Question

Each of the following is a disadvantage of buying rather than making a component of a company's product except that Select one:

Answer 1

Answer:

The correct answer is letter "C": Profitable product lines may be dropped.

Explanation:

The decision of making a product in-house or relying on an outsourcing manufacturer is evaluated mainly by comparing the costs that handling a new production line carries. While outsourcing can save a company a great amount of money in labor, equipment, materials, and knowledge, quality control is not managed directly.  

However, a new line of components in-house implies incurring in most costs that could conflict the production of existing profitable product lines that could see their numbers reduce gradually until the product drops.