ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure.

Detailed explanation-2: -In economics, factors of production are the resources people use to produce goods and services; they are the building blocks of the economy. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.

Detailed explanation-3: -Procurement is the method of discovering and agreeing to terms and purchasing goods, services, or other works from an external source, often with the use of a tendering or competitive bidding process. The term may also refer to a contractual obligation to “procure", i.e. to “ensure” that something is done.

Detailed explanation-4: -Some functions that companies may decide to outsource include payroll, information technology, research and development, and customer care services. Companies decide to outsource to reduce the costs of their operations or to increase their efficiency.

Detailed explanation-5: -Offshoring is the practice of moving a business process to a foreign country but retaining control of it. A firm that outsources its internal business activities is called the client firm. A firm that outsources its internal business activities is called the outsource provider.