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# Gmatprep CR Outsourcing

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Director
Joined: 02 Mar 2006
Posts: 575
Location: France

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17 Dec 2006, 14:23
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outsourcing
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Director
Joined: 28 Dec 2005
Posts: 919

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17 Dec 2006, 14:27
Vernon plans to boost profits by getting lowest price on the outsourced item. This indicates (D) as the answer, ie: Vernon selects suppliers based on their bids. This will help Vernon decide which is the lowest.
Senior Manager
Joined: 08 Jun 2006
Posts: 335
Location: Washington DC

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17 Dec 2006, 20:03
I think the question is whether Vernonâ€™s plan to â€œoutsourceâ€
Senior Manager
Joined: 04 Nov 2006
Posts: 259
Location: California

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17 Dec 2006, 22:56
E...
Senior Manager
Joined: 04 Nov 2006
Posts: 259
Location: California

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17 Dec 2006, 22:58
D will not hold.. even if it can select vendor through bidding, it does not guarantee that they can reduce the cost...

E however mentions that the company can direct its resources more productively..
Senior Manager
Joined: 01 Oct 2006
Posts: 495

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18 Dec 2006, 13:08
E 2..
Director
Joined: 28 Dec 2005
Posts: 919

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18 Dec 2006, 13:55
mm007 wrote:
D will not hold.. even if it can select vendor through bidding, it does not guarantee that they can reduce the cost...

E however mentions that the company can direct its resources more productively..

Hmm, I think I may have been wrong with this. Your reasoning makes sense.
Director
Joined: 02 Mar 2006
Posts: 575
Location: France

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18 Dec 2006, 14:35
I'm the only one to have chosen C. OA E.

I believed that C was better than E, because it says that the supplier is unlikely to become a competitor-> strengthens the argument. The company will make profit(since outsources for cheaper) and will keep making profit since no fear from competitors.

E says that manager will not spend their time on inefficient tasks. Is producing a product more expensive than a supplier would, synonym of inefficient task? I am not sure.
Nothing in E says that outsourcing will reduce the amount of inefficient task. Moreover, manager can focus on the core business but will that really increase the profits?

humm, is there anyone to support me or am I out of scope?
Anyway, on Wednesday I have my exam, so it's pretty late to change my way of thinking!
18 Dec 2006, 14:35
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