Question

Pilot Motors Corporation is an automobile manufacturer. The company produces its own motors, tires, and other automobile parts. Pilot has the opportunity to purchase tires from another manufacturer instead of producing the tires in its own facility. This type of decision is typically known as a(n):A. outsourcing decision.
B. special order decision.
C. segment elimination decision.
D. asset replacement decision.

Answer 1

Answer:

The correct answer is the option A: outsourcing decision.

Explanation:

To begin with, the concept of ''outsourcing decision'' relates to the outsourcing decision matrix that is a model whose main purpose is to help the business' owner to understand better and identify if it is worth and safe to outsource an activity or if it is better that that activity stay-in-house. Therefore that Pilot Motors Corporation is taking an outsourcing decision due to the fact that they are considering the fact of stop manufacturing their own tires in order to purchasing them from another company.