Many organizations outsource their functions to specialist suppliers (e.g., for IT services, common suppliers are IBM, HP, and Accenture). What benefits do corporations derive from outsourcing? What transaction costs arise from these relationships?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Many organizations outsource their functions to specialist suppliers (e.g., for IT services, common suppliers are IBM, HP, and Accenture). What benefits do corporations derive from outsourcing? What transaction costs arise from these relationships?
You can choose to answer this through your own work experience: what services does your firm outsource, and what do you perceive as the benefits and transaction costs?

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