1.)

The qualitative and quantitative factors that will have to be considered before recommending that the company outsource are many

Factors to be considered while taking a decision to outsource are as follows:

Quantitative factors to be considered are as follows:

a.) When there is a decision to outsource then the organisation should focus on the unutilized capacity that has arisen as a result of this decision and the alternative use to which it can be put in order to make some gains.

b.) Whether as a result of the decision to outsource some other additional costs are incurred by the organisation in spite of not manufacturing the component which is compensation paid on termination or retrenchment of staff etc.

 

Qualitative factors to be considered are as follows:

a.) When the decision to outsource is done then care has to be taken, when the decision to choose a vendor is taken factors like customer support service given by vendors is also to be considered.

b.) Proper focus should be given to the vendor's ability to promptly communicate in the face of queries pr doubts being raised without any delay or wastage of time.

 

The quantitative and qualitative factors are the quality of products, quantity outsourced, the capability of the outsourcing vendor and their warehouse. You would also have to consider the employees who would lose their position if products were to be outsourced.

 

2.) Accounting information required to make an informed business decision could be in terms of the revised costs and estimated lower margins and prices of the company, the unit costs for all products, the price of product, assembly cost, wages paid to employees manufacturing products, and product profits. and the impact the outsourcing has on the profitability of the business.

 

3.) The information needed is financial in nature.

 

4.) The accounting information will be used to compare costs and profits to outsourced products,  for evaluating the impact it has on the profitability of the operations of the company. One thing is important is that We will look at whether outsourcing will have a higher

margin on products therefore creating an increase in profit.

 

5.) The different risks related to the outsourcing are given as below

a. There may be various hidden costs associated with the outsourced production

b.) Loss of control over the quality of the product

c.) Risk that the quality of output may not be up to the mark

Risk that the goods outsourced may not reach the manufacturer on time leading to loss of work and reputation. Another risk is deciding to outsource, and the vendor is not financially stable causing you to lose money because they can't afford to produce the

product in the time promised. hese risks could be minimized by having a manager who would go to the vendor's warehouse a few times a month to make sure products are being produced in a timely manner as well as to check on quality.