ACCA Applied Skills · Performance Management · Relevant cost analysis
Which of the following is a qualitative factor that favours outsourcing a service rather than providing it in-house?
Access to the supplier's specialist expertise and economies of scale favours outsourcing. The other factors, such as control of quality, lower supplier dependence and retention of skills, are reasons to keep the activity in-house.
- AAccess to the supplier's specialist expertise and economies of scaleCorrect
- BGreater control over quality and confidentiality
- CReduced dependence on a single external supplier
- DRetention of in-house skills and knowledge
Explanation
Outsourcing may give access to specialist expertise and scale that the firm cannot match. The other options are advantages of in-house production: control, reduced supplier dependence and retained skills.
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