- What is the main difference between offshoring and outsourcing?A) Offshoring involves moving business processes to a different country, while outsourcing involves contracting out functions to a third party, which can be domestic or international.
B) Offshoring and outsourcing are identical concepts with no differences.
C) Offshoring is only applicable to manufacturing, while outsourcing applies to all functions.
D) Outsourcing is about expanding operations within the same country, while offshoring is about reducing costs.
Answer: A) Offshoring involves moving business processes to a different country, while outsourcing involves contracting out functions to a third party, which can be domestic or international.
- Which of the following is a primary advantage of offshoring?A) Increased domestic employment
B) Lower operational costs and access to specialized skills
C) Simplified logistics and supply chain management
D) Enhanced local market knowledge
Answer: B) Lower operational costs and access to specialized skills
- What is a common risk associated with outsourcing?A) Increased control over business processes
B) Improved quality control
C) Loss of control over quality and potential data security issues
D) Enhanced employee morale
Answer: C) Loss of control over quality and potential data security issues
- Which of the following is a common reason for companies to engage in offshoring?A) To increase the number of physical store locations
B) To benefit from lower labor costs and favorable economic conditions in other countries
C) To simplify local supply chain processes
D) To enhance local supplier relationships
Answer: B) To benefit from lower labor costs and favorable economic conditions in other countries
- What does the term ‘Business Process Outsourcing (BPO)’ refer to?A) Outsourcing manufacturing processes to another country
B) Contracting out entire business functions or processes, such as customer service or IT services, to an external provider
C) Expanding retail operations to international markets
D) Increasing internal staff for business operations
Answer: B) Contracting out entire business functions or processes, such as customer service or IT services, to an external provider
- What is a key consideration when selecting an outsourcing provider?A) The provider’s office location
B) The provider’s ability to meet service level agreements (SLAs) and deliver quality services
C) The provider’s marketing strategies
D) The provider’s production volume
Answer: B) The provider’s ability to meet service level agreements (SLAs) and deliver quality services
- Which strategy involves partnering with external firms to handle specific business functions while maintaining overall control?A) Vertical Integration
B) Horizontal Integration
C) Outsourcing
D) Diversification
Answer: C) Outsourcing
- What is ‘Nearshoring’?A) Outsourcing business processes to a neighboring country or one with a similar time zone to reduce logistical challenges
B) Outsourcing functions to a distant country to save on labor costs
C) Relocating production facilities to a remote location
D) Increasing domestic production capabilities
Answer: A) Outsourcing business processes to a neighboring country or one with a similar time zone to reduce logistical challenges
- What is a common benefit of outsourcing customer service operations?A) Decreased flexibility in service delivery
B) Reduced operational costs and access to specialized customer service skills
C) Increased internal management complexity
D) Enhanced control over customer interactions
Answer: B) Reduced operational costs and access to specialized customer service skills
- Which term describes the practice of relocating business processes or services to countries with lower labor costs?A) Domestic Sourcing
B) Insourcing
C) Offshoring
D) Outsourcing
Answer: C) Offshoring