CIMA Exam CIMAPRA19-E01-1 Topic 5 Question 91 Discussion

Actual exam question for CIMA's CIMAPRA19-E01-1 exam

Question #: 91
Topic #: 5

Bright Idea Co. specialises in manufacturing light bulb filaments. It is considering outsourcing some of it activities in order to reduce costs and improve customer service.

Which of the following is an example of asset specificity that is likely to be an important consideration in their decision?

AAn R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.

BA building that has been designed specifically for manufacturing light bulb filaments.

CHigh tech and expensive filling machines in the factory.

DA sales director who is well known and popular throughout the industry.

Show Suggested Answer

Suggested Answer: A

by Oren at Jul 01, 2024, 08:52 PM

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Matilda

5 months ago

I think option D is not as relevant compared to the other options.

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Daryl

5 months ago

I see your point, but I think option A is also a key factor to consider.

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Ranee

5 months ago

D) A sales director? Really? That's about as asset-specific as a lightbulb filament in a solar panel.

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Ivan

5 months ago

A) An R&D manager with 18 years of experience? That's gotta be worth keeping in-house! Unless they can find a genie to grant them 18 years of expertise.

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Tambra

4 months ago

B) A building that has been designed specifically for manufacturing light bulb filaments.

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Stephanie

5 months ago

A) An R&D manager with 18 years of experience? That's gotta be worth keeping in-house!

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Bettina

5 months ago

I disagree, I believe option C is more crucial for their decision.

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5 months ago

B) A building that has been designed specifically for manufacturing light bulb filaments. That's clearly the most asset-specific option here. Outsourcing that would be a big risk.

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Carla

5 months ago

C) High tech and expensive filling machines in the factory.

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Jaime

5 months ago

A) An R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.

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