Posted: July 14th, 2022
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How does outsourcing relate to production? Using the page in the file as a source.
Respond to the individual below and pose a question
Outsourcing relates to production in almost every way possible. Effective outsourcing is imperative to the completion of production. Outsourcing is defined as the complete transfer of a business process that has been traditionally operated and managed internally to an independently owned external organization (Benton Jr. 2014). Outsourcing is all the premature steps before production is ultimately introduced to the public eye, starting with an intricate evaluation surrounding whatever product is being manufactured. An industry manager along with a team discuss, analyze, and study an effective approach of how a project can be executed. From here, finances are estimated where a proposal can be made. A decrease in direct operational cost is what motivates the majority of outsourcing proposals. For an outsourcing proposal to be appealing, the cost reduction must be considerably lower than the existing direct operating cost. These first two stages are instrumental to production due to the evaluation of the business aspect of the operation (Training Industry 2022).
After business affairs are in order, a relationship is established between management and vendors, as well as contractors. This will formalize into two parties eventually constructing and solidifying their business relationship by way of a written agreement otherwise known as a contract. Thus, permitting the two businesses at hand to transition all responsibilities and resources to the supplier from the buyer. Once this is concluded successfully, the project is closed out, contracts are either transferred or completed and production is finalized.
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