Chapter 2 Operations Strategy in a Global Environment

11) Which of the following statements is most accurate?

A) Nearly all outsourcing relationships do not last beyond two years.

B) Nearly all U.S. firms that outsourced processes to India have backsourced them.

C) Approximately half of all outsourcing agreements fail.

D) Outsourcing is a relatively risk-free activity.

E) More than 90% of outsourcing agreements succeed.

12) Which of the following is not an advantage of outsourcing?

A) cost savings

B) gaining outside expertise

C) improving operations and service

D) outsourcing core competencies

E) accessing outside technology

13) Advantages of outsourcing do NOT include:

A) cost savings.

B) gaining outside expertise.

C) maintaining a focus on core competencies.

D) accessing outside technology.

E) potential creation of future competition.

14) An operations manager is performing a factor-rating analysis to help her choose an outsourcing provider. She is focusing on three factors: A, B, and C, with weights of .50, .20, and .30, respectively. She has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor-rating score for Ling Services?

A) 98.0

B) 32.7

C) 21.8

D) 29.2

E) 30.8

15) An operations manager is performing a factor-rating analysis to help him choose an outsourcing provider. He is focusing on two factors: A and B, using a weight of 75% for factor A and 25% for factor B. He has scored five different potential providers on both factors, using a scale of 1-5, with 1 representing the BEST score. Based on the scores provided in the table below, which provider should be chosen?

Provider	Factor A	Factor B
Alpha	1	5
Beta	3	3
Gamma	4	1
Phi	2	1
Omega	3	5

A) Alpha

B) Beta

C) Gamma

D) Phi

E) Omega

16) ________ is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.

17) Outsourcing manufacturing is also known as ________.

18) Outsourcing is an extension of the long-standing practice of ________ production activities.

19) The theory of ________ implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

20) Identify three factors fueling the continuing growth of outsourcing.