Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following, if TRUE, most supports the argument in favor of global sourcing?
A) There is no scarcity of qualified personnel in and around Boston.
B) Studies show that by reconfiguring their value-chain systems or reengineering their business processes, companies can substantially improve their production efficiency and resource utilization.
C) Camden Audio, Echo's most formidable rival, follows a strategy of product diversification.
D) The rate of employee turnover at Echo has stabilized over the last decade.

Question

Quizplus · Accepted Answer

Global sourcing can lead to improved production efficiency and resource utilization, which supports the argument for Echo to adopt it to become more competitive.