Shifting manufacturing tasks to another country to lower costs is known as which practice?

• A. Outsourcing
• B. Insourcing
• C. Nearshoring
• D. Automation

Answer: (A)

Outsourcing means hiring an external company to handle a business function instead of doing it in-house, and it often involves shifting production to a different country to lower costs. By contracting manufacturing tasks to outside suppliers abroad, a company can take advantage of lower labor costs, scale more efficiently, and focus on core activities. This differs from insourcing, which keeps work inside the organization; nearshoring, which moves work to a nearby country to balance cost with logistics; and automation, which uses machines to perform tasks. While moving work overseas is often described as offshoring, the broader concept here is outsourcing—the practice of obtaining goods or services from an external provider to improve efficiency or reduce costs.