See the full video lecture of this topic by clicking the below link: https://youtu.be/Ne7Z9Q15p6M . The ppt explains what is outsourcing, what are its potential risks and theories behind it. In the last it explains a numerical problem related to outsourcing external suppliers.

1. OUTSOURCING
HINDI / URDU
• WHY TO OUTSOURCE
• THEORY OF COMPARATIVE ADVANTAGE
• POTENTIAL RISKS INVOLVED
• THE FACTOR-RATING METHOD
• PROBLEM EXAMPLE
INHOUSE
OUTSUORCE

2. OUTSOURCING
Outsourcing is transferring activities that have traditionally been internal to external suppliers.
Outsourcing is increasing against both lower cost and more specialization in the
market.
A firm such as Apple find that their core competency is in creativity, innovation, and product design,
they may want to outsource manufacturing.

3. WHY TO OUTSOURCE
Theory of comparative advantage:
A theory which states that countries benefit from specializing in (and exporting) goods and services in which they
have relative advantage, and they benefit from importing goods and services in which they have a relative
disadvantage.
• According to the theory, if an external provider can perform activities more productively than the purchasing firm, then the
external provider should do the work. This allows the purchasing firm to focus on what it does best—its core competencies.
• Outsourcing the wrong activities can be a disaster. And even outsourcing non-core activities has risks.
• Potential risks involved are;
 Inadequate Planning & analysis
 Quality & Supply Chain Issues
 Increased Logistics & inventory costs.
 Potential creation of future competition
 If outsourced overseas, risks can increase.

4. RATING OUTSOURCE PROVIDERS
The factor-rating method provides an objective way to evaluate outsource providers.
ABC Pvt Ltd specialized in designing of high-rise office buildings, has decided to outsource its information technology
(IT) function. Three outsourcing providers are being actively considered: one in the U.S., one in India, and one in Israel.
PROBLEM STATEMENT:
• A list of 7 criteria's has been considered
critical.
• Each firm has been rated on a 1 – 5 scale,
with 5 being the highest.
• Above mentioned activities have been
performed by field experts.

5. THANKS
https://youtu.be/Ne7Z9Q15p6M
https://youtu.be/Ne7Z9Q15p6M
CLICK BELOW LINK AND SEE FULL YOUTUBE TUTORIAL EXPLAINING ALL
CONCEPTS