ACCA PM · Chapter 8 · Question 10 of 10
A manufacturer is considering outsourcing the production of a key component to an overseas supplier at a lower cost. Which of the following is a non-financial factor that should be considered?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The reliability of supply and the consistency of quality from the supplier
Explanation
Price differences, avoidable fixed costs and the opportunity cost of freed capacity are all financial factors included in the relevant cost calculation. Supply reliability, quality, loss of skills and confidentiality are qualitative factors that are harder to quantify but can be decisive.
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