Question

Please discuss the advantages and disadvantages of off shoring of manufacturing to lower cost production areas.

Answer 1

Ans.

Advatages of Off- shoring -

1. Cheap labor

2. Cheap Operational Cost

3. Economies of scale

2 . Easy availability of skilled labor

3. Another advatage of off shoring is that you have a global talent pool ( wider knowledge base ), which helps in pace up the work.

4. Access to new markets

5. Companies recieves tax benefits from the government of that country.

Disadvantages of Off- shoring -

1. Issue's in communication

2. Cultural and Social differences

3. Security Issues - Strict Safety measures and protocols needs to be implemented , which is not economical.

4. Employment tends to shrink in the origin country(local economy). As they mainly employ the foreign labor of that particular area.

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