APICS Exam CSCP Topic 5 Question 97 Discussion

Actual exam question for APICS's CSCP exam

Question #: 97
Topic #: 5

[All CSCP Questions]

The primary risk associated with outsourcing innovative components to suppliers is:

Adecreased flexibility.

Bhigher carrying costs.

Cemployee turnover.

Dloss of competitive knowledge.

Show Suggested Answer

Suggested Answer: D

Outsourcing innovative components can lead to several risks, but the primary risk is the loss of competitive knowledge:

Intellectual Property: When innovative components are outsourced, there is a risk that critical intellectual property and proprietary knowledge will be transferred to or accessed by suppliers.

Competitive Advantage: These components often embody the firm's core competencies and technological advantages. Losing control over these can diminish the company's competitive edge.

Dependency on Suppliers: Relying on external suppliers for innovative parts can reduce the firm's ability to rapidly adapt and innovate, leading to decreased flexibility and potential delays in response to market changes.

While decreased flexibility and higher carrying costs are concerns, they are secondary to the risk of losing competitive knowledge.

Pisano, Gary P., and Willy C. Shih. 'Restoring American Competitiveness.' Harvard Business Review.

Quinn, James Brian. 'Strategic Outsourcing: Leveraging Knowledge Capabilities.' Sloan Management Review.

by Mable at Sep 18, 2024, 02:08 PM

Limited Time Offer

25%

Off

Get Premium CSCP Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Erick

2 months ago

Outsourcing innovation? That's like asking a toddler to build a rocket ship. I'll go with D and hope for the best!

upvoted 0 times

...

Gwenn

2 months ago

This question is just like my love life - full of risks and uncertainties! But I think D is the right answer here.

upvoted 0 times

...

Cheryl

2 months ago

But what about the loss of competitive knowledge? That's a big risk too.

upvoted 0 times

...

Elizabeth

2 months ago

I agree with Marnie, outsourcing can limit our ability to make changes quickly.

upvoted 0 times

...

Gary

2 months ago

Hmm, I'm torn between B and D. Higher carrying costs and loss of competitive knowledge both seem like major concerns to me.

upvoted 0 times

Trevor

29 days ago

A: That's true, but we can always find ways to manage carrying costs. Losing our competitive edge might be harder to recover from.

upvoted 0 times

...

Lou

29 days ago

B: I see your point, but higher carrying costs could also impact our bottom line significantly.

upvoted 0 times

...

Lashawna

1 months ago

Yes, losing competitive knowledge can also be a huge issue when outsourcing.

upvoted 0 times

...

Marget

1 months ago

D) loss of competitive knowledge.

upvoted 0 times

...

France

1 months ago

I agree, higher carrying costs can definitely be a major risk.

upvoted 0 times

...

Desmond

2 months ago

A: I think D is the bigger risk. Losing competitive knowledge could really hurt us in the long run.

upvoted 0 times

...

Laurel

2 months ago

B) higher carrying costs.

upvoted 0 times

...

Jennifer

2 months ago

A) decreased flexibility.

upvoted 0 times

...

Marnie

2 months ago

I think the primary risk is decreased flexibility.

upvoted 0 times

...

Vanna

2 months ago

I'd go with A. Decreased flexibility. You lose control over the development process when you outsource, and that's a recipe for rigidity.

upvoted 0 times

Letha

1 months ago

That's a good point, we could lose our edge if we rely too much on suppliers.

upvoted 0 times

...

Delfina

2 months ago

D) loss of competitive knowledge.

upvoted 0 times

...

Berry

2 months ago

I agree, outsourcing can limit our ability to make changes quickly.

upvoted 0 times

...

Jeanice

2 months ago

A) decreased flexibility.

upvoted 0 times

...

Roosevelt

3 months ago

Definitely D. Loss of competitive knowledge - that's the biggest risk when outsourcing innovative components. Can't afford to give away the secret sauce!

upvoted 0 times