Potential advantages of contract manufacturing include all of the following EXCEPT ________.
A) reducing plant investment
B) starting faster with less risk
C) providing a later opportunity to form a partnership with the local manufacturer
D) decreasing tariff costs while meeting the country's local manufacturing regulations
E) loss of potential profits on manufacturing

Question

Quizplus · Accepted Answer

Contract manufacturing involves outsourcing the manufacturing process to a third-party manufacturer, which reduces plant investment, enables a faster start with less risk, and can help decrease tariff costs and meet local manufacturing regulations. It may also provide an opportunity to form a partnership with the local manufacturer. However, one disadvantage of contract manufacturing is the loss of potential profits from the manufacturing process, which is not listed as an advantage. Therefore, the correct answer is E.

Potential Advantages of Contract Manufacturing Include All of the Following