It is currently 21 Oct 2017, 16:27

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

Events & Promotions in June
Open Detailed Calendar

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

Manager
Manager
User avatar
S
Joined: 03 Apr 2013
Posts: 243

Kudos [?]: 39 [0], given: 826

GMAT ToolKit User
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 04 Apr 2016, 20:23
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.
_________________

Spread some love..Like = +1 Kudos :)

Kudos [?]: 39 [0], given: 826

Manager
Manager
avatar
Joined: 03 Jul 2015
Posts: 70

Kudos [?]: 7 [0], given: 41

Concentration: Marketing, Finance
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 09 Apr 2016, 07:12
I am still confused why the answer cant be D.
Vernon main aim is to get the work done at a lower cost.
What if the thing is outsourced but is costly to the company?
The plan will be successful only if the costs are low.

D clearly states that Vernon will have bidding based on which it can select which company can be called in for outsourcing?

Kudos [?]: 7 [0], given: 41

Director
Director
avatar
D
Joined: 22 Jun 2014
Posts: 896

Kudos [?]: 420 [0], given: 111

Location: India
Concentration: General Management, Technology
GMAT 1: 540 Q45 V20
GPA: 2.49
WE: Information Technology (Computer Software)
Premium Member CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 15 Apr 2016, 23:27
eyunni wrote:
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc, a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at a lower cost than Vernon can itself.

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


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.

_________________

---------------------------------------------------------------
Target - 720-740
http://gmatclub.com/forum/information-on-new-gmat-esr-report-beta-221111.html
http://gmatclub.com/forum/list-of-one-year-full-time-mba-programs-222103.html

Kudos [?]: 420 [0], given: 111

Director
Director
avatar
D
Joined: 22 Jun 2014
Posts: 896

Kudos [?]: 420 [0], given: 111

Location: India
Concentration: General Management, Technology
GMAT 1: 540 Q45 V20
GPA: 2.49
WE: Information Technology (Computer Software)
Premium Member CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 23 Aug 2016, 08:58
manlog wrote:
Very confusing one. There is no linkage between task that are performed inefficiently and tasks that could be done by outsource companies cheaply.


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.

First of all you can bring new information because it is a strengthen question. But this new information should connect to the key elements on which the argument is based. here key elements are profit, cost, outsource.

So your question about connection of inefficiency and outsourcing is valid. but here is how they are connected:

If time can affect the core business than Time is that crucial factor, which impacts the profits. If you could get a grip on this dimension by outsourcing the tasks which are victim of it then vernon for sure should go ahead and outsource relevant tasks.

How come the time was impacted? it was because of the inefficiency. so here is the casue and effect relation:

inefficiency ---> eat up hell lot of time ----> impacts business ----> impacts profits
Initial cause and final effect are supposed to be considered in relation to conclusion.
inefficiency ---> impacts profits

outsource --> take away the impact on profits ---> take away the inefficiency.

hope it clears the doubt!
_________________

---------------------------------------------------------------
Target - 720-740
http://gmatclub.com/forum/information-on-new-gmat-esr-report-beta-221111.html
http://gmatclub.com/forum/list-of-one-year-full-time-mba-programs-222103.html

Kudos [?]: 420 [0], given: 111

Expert Post
Verbal Expert
User avatar
S
Joined: 14 Dec 2013
Posts: 3157

Kudos [?]: 3313 [0], given: 22

Location: Germany
Schools: HHL Leipzig
GMAT 1: 780 Q50 V47
WE: Corporate Finance (Pharmaceuticals and Biotech)
GMAT ToolKit User Premium Member Reviews Badge
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 23 Aug 2016, 10:22
manlog wrote:
Very confusing one. There is no linkage between task that are performed inefficiently and tasks that could be done by outsource companies cheaply.



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.

Kudos [?]: 3313 [0], given: 22

Director
Director
avatar
D
Joined: 22 Jun 2014
Posts: 896

Kudos [?]: 420 [0], given: 111

Location: India
Concentration: General Management, Technology
GMAT 1: 540 Q45 V20
GPA: 2.49
WE: Information Technology (Computer Software)
Premium Member CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 23 Aug 2016, 10:59
manlog wrote:
HKD1710 wrote:
manlog wrote:
Very confusing one. There is no linkage between task that are performed inefficiently and tasks that could be done by outsource companies cheaply.


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.

First of all you can bring new information because it is a strengthen question. But this new information should connect to the key elements on which the argument is based. here key elements are profit, cost, outsource.

So your question about connection of inefficiency and outsourcing is valid. but here is how they are connected:

If time can affect the core business than Time is that crucial factor, which impacts the profits. If you could get a grip on this dimension by outsourcing the tasks which are victim of it then vernon for sure should go ahead and outsource relevant tasks.

How come the time was impacted? it was because of the inefficiency. so here is the casue and effect relation:

inefficiency ---> eat up hell lot of time ----> impacts business ----> impacts profits
Initial cause and final effect are supposed to be considered in relation to conclusion.
inefficiency ---> impacts profits

outsource --> take away the impact on profits ---> take away the inefficiency.

hope it clears the doubt!


Thanks for sharing your view. However, your explanation assumes that tasks, that are inefficient right now at Vernon, can be done at a lower cost by suppliers. Otherwise is doesn't make sense to outsource them. And there is nothing about this nor in the premises nor in the answer choice E. Without this assumption, choice E doesn't strengthen the argument and this assumption is quiet a big stretch.


Well argument says -- "company plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at a lower cost"

Out of the tasks that eat up a lot of time of managers, Obviously, there would be few tasks for which company may not find the suppliers who would do those tasks at lower costs. But there would be few other such tasks for which suppliers would provide the service. Hence few services that are outsourced do add to the boost in profit, this definitly aligns with the PLAN i.e. shows the success of the plan (strengthens). Now we,ourselves, cannot assume number of tasks or boost the profit amount because that is not the concern here.
_________________

---------------------------------------------------------------
Target - 720-740
http://gmatclub.com/forum/information-on-new-gmat-esr-report-beta-221111.html
http://gmatclub.com/forum/list-of-one-year-full-time-mba-programs-222103.html

Kudos [?]: 420 [0], given: 111

Director
Director
avatar
B
Joined: 13 Feb 2015
Posts: 817

Kudos [?]: 8 [0], given: 32

Premium Member
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 15 Mar 2017, 19:32
eyunni wrote:
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc, a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at a lower cost than Vernon can itself.

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

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. 
B. Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves. 
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. 
D. Vernon plans to select the independent suppliers it will use on the basis of submitted bids. 
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.


Please explain your answers.

Merging topics. Please, refer to the discussion above: https://gmatclub.com/forum/outsourcing- ... 53143.html
_________________

Please Read: Verbal Posting Rules

Kudos [?]: 8 [0], given: 32

Senior Manager
Senior Manager
User avatar
G
Joined: 04 Sep 2015
Posts: 479

Kudos [?]: 77 [0], given: 18

Location: India
WE: Information Technology (Computer Software)
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 21 Mar 2017, 09:34
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc, a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at a lower cost than Vernon can itself.

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

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.
B. Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves.
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.
D. Vernon plans to select the independent suppliers it will use on the basis of submitted bids.
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.


The best approach is by Process of elimination A,B,C and D are clearly out of scope since they have no corelation with the provided argument,we are only left with option E
which describes the situation of the company in an alternate explaination.

Kudos [?]: 77 [0], given: 18

Senior Manager
Senior Manager
User avatar
G
Status: Active
Affiliations: NA
Joined: 24 Oct 2012
Posts: 321

Kudos [?]: 22 [0], given: 57

GMAT 1: 590 Q50 V21
GMAT 2: 600 Q48 V25
GMAT 3: 650 Q49 V30
GPA: 3.5
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 29 Mar 2017, 23:58
This post is so messed up . Same question strengthen , weaken type. Some other question also :evil:
_________________

#If you like my post , please encourage me by giving Kudos :)

Kudos [?]: 22 [0], given: 57

Manager
Manager
avatar
S
Status: active
Joined: 25 Jan 2016
Posts: 166

Kudos [?]: 33 [0], given: 10

Location: India
Concentration: Finance, Entrepreneurship
GPA: 4
WE: Web Development (Computer Software)
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 09 Apr 2017, 05:37
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.
B. Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves.
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.
D. Vernon plans to select the independent suppliers it will use on the basis of submitted bids.
E. Attending to certain tasks that Vernon performs relatively inefficiently has taken up much of

answer is E

Kudos [?]: 33 [0], given: 10

Intern
Intern
avatar
Joined: 27 Jun 2017
Posts: 3

Kudos [?]: 0 [0], given: 1

Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 18 Jul 2017, 13:54
sayantanc2k wrote:
manlog wrote:
Very confusing one. There is no linkage between task that are performed inefficiently and tasks that could be done by outsource companies cheaply.



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.


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 ?

Kudos [?]: 0 [0], given: 1

Senior Manager
Senior Manager
avatar
G
Joined: 21 Aug 2016
Posts: 297

Kudos [?]: 16 [0], given: 135

Location: India
GPA: 3.9
WE: Information Technology (Computer Software)
GMAT ToolKit User Reviews Badge
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 13 Aug 2017, 03:42
Can anyone please help how can we say in choice E that those task (which are mentioned in choice E) are certainly related to the task that Vernon planned to outsource?

Kudos [?]: 16 [0], given: 135

Senior Manager
Senior Manager
User avatar
G
Joined: 06 Jul 2016
Posts: 412

Kudos [?]: 117 [0], given: 99

Location: Singapore
Concentration: Strategy, Finance
GMAT ToolKit User Premium Member CAT Tests
Re: Outsourcing is the practice of obtaining from an independent supplier [#permalink]

Show Tags

New post 15 Aug 2017, 11:40
eyunni wrote:
Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself. Vernon, Inc, a small manufacturing company that has in recent years experienced a decline in its profits, plans to boost its profits by outsourcing those parts of its business that independent suppliers can provide at a lower cost than Vernon can itself.

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?

Quote:
(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.

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


Quote:
(B) Vernon itself acts as an independent supplier of specialized hardware items to certain manufacturers that formerly made those items themselves.

This is irrelevant. OUT!


Quote:
(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 is Out of Scope! OUT!


Quote:
(D) Vernon plans to select the independent suppliers it will use on the basis of submitted bids.

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!


Quote:
(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.

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.
_________________

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

Kudos [?]: 117 [0], given: 99

Re: Outsourcing is the practice of obtaining from an independent supplier   [#permalink] 15 Aug 2017, 11:40

Go to page   Previous    1   2   [ 33 posts ] 

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  


GMAT Club MBA Forum Home| About| Terms and Conditions| 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®.