Final answer:
The best approach for a manager to maintain a high contribution margin is to seek competitive bids on components, rather than resort to threats or immediate offshoring which could have negative long-term effects.
Step-by-step explanation:
As a manager, to keep your contribution margin high on the products you sell, it would generally be advisable to choose option (b) Keep seeking competitive bids on your components. This is because competition among suppliers may result in lower costs for the components of your product, which can help you maintain a healthy contribution margin. In contrast, threatening vendors or moving production overseas without careful consideration could lead to short-term gains at the potential expense of long-term sustainability and could negatively affect your company's reputation and the quality of your products. Therefore, option (b) not only reflects the best business practice out of the options presented, but it also supports healthy competition, which ultimately benefits the overall economy, as illustrated by the idea that competition can lead to businesses offering better or less expensive products, which can earn them more profit and allow them to pay their employees more. In addition, it encourages efficiency and innovation within your supply chain.