Asked by Carolyn Lemon-Lewis on Jun 24, 2024
Verified
Harrison is a manager at Delta Inc., a computer manufacturing company. He believes that Delta should produce all computer components in-house rather than buying them elsewhere. Which of the following is a true statement that supports his belief?
A) Making components in-house can help a firm maintain control of sensitive knowledge.
B) Producing components in-house can help a firm develop production expertise with minimum time and effort.
C) Producing components in-house can make it easy for a firm to achieve economies of scale.
D) In-house producers have the same incentives as external suppliers to produce high-quality products.
Sensitive Knowledge
Information that is critical or private in nature, often requiring careful handling and protection due to its significance or potential impact.
Economies Of Scale
The cost advantages companies achieve as they progress down the learning curve and spread fixed costs over more units of output.
- Gain insight into the effects of make-or-buy choices on the efficiency of a company's production processes and its ability to minimize expenses.
Verified Answer
CG
Cindy GomezJun 25, 2024
Final Answer :
A
Explanation :
A) Making components in-house can help a firm maintain control of sensitive knowledge, which is a true statement supporting the belief in producing components in-house to protect proprietary information and maintain competitive advantage.
Learning Objectives
- Gain insight into the effects of make-or-buy choices on the efficiency of a company's production processes and its ability to minimize expenses.