BU435 Chapter Notes - Chapter 15-16: Brightstar Corporation, Outsourcing, Marginal Revenue
Document Summary
Key point: a third party may be able to provide a sustainable growth of the surplus by aggregating to a higher level than the firm itself. The growth in surplus comes from aggregating capacity, inventory, inbound or out- bound transportation, warehousing, procurement, information, receivables, or relationships to a level that the firm cannot achieve on its own. A growth in surplus may also occur if the third party has lower costs or higher quality because of specialization or learning. Key point: a firm gains the most by outsourcing to a third party if its needs are small, highly uncertain, and shared by other firms sourcing from the same third party. Strategic factors in sourcing: support for the business strategy, improve firm focus. Third-party logistics providers: third-party logistics (3pl) providers performs one or more of the logistics activities relating to the flow of product, information, and funds that could be performed by the firm itself.
