Question

If a company decides to outsource and then has freed capacity, the decision on what to do with that freed capacity would be based upon:

a) Cost analysis
b) Market demand
c) Strategic goals
d) Employee satisfaction

Answer 1

The decision on what to do with freed capacity after outsourcing is based on cost analysis, market demand, and strategic goals.

Step-by-step explanation:

The decision on what to do with freed capacity after outsourcing would be based upon multiple factors, including:

1. Cost analysis: The company will evaluate the financial impact of using the freed capacity for various alternatives and choose the option that offers the most cost-effective solution.
2. Market demand: The company will consider the demand for its products or services in the market and use the freed capacity to meet that demand, such as increasing production or expanding into new markets.
3. Strategic goals: The company will align the use of freed capacity with its long-term strategic goals, such as investing in research and development, improving quality, or entering new business areas.