GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 12 Dec 2018, 01:47

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel
Events & Promotions in December
PrevNext
SuMoTuWeThFrSa
2526272829301
2345678
9101112131415
16171819202122
23242526272829
303112345
Open Detailed Calendar
  • The winning strategy for 700+ on the GMAT

     December 13, 2018

     December 13, 2018

     08:00 AM PST

     09:00 AM PST

    What people who reach the high 700's do differently? We're going to share insights, tips and strategies from data we collected on over 50,000 students who used examPAL.
  • GMATbuster's Weekly GMAT Quant Quiz, Tomorrow, Saturday at 9 AM PST

     December 14, 2018

     December 14, 2018

     09:00 AM PST

     10:00 AM PST

    10 Questions will be posted on the forum and we will post a reply in this Topic with a link to each question. There are prizes for the winners.

Outsourcing is the practice of obtaining from an independent supplier

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Senior Manager
Senior Manager
User avatar
Joined: 21 Dec 2010
Posts: 456
Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post Updated on: 09 Oct 2018, 22:49
6
10
00:00
A
B
C
D
E

Difficulty:

  15% (low)

Question Stats:

78% (01:19) correct 22% (01:33) wrong based on 373 sessions

HideShow timer Statistics

Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Which of the following, if true, most seriously weakens the argument?

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.

(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.

(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.

(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.

(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.



Similar Question https://gmatclub.com/forum/outsourcing- ... 53143.html



Spoiler: :: OE
Argument Evaluation

Situation
In order to realize the highest year-end profits, a company should outsource any service or product that can be obtained from an independent supplier for less than it would cost the company to provide that service or product itself.

Reasoning
What weakens this argument? When could outsourcing a service or product result in a business disadvantage or lower profits? It is clear that the company must give independent suppliers enough information to enable them to provide the contracted products and services, but this means that the company can lose control over who has possession of such critical information. If the information becomes known to the company’s competitors and gives them a business advantage, the company’s profitability may be harmed rather than helped by outsourcing. This possibility weakens the argument.

(A) This would strengthen the argument since the pricing competition among independent suppliers
is an advantage for the company.

(B) Correct. This statement properly identifies one disadvantage of outsourcing: the company no longer controls access to its information and plans. With the increased possibility of competitors’ gaining access to its proprietary information, the company’s business is put at risk.

(C) Providing examples of the tasks typically outsourced or handled internally does not affect the argument.

(D) Expertise in a particular area is an advantage of outsourcing and thus a strength of the argument.

(E) The supplier’s hiring of members of the company’s staff to handle work no longer performed within the company is not shown to be a disadvantage.

The correct answer is B.

Originally posted by garimavyas on 12 May 2011, 07:32.
Last edited by bb on 09 Oct 2018, 22:49, edited 3 times in total.
Reformatted question, OA added
Most Helpful Community Reply
Retired Moderator
avatar
Joined: 20 Dec 2010
Posts: 1820
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 16 May 2011, 00:47
4
1
garimavyas wrote:
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.
Which of the following, if true, most seriously weakens the argument?


Argument: Just because a outsourcing company provides a product or service at a cheaper rate, one should avail its services.

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
This strengthens the argument to a degree. Competition among providers ensures that the outsourced company would be benefited further.

(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
Clearly weakens to a great degree. The outsourcing may enable company's competitors to develop replicas that outsourced company was relying on for its benefits, resulting in decreased sales and market bifurcation for the products it develops.

(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
Thanks for the information. I'll just skip.

(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
This statement discusses another reason as to why outsourcing is needed. Out of scope.

(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.
Possible drawback of outsourcing, agree!! But, it doesn't hurt the argument as badly as B does.

Ans: "B"

1:45min
_________________

~fluke

GMAT Club Premium Membership - big benefits and savings

General Discussion
Retired Moderator
avatar
B
Joined: 16 Nov 2010
Posts: 1425
Location: United States (IN)
Concentration: Strategy, Technology
Premium Member Reviews Badge
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 16 May 2011, 00:23
+1 for B. If the company's competitors get the knowhow or the expertise through its suppliers, they can give the company a run for its Money through several means,e.g., by coming up with better versions of same product at cheaper rates and hence the bottomline of the company will be affected directly. This is directly in clash with the primary objective of the company to maximize its profits by outsourcing.
_________________

Formula of Life -> Achievement/Potential = k * Happiness (where k is a constant)

GMAT Club Premium Membership - big benefits and savings

Manager
Manager
User avatar
B
Joined: 24 Mar 2010
Posts: 84
GMAT ToolKit User Premium Member
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 28 Jun 2014, 07:21
1
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company's chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

A. If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
B. Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
C. Certain tasks, such as processing a company's payroll, are commonly outsourced, whereas others, such as handling the company's core business, are not.
D. For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
E. When a company decides to use an independent supplier for a product or service, the independent supplier sometimes hires members of the company's staff who formerly made the product or provided the service that the independent supplier now supplies.
_________________

Start to fall in love with GMAT <3

Manager
Manager
avatar
Joined: 28 Apr 2014
Posts: 217
GMAT ToolKit User
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 30 Jun 2014, 00:29
1
Incomplete question . What needs to be done ? Where is the stem
Manager
Manager
avatar
Joined: 08 Apr 2013
Posts: 157
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 30 Jun 2014, 00:58
which of the following weaken the argument above?
_________________

If anyone in this gmat forum is in England,Britain, pls, email to me, (thanghnvn@gmail.com) . I have some questions and need your advise. Thank a lot.

Intern
Intern
avatar
Joined: 03 Feb 2014
Posts: 6
Location: United States
Concentration: Technology, Social Entrepreneurship
GPA: 3.75
GMAT ToolKit User
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 08 Jul 2014, 03:47
1
Hi,

Please see the detail discussion at given link:

outsourcing-is-the-practice-of-obtaining-from-an-independent-113580.html

Regards,
Ashish
Current Student
User avatar
Joined: 18 Oct 2014
Posts: 846
Location: United States
GMAT 1: 660 Q49 V31
GPA: 3.98
GMAT ToolKit User
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 29 Jul 2016, 10:41
garimavyas wrote:
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Which of the following, if true, most seriously weakens the argument?

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.


oa after discussion , please post your timing too


Argument says that outsourcing is a good practice if company can outsource the product cheaper.

In order to weaken the statement we have to look for an option that shows outsourcing is a bad option and it affects the business financially.

Looking at the choice, option B is talking about the bad effects of outsourcing on business.
_________________

I welcome critical analysis of my post!! That will help me reach 700+

Director
Director
User avatar
G
Joined: 04 Sep 2015
Posts: 520
Location: India
WE: Information Technology (Computer Software)
Premium Member Reviews Badge CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 15 Mar 2017, 16:02
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Which of the following, if true, most seriously weakens the argument?

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.



Why would a company outsource to another company? to beat the market competition by minimizing the cost of production and either maximizing the profits or lowering the prices.But this is done to win the competition,and what if the third party/ outsourced company also work for another company in the same market and in competition with the first comapny.There may be risk of information leakage or sharing of resources and the competitive company would get adantage .This would defeat the entire purpose of outsourcing.

Option B is the correct answer for weakener of the Argument.
Intern
Intern
avatar
Joined: 25 Jul 2017
Posts: 7
Location: United States
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 11 Aug 2017, 01:52
You haven't written your question properly but I will still try to answer on what you might be trying to ask.
Outsourcing is usually done to minimize the expenses by contracting out several services and operations to a third party. It is a cost-effective technique which bring out more transparency. Outsourcing can be offshoring or onshoring depending upon the company's requirements.
Senior Manager
Senior Manager
User avatar
G
Joined: 06 Jul 2016
Posts: 369
Location: Singapore
Concentration: Strategy, Finance
GMAT ToolKit User Premium Member
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 15 Aug 2017, 10:26
vnigam21 wrote:
A Good CR question to try, guys please try and reply your comments for this CR question.

Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.
Which of the following, if true, most seriously weakens the argument?
(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.

OA will be posted after some time/trials.


https://gmatclub.com/forum/outsourcing- ... 53143.html
See this!
_________________

Put in the work, and that dream score is yours!

BSchool Forum Moderator
User avatar
V
Joined: 28 Mar 2017
Posts: 1223
Location: India
GMAT 1: 730 Q49 V41
GPA: 4
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 15 Aug 2017, 10:39
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realise the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Which of the following, if true, most seriously weakens the argument?

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.
This is fact statement. The company will make use of the competition amongst the suppliers to get the cheapest rates. This doesn't strengthen or weaken the argument.

(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.
Correct. If the internal information gets in the hands of competitor then its a huge loss for the company.

(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not.
We are not worried about the tasks that are outsourced or not.

(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are.
We are not worried about the expertise of the managers.

(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.
We are not worried about what will happen when a supplier is sued.
_________________

Kudos if my post helps!

Long And A Fruitful Journey - V21 to V41; If I can, So Can You!!
Preparing for RC my way
RC Summary Activity - New Project to imporve RC Skills
Bloomberg's US Bschool Ranking

My study resources:
1. Useful Formulae, Concepts and Tricks-Quant | 2. e-GMAT's ALL SC Compilation | 3. LSAT RC compilation | 4. Actual LSAT CR collection by Broal | 5. QOTD RC (Carcass) | 6. Challange OG RC | 7. GMAT Prep Challenge RC

Manager
Manager
avatar
S
Joined: 06 Jul 2014
Posts: 97
Location: India
Concentration: Finance, Entrepreneurship
GMAT 1: 640 Q48 V30
GMAT ToolKit User Reviews Badge
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 15 Aug 2017, 10:55
1
Since this is a weaken question the objective is to identify the the conclusion, identify any gaps in logic in the argument and then work from wrong to right.

This argument concludes that any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced because a company’s chief objective is to realize the highest possible year-end profits.

But there could be many ways that could result in a loss in profit from this strategy. Option B is one of them and thus weakens the argument.

The fact that successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage can negatively affect the company's revenues and thus its profits.
Manager
Manager
avatar
S
Joined: 06 Jul 2014
Posts: 97
Location: India
Concentration: Finance, Entrepreneurship
GMAT 1: 640 Q48 V30
GMAT ToolKit User Reviews Badge
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 15 Aug 2017, 11:07
Since this is a weaken question the objective is to identify the the conclusion, identify any gaps in logic in the argument and then work from wrong to right.
This argument concludes that any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced because a company’s chief objective is to realize the highest possible year-end profits.
But there could be many ways that could result in a loss in profit from this strategy. Option B is one of them and thus weakens the argument.
The fact that successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage can negatively affect the company's revenues and thus its profits.
Manager
Manager
avatar
S
Joined: 28 Jun 2015
Posts: 75
Location: Australia
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 20 Sep 2017, 16:50
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Which of the following, if true, most seriously weakens the argument?

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product. - Incorrect - Out of scope

(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage. - Correct: When cause (outsourcing) occurs, effect (profit/business advantage) does not occur

(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not. - - Incorrect - Out of scope

(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are. - - Incorrect - Shell game

(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies. - Incorrect - Out of scope
Verbal Forum Moderator
User avatar
V
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2127
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
GMAT ToolKit User Reviews Badge CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 22 Sep 2017, 09:43
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.

Type - weaken
Boil it down - Since a company’s chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced.
- Maybe there is some adverse effect of outsourcing

(A) If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product. - Irrelevant - this only tells a way how maybe a company can negotiate the best price

(B) Successful outsourcing requires a company to provide its suppliers with information about its products and plans that can fall into the hands of its competitors and give them a business advantage.- Correct - If the trade secrets of the company falls into the hands of competitors then it will lose the competitive advantage

(C) Certain tasks, such as processing a company’s payroll, are commonly outsourced, whereas others, such as handling the company’s core business, are not. - Irrelevant - Our goal is to maximize outsourcing

(D) For a company to provide a product or service for itself as efficiently as an independent supplier can provide it, the managers involved need to be as expert in the area of that product or service as the people in charge of that product or service at an independent supplier are. - Irrelevant

(E) When a company decides to sue an independent supplier for a product or service, the independent supplier sometimes hires members of the company’s staff who formerly made the product or provided the service that the independent supplier now supplies.- Incorrect - this might be a cause of a little concern for the company but we are given this happens only sometimes

Answer B
_________________

When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
+1 Kudos if you find this post helpful

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 3502
Premium Member
Re: Outsourcing is the practice of obtaining from an independent supplier  [#permalink]

Show Tags

New post 27 Sep 2018, 02:01
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

-
April 2018: New Forum dedicated to Verbal Strategies, Guides, and Resources

GMAT Club Bot
Re: Outsourcing is the practice of obtaining from an independent supplier &nbs [#permalink] 27 Sep 2018, 02:01
Display posts from previous: Sort by

Outsourcing is the practice of obtaining from an independent supplier

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.