I really don't agree with E for the same reason stated earlier, how can you decide if the tasks performed inefficiently are the tasks which are outsourced..and even if managers are spending more time on them we dont really know if their paying attention on the core business will for sure boost profits as there are many variables. Anyway, the not to go out of scope, I will stick with the reason that we dont know if inefficient tasks are the ones outsourced.
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A. Among the parts of its business that Vernon does not plan to outsource are some that require standards of accuracy too high for most independent suppliers to provide at a lower cost than Vernon can. 
argument is not concern about plans that Vernon does not plan to outsource. so out of scope choice it is.

B. Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves. 
so what stated in this choice could help as motivation to have this plan come in place. but we are looking for a choice that tells YES, this plan will be successful. this is why it is an Out of scope choice.

C. Relatively few manufacturers that start as independent suppliers have been able to expand their business and become direct competitors of the companies they once supplied.
this choice says those independent suppliers of products or services are danger to those obtaining these services. this is a weaken-er type of choice.
 
D. Vernon plans to select the independent suppliers it will use on the basis of submitted bids. 
this choice is an evaluation not strengthen. if no bidder provide service or product in lower cost than that vernon has to bear on its own then plan is failed. vice-versa, plan is successful. this is an EVALUATE choice.

E. Attending to certain tasks that Vernon performs relatively inefficiently has taken up much of the time and effort of top managers whose time would have been better spent attending to Vernon's core business.
If certain task that eat up all valuable time, time that can help business grow and in turn help reduce the cost, then it is good to outsource those task to indep suppliers. - this is strengthen-er choice.

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There are some tasks that are done inefficiently - since those are inefficiently done, top managers have to spend more time supervising those tasks. If those tasks are outsourced to cheap subcontractors, the cost will come down (and thus profits will go up) in two ways:

1. Saving in cost of parts: Save cost by getting it done by cheap subcontractors.
2. Saving management cost: the managers will not be required to spend time on those inefficient tasks.

The question is about "plans to boost profit " rather than plans to reduce parts cost. Hence option E "most strongly" supports the prediction.

Merging topics. Please, refer to the discussion above: https://gmatclub.com/forum/outsourcing- ... 53143.html
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This post is so messed up . Same question strengthen , weaken type. Some other question also
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I strongly feel that answer should be D here

2 questions here

1. How can we assume that the inefficiently done tasks will have independent suppliers offering to support those tasks at a lower cost ?

2. In D option ,folks have mentioned that getting to select the suppliers based on the bid doesnt mean that the bid offered will be lower than the cost that Vernon will take to execute the same.
But that is the main point of the argument that outsourcing will be done for those parts of business where independent suppliers are able to offer a lower price than Vernpnn itself can and we have to prove that profits will increase if outsourcing is done.

If we take D option the optimal bid can be chosen which in turn can maximize profits(an obvious assumption would be the that the bids offered are lower than the cost for Vernon to execute the same otherwise it wouldnt have outsourced)
so if the cost for a task for vernon was 50 we have 3 bidders with proposals pf 15$,20$,30$ we would choose 15$ and maximize the profit.

Can you explain ?

Vernon Inc has experienced a decline in profits, and plans to boost its profits by outsourcing business that independent suppliers can provide at a lower cost.

Which of the following, if true, most strongly supports the prediction that Vernon's plan will achieve its goal?


How would this help in increasing profits for the company? This doesn't really help answer the question. OUT!



This is irrelevant. OUT!



This is Out of Scope! OUT!



The plan is to outsource businesses that are not core to the company, and focus on the core to increase profitability. This doesn't help answer if the plan would succeed. OUT!



This says that Vernon was performing non-core tasks inefficiently taking up too much time and effort => outsourcing these to independent suppliers would free up managers time to focus on the core business and that should help increase profitability in theory.

E is the answer.
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First of all..not sure why a couple of people are talking about dinosaurs on the first page. I guess when you outsource a self-sufficient Jurassic Park, the profits just come sliding in.

Secondly, again why are people arguing over this....this simple isn't an amazing question, even if it's from GMAC.

A, B, and C is out of scope because they don't discuss how OUTSOURCING benefits Vernon. They discuss other benefits or other general information in the industry related to outsourcing - things we don't really care about.

Let's take a closer look at D and E:

(D) Vernon plans to select the independent suppliers it will use on the basis of submitted bids.
=> Assumption Required: Cost of lowest bid < Current Cost of Outsourced Department/Component.
(E) Attending to certain tasks that Vernon performs relatively inefficiently has taken up much of the time and effort of top managers whose time would have been better spent attending to Vernon's core business.
=> Assumption Required: More time spent by top managers on core business => Increase Profits (either through efficiency, decrease cost, standardization, optimization, insert ridiculous corporate jargon here....)

If either of the above is true, we get sweet sweet profits and thus strengthens the conclusion.

Which is more common-sense? Which makes more relative sense? I don't know.....to me they are the same. People might argue that (D) is weaker. Maybe, but the assumption that more time spend by top management = increase efficiency/profits is definitely starting to erode..especially in the US with the gap of shared interest widening, C-level compensation increasing.....The association is simply too far to be logically made, hence this isn't a great question.
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I am confused why option A is not correct?
I think "option A" clearly indirectly implies that tasks that were not outsourced didn't require too high accuracy. Argument gives premise that outsourced tasks were done at lower cost. So, it means that lower costs outsourcing without compromising quality. This outsourcing shall definitely result in profits. Hence, A strengthens.
For OA E, i have problem since I need an assumption that outsourced tasks were the tasks optin E talks about.