Question

Why do companies choose to outsource work?

to increase profits
to improve products
to cut transportation costs
to develop local resources

Answer 1

Correct choices: to increase profits and to improve products.

- To increase profits: Yes — outsourcing often reduces labor, production or overhead costs, improving margins.
- To improve products: Yes — companies outsource to access specialized skills, technology or higher-quality suppliers that can improve product quality or innovation.

Not correct:
- To cut transportation costs: No — outsourcing (especially offshoring) often increases shipping/transport costs; reducing transportation is not a primary reason.
- To develop local resources: No — outsourcing means using external providers rather than developing in-house/local resources.