcontract cost, schedule, technical control, and configuration control are managed by the

entrepreneurial; operational

The types of products or services to offer are strategic ___________ decisions, while what to make or buy are strategic _________ decisions.

False - Each subcontract closure requirements will vary in complexity, but the performance summary should be included.

True or false: Closure requirements for all subcontracts are universal.

Core competency

What is a factor that is the key to a business's success that competitors can't easily copy?

To keep core competencies in-house.

What is a reason a company may choose insourcing?

A, B, C

Which decisions can the supply manager help provide insight? (multiple answers) A) What products or services should be outsourced. B) Negotiation of contract terms. C) Which supplier should be selected. D) Monitoring the relationships with customers.

A,B,D

Which of the following are challenges or questions that must be addressed when an organization decides to insource? A) The company must focus on how they will discontinue relationships with current suppliers. B) The company must ensure a smooth transition to avoid production interruptions. C) The company must hire a lot of new employees to produce the insourced product. D) The company must be able to provide raw materials and parts for production.

-To have more control of the quality of the material/product than a supplier. -The ability to produce the material or product at a lower cost and avoid paying a 3rd party's profit margin. -No existing supplier in the market and not enough time to spend developing one before the product is required.

Which of the following are reasons that a company may choose to make over buy?

-Organizational circumstances -Environmental circumstances -Market circumstances

Which of the following are reasons that previously make or buy decisions can be reversed? -Organizational circumstances -Environmental circumstances - Customer service ratings -Market circumstances