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# Outsourcing is the practice of obtaining from independent suppliers

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Re: Outsourcing is the practice of obtaining from independent suppliers [#permalink]
OokandGluk wrote:
chetan2u wrote:
ashutosh_73 wrote:
­Outsourcing is the practice of obtaining from independent suppliers products or services that a company previously provided for itself. Some analysts maintain that a company should outsource a product or service if an independent supplier can provide it at a lower cost, since the goal of any company is to maximize its profit. That goal, however, could require a company to make the opposite decision. Companies that outsource generally dismantle some of their capabilities. In so doing, they might make themselves totally dependent on just a few outside suppliers. Since the outsourcing companies do not control the priorities of those suppliers, the continuity of supply and thus of their own operations could be threatened. Thus, a company's long-term profitability might be better protected by not outsourcing.

In the argument given, the two boldfaced portions play which of the following roles?

A) The first describes a phenomenon the explanation of which is at issue in the argument; the second is the explanation that the argument concludes is correct.
B) The first describes a phenomenon the explanation of which is at issue in the argument; the second provides evidence in support of a proposed explanation of that phenomenon.
C) The first defines a key term used throughout the argument; the second is an intermediate conclusion drawn to support the main conclusion of the argument.
D) The first defines a key term used throughout the argument; the second is a generalization that has been used to support a conclusion that the argument rejects.
E) The first defines a key term used throughout the argument; the second provides evidence in support of an intermediate conclusion that is drawn to support the main conclusion of the argument.­

­The first bold describes the term Outsourcing, so C, D and E are correct.

Next, the second bold is something that happens or a permise or a fact but surely not a conclusion or an intermediate conclusion, so C is out.

D says that the second bold supports the conclusion that argument rejects while E says that the second bold supports the main conclusion.

The main conclusion is 'Thus, a company's long-term profitability might be better protected by not outsourcing.'
The second bold talks of the fact that generally companies that outsouce a product dismantle the factory/equipment/capabilities that were used to produce the items being outsourced.
But doing so could tempt the firm that provides outsourced material to ask for better price that may be actually not be economiocal.

Thus, the second bold supports the main conclusion of the argument.

E

­What is the intermediate conclusion? Option E says that the Bold Face is an evidence to support intermediate conclusion. However I see that you have only mentioned the main conclusion and said that Option E is right?­
Is the second last sentence the Intermediate conclusion

­Hi,

This is the intermediate conclusion that BF2 supports: "That goal, however, could require a company to make the opposite decision." This further supports the main conclusion as Chetan2u stated.
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Outsourcing is the practice of obtaining from independent suppliers [#permalink]
­Can we say there is another conclusion made by the analysts here?
As per, "Some analysts maintain that a company should outsource a product or service ...." , analysts claim that it is better to outsource the product or service (analyst conclusion) when it can be provided at a cheaper cost (which is premise for said conclusion) to increase profits.
Or is my thinking wrong here?
Also, how to clearly figure out the conclusions from given arguments like these? Is this question tough or easy as per 700+ standard
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Outsourcing is the practice of obtaining from independent suppliers [#permalink]
Yes I believe you can say that it is the analyst’s conclusion. But in the given argument the complete statement “Some analysts maintain that a company should outsource a product or service if an independent supplier can provide it at a lower cost, since the goal of any company is to maximize its profit.” serves as a counter premise as it goes in the opposite direction of the author’s main conclusion.

To identify the main conclusion properly, you can refer to posts by many experts in GMAT Club. Also to practice finding main conclusion you can use the question type filter to see only “main conclusion” type problems.

We can’t really judge the difficulty of a question based on only few parameters like identifying the intermediate conclusion in this problem is really hard, but is it really needed to solve the problem correctly? I don’t think so, because you can see Chetan2u used pure logic to arrive at the correct answer without ever discussing about the know how’s of that intermediate conclusion. So I would say it’s not a very very difficult qn 805+ but you can expect such 2-3 question on your test with similar or higher difficulty than this (based on my test experiences)

Cheers

Posted from my mobile device

Originally posted by 8Harshitsharma on 21 Apr 2024, 11:15.
Last edited by 8Harshitsharma on 22 Apr 2024, 03:36, edited 1 time in total.
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Re: Outsourcing is the practice of obtaining from independent suppliers [#permalink]
Thanks a lot brother!! Guess I have to become better at verbal now.
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Outsourcing is the practice of obtaining from independent suppliers [#permalink]
My understanding ->

Structure of the argument ->

- The author first defines "outsourcing" for us: opting for a 3rd party for a product/service instead of continuing to do it in-house.

BF1 - is simply the author providing a definition.

- Now, we see the analysts' argument presented:

>> Their conclusion: a company should outsource if an independent supplier can provide the product/service at a lower cost
>> The justification provided: because the goal of any company is to maximize its profit. (less cost helps create more profit).

- Next, we see a claim made by the author. We realize that this claim is technically a conclusion as we read on, because the author provides a reasoning for it in subsequent sentences.

>> Author's conclusion: That goal (maximizing profits), however, could require a company to make the opposite decision (i.e., in-house instead of outsourcing).

Author's reasoning for the above conclusion

>> Companies that outsource generally dismantle some of their capabilities (BF2). Factual truth.
>>  In doing so, they may become dependent on some suppliers
>> The companies have no control on these suppliers. So, their ops, their supply is not safe (these could impact profits). It could be threatened because they are dependent on suppliers they have zero control over.

The above reasoning supports the author's conclusion that the goal of maximising profits could require i.e., make it mandatory for a company to go in-house rather than outsource. (because in the case of outsourcing, there could be a legitimate threat to profits because of dependency on suppliers the company has no control over).

BF2 - is clearly a fact that is used to support a conclusion made by the author.

But wait - is the above conclusion the author's main conclusion from the overall argument?

No. The author adds a little something extra here.

- "Thus, a company's long-term profitability might be better protected by not outsourcing."

>> Main Conclusion: A company's long-term profitability might be better protected by not outsourcing.
>> Reasoning:
Because it could be that the goal of maximising profits can only be achieved ("require") by going in-house rather than outsourcing (intermediate conclusion), it is that a company's long term profitability might actually be better protected by not outsourcing.

So, in essence ->
BF1 - is simply the author providing a definition.
BF2 - is a fact that is used to support an intermediate conclusion made by the author, which is used to support the main conclusion of the argument.

Choice E makes most sense.

Choice Analysis
• Choice A:
1. BF1
1. Outsourcing can be called a phenomenon.
2. But the explanation of what outsourcing is is not an issue in the argument.
3. BF1 is incorrect.
2. BF2
1. The second is a fact related to outsourcing (what happens when outsourcing is done). It is not an explanation of what outsourcing is. More importantly, it is considered as a factual truth. The argument does not “conclude” that it is correct. It is considered correct as is.
2. So, BF2 is also shady.
• Choice B:
1. BF1
1. Same as choice A. Incorrect.
2. BF2
1. BF2 is evidence used to support the intermediate conclusion that the goal of maximising profits could require a company to go for in-house instead of outsourcing. It is not evidence in support of some proposed explanation of the phenomenon of outsourcing. Beyond the stated definition, there is no explanation of outsourcing. “Proposed explanation of that phenomenon” does not make much sense.
2. BF2 is also incorrect.
• Choice C:
1. BF1
1. Correct. The whole argument is concerned with outsourcing. BF1 provides the definition of this key term.
2. BF2
1. BF2 is a factual truth (premise) used to support the intermediate conclusion. It is not the intermediate conclusion.
2. BF2 is incorrect.
• Choice D:
1. BF1
1. Correct. Same as choice C.
2. BF2
1. BF2 is a generalization, yes. It tells us something companies that outsource generally do.
2. It is used to support a conclusion. Also yes, as we have seen before.
3. But the conclusion BF2 supports is not something the argument rejects. Nope. That conclusion is in fact used to support the main conclusion of the argument.
4. So, BF2 is incorrect.
• Choice E:
1. BF1
1. Correct. Same as choice C.
2. BF2
1. BF2 can be considered as evidence.
2. It is indeed used to support an intermediate conclusion.
3. That intermediate conclusion is indeed used to support the main conclusion of the argument.
4. So, BF2 is also correct.
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Re: Outsourcing is the practice of obtaining from independent suppliers [#permalink]
I am curious as to how BF2 is an evidence. I feel it is an "opinion" and hence I hesitated in marking this option.
OokandGluk wrote:
chetan2u wrote:
ashutosh_73 wrote:
­Outsourcing is the practice of obtaining from independent suppliers products or services that a company previously provided for itself. Some analysts maintain that a company should outsource a product or service if an independent supplier can provide it at a lower cost, since the goal of any company is to maximize its profit. That goal, however, could require a company to make the opposite decision. Companies that outsource generally dismantle some of their capabilities. In so doing, they might make themselves totally dependent on just a few outside suppliers. Since the outsourcing companies do not control the priorities of those suppliers, the continuity of supply and thus of their own operations could be threatened. Thus, a company's long-term profitability might be better protected by not outsourcing.

In the argument given, the two boldfaced portions play which of the following roles?

A) The first describes a phenomenon the explanation of which is at issue in the argument; the second is the explanation that the argument concludes is correct.
B) The first describes a phenomenon the explanation of which is at issue in the argument; the second provides evidence in support of a proposed explanation of that phenomenon.
C) The first defines a key term used throughout the argument; the second is an intermediate conclusion drawn to support the main conclusion of the argument.
D) The first defines a key term used throughout the argument; the second is a generalization that has been used to support a conclusion that the argument rejects.
E) The first defines a key term used throughout the argument; the second provides evidence in support of an intermediate conclusion that is drawn to support the main conclusion of the argument.­

­The first bold describes the term Outsourcing, so C, D and E are correct.

Next, the second bold is something that happens or a permise or a fact but surely not a conclusion or an intermediate conclusion, so C is out.

D says that the second bold supports the conclusion that argument rejects while E says that the second bold supports the main conclusion.

The main conclusion is 'Thus, a company's long-term profitability might be better protected by not outsourcing.'
The second bold talks of the fact that generally companies that outsouce a product dismantle the factory/equipment/capabilities that were used to produce the items being outsourced.
But doing so could tempt the firm that provides outsourced material to ask for better price that may be actually not be economiocal.

Thus, the second bold supports the main conclusion of the argument.

E

­What is the intermediate conclusion? Option E says that the Bold Face is an evidence to support intermediate conclusion. However I see that you have only mentioned the main conclusion and said that Option E is right?­
Is the second last sentence the Intermediate conclusion

­
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Outsourcing is the practice of obtaining from independent suppliers [#permalink]
1
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K-ja wrote:
I am curious as to how BF2 is an evidence. I feel it is an "opinion" and hence I hesitated in marking this option.
­

­In the BF2, the keyword to look out for is "generally" . When we use that word, it means that we are trying to convey something which happens in a general sense (something which is prevalent/common and not opinionated) .
If the sentence had been like "Companies that outsource should dismantle some of their capabilities", then we can say that it is the Author's opinion.­
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Outsourcing is the practice of obtaining from independent suppliers [#permalink]
­@OokandGluk is spot on!

Even in our everyday speech, when we use "generally", we are typically trying to pass off something as a factual truth.
For instance - "generally, countries that have huge military spending tend to be military superpowers"

This is me trying to say - "here is a fact. Typically (generally), it so happens that countries that have hige military spending also happen to be military superpowers." I as the author am trying to present this statement as a factual truth.

I could state the same fact this way - "90% of countries that have hige military spending also happen to be military superpowers.".

Both these sentences mean the same for all practical purposes. I (the author) am telling you that typically, X is the situation.

So -> "Companies that outsource generally dismantle some of their capabilities".

This is the author telling us that typically (say, for example, in 70% of cases), companies that outsource dismantle some of their capabilities. This is presented as a factual truth.
­
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Re: Outsourcing is the practice of obtaining from independent suppliers [#permalink]
­A) The first describes a phenomenon the explanation of which is at issue in the argument; the second is the explanation that the argument concludes is correct.
"the explanation of which is at issue in the argument" - not true. Hence reject.

B) The first describes a phenomenon the explanation of which is at issue in the argument; the second provides evidence in support of a proposed explanation of that phenomenon.
"the explanation of which is at issue in the argument" - not true. Hence reject.

So, it's among C, D, E.

The main conclusion is - "Thus, a company's long-term profitability might be better protected by not outsourcing."
Intermediate conclusion - "the continuity of supply and thus of their own operations could be threatened"
The line "Companies that outsource generally dismantle some of their capabilities" provides evidence for the intermediate conclusion.

C) The first defines a key term used throughout the argument; the second is an intermediate conclusion drawn to support the main conclusion of the argument.
"Companies that outsource generally dismantle some of their capabilities" - is not a conclusion. It is a premise or evidence.

D) The first defines a key term used throughout the argument; the second is a generalization that has been used to support a conclusion that the argument rejects.
Conclusion argument rejects? No. It supports the conclusion argument advocates.

E) The first defines a key term used throughout the argument; the second provides evidence in support of an intermediate conclusion that is drawn to support the main conclusion of the argument.­
The main conclusion is - "Thus, a company's long-term profitability might be better protected by not outsourcing."
Intermediate conclusion - "the continuity of supply and thus of their own operations could be threatened"
The line "Companies that outsource generally dismantle some of their capabilities" provides evidence for the intermediate conclusion.

Hence E.
Re: Outsourcing is the practice of obtaining from independent suppliers [#permalink]
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