Final answer:
The practice of Quality Air utilizing other production companies for parts of its jets is known as outsourcing. It allows companies to focus on core activities and leverage global resources for cost-efficiency and innovation.
Step-by-step explanation:
Quality Air, a company that builds airplanes, typically utilizes other production companies that specialize in certain parts for its jets; this practice is known as outsourcing.
Outsourcing is a business practice where a company contracts an outside firm to perform tasks that could potentially be completed internally. This often includes jobs in another country, which can be more cost-effective due to lower wages. The rise of global trade agreements and the advancement of transportation and communication have facilitated the spread of outsourcing as a common strategy to reduce costs and focus on core competencies within a company.
By practicing outsourcing, companies can utilize global assembly lines and form intra-industry trade, leading to specialized learning and economies of scale. This approach allows companies to focus on what they excel at while leveraging global resources for enhanced efficiency and innovation.