Contracting out manufacturing may be more appropriate for high-value-a

QUESTION

Contracting out manufacturing may be more appropriate for high-value-added manufacturing

Indicate whether the statement is true or false.

ANSWER

FALSE
Contracting out manufacturing may be less appropriate for high-value-added manufacturing, in which firm-specific technology and skills add significant value to the product (e.g., the heavy equipment industry) and in which switching costs are correspondingly high.