Which of the following describes outsourcing?

• A. Using internal resources exclusively
• B. Delegating operations to another company
• C. Increasing in-house capabilities
• D. Reducing transportation costs

Answer: (B)

Outsourcing is accurately described as delegating operations to another company. This process involves a business contracting with an external organization to perform services or produce goods that could be done internally. Outsourcing often allows organizations to focus on their core competencies, reduce costs, gain access to specialized expertise, and enhance efficiency. By entrusting specific functions to external providers, companies can leverage the strengths of those providers while also freeing up internal resources for other strategic initiatives.

The other options highlight aspects of operations management that are not aligned with the concept of outsourcing. Exclusively using internal resources refers to vertical integration rather than outsourcing. Increasing in-house capabilities suggests enhancing the internal workforce or resources, which directly contrasts with the outsourcing model. Reducing transportation costs is a potential benefit or consideration in logistics and supply chain management but does not define outsourcing itself.