Question

Tru Diva, a brand of women's apparel and accessories, uses contract manufacturers in different countries. The company benefits because of the lower cost of labor and minimal government regulations in other countries compared to its home country. This is an example of ___.a. franchisingb. barteringc. benchmarkingd. reverse engineeringe. outsourcing

Answer 1

Answer: Option E

Explanation:

In contract manufacturing the goods are produced by a firm under a brand name of other firm on the basis of the contract. The contract manufacturers sign contracts with more than one firm to produce the goods. This type of manufacturing is mostly used in international markets due to availability of cheap labor and materials used for production in manufacturing countries.

For some of the products the contract manufacturers even provide the service of designing, distributing, assembly and manufacturing. the regulations for production also less in these countries. Contract manufacturers are found mostly in developing countries.