Question

Icarus Inc. manufactures fighter planes for the government. It made a strategic decision to outsource the production of wings and turbines to another firm for the purpose of reducing production cost and development time by two years. However, the outsourcing provider developed the planes' wings and turbines using low-grade material, which led to Icarus Inc. losing its contract with the government. The loss of time and revenue was non-amendable and the company was closed down eventually. Which of the following issues associated with outsourcing best describes the cause of Icarus Inc. shutting down?
a. Security breachesb. Legal issuesc. Quality problemsd. Employee morale

Answer 1

Answer:

The correct answer is letter "C": Quality problems.

Explanation:

Outsourcing is the practice by which a company hires a third party to be in charge of the production of what the company typically does but at lower costs. However, in some cases, the company does not have control over the quality standards of the third party, which is likely to use low-quality assets to profit as well.