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The Essentials of Supply Chain Management: New Business Concepts and Applications by Hokey Min

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8. Sourcing

“Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation.”

—Larry Elder

Learning Objectives

After reading this chapter, you should be able to:

• Understand the role of sourcing in supply chain management.

• Identify factors influencing in-housing or outsourcing (or “make-or-buy”) decisions.

• Understand the rationale behind outsourcing and the key to the success of outsourcing operations.

• Understand what truly drives costs and how to control them.

• Differentiate between traditional costing and activity-based costing.

• Recognize and identify the distinction ...

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