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Introduction:

Outsourcing is also known as Business Process Outsourcing. It is regarded as the process of hiring another individual or company, either domestically or internationally, to handle business activities for you.The practice of allowing certain job functions done outside a company instead of having an specific in-house department or employee handle them, functions can be outsourced to either a company or an individual. Is regarded as outsourcing.

Listed some of the negative effects of outsourcing are :

Lack Of Control:
A firm can provide direction in regard to it's needs to accomplish, but it has to risk some control when it outsource.

Time and effort
The selection of vendors process shouldn’t be taken very lightly. It takes a lot of time to research, test and select the right partner. Management needs to allocate the time for both choosing the contractor for the task and making sure that their work is meeting to the set targets.

Hidden costs
Company main reason to perform outsourcing is cost savings this it has to be aware of potential hidden costs.An outsourcing contract should cover the details of the service that the outsourcing company will be providing. Anything additional that may come up late and is not covered in the contract will constitute additional charges.

Let's consider the example :

Virgin Airlines and Navitaire:
At a point of time, Navitaire provided Virgin Airlines with outsourced internet booking, check-in, and boarding software system. Unfortunately their software crashed twice within a three-month period. Both times, it took them nearly 24 hours to get back up and make it running again . This led to thousands of grounded passengers and plenty of cancelled flights.
Thus this defines that your outsourced partner is only as good as their ability to quickly work through challenges and find solutions.

Overseas Language Barriers With an SEO Company:
Business consultant Jonathan Long has seen firsthand how costly it could be to select the wrong outsourced partner. He recalls one instance where a company he consulted with hired an overseas company to handle its SEO for less than $500 per month. Shortly after hiring them, the company released a press release that stated its products caused health issues. They obviously didn’t mean to say this, but the language barrier created confusion and wound up severely damaging the brand. If a company going to outsource your digital marketing to an SEO reseller, make sure it is choosing the right one.

Introduction:

Offshoring is regarded as the relocation of a business process from one country to the other country,typically an operational process, such as manufacturing, or supporting processes, such as accounting. This process refers to a company business, also state governments may employ offshoring. In recent terms only technical and administrative services have been offshored as far. Offshoring happens when the offshored work is done by means of an internal model, sometimes also referred as in-house offshore. In offshoring the practice of outsourcing operations is generally done overseas, it is usually performed by the companies belonging to the industrial countries to less-developed countries, with the intention of reducing the cost of running business.

Listing some of the critical clauses of the offshoring :

Increase Unemployment:
The biggest critical disadvantage of offshoring is that companies that offshore increases the level of unemployment of the local economy. Companies like nike and catterpillar have been victimized of snatching away jobs from Americans and sparing their existing work force in favor of other nationalities.

Time zone differences: Appropriate shift patterns need to be assigned to match with the time differences between zones.

Security Issues:
Whenever a company is offshoring it is entitled of sharing, transmitting data to another party, thus it is always at risk of security breach and compromised data integrity. When it comes to data there will always be transfer issues.

Higher offshore cost: Offshore cost of labor might be about 70% lower, but other utilities might come costly like electricity in some countries.

Lets consider the examples :

The two recent controversial outcome of offshoring projects have been publicized as if offshoring does not work. The most highlighted instance is Dell's return of some support activities to the U.S. The second is Conseco insurance company's 2001-2002 foray into owning its call center in India.

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It is given that inflation is 2.8%, meaning the value of 785 dollars this year, is actually equal to

785/(1+2.8%)

=785/(1.028)

=763.62.

Hence, his real wage this year as compared to last year is $763.62

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CPI in base year in 2016 = 100

CPI in 2017 = 100 * 1.156 = 115.6

CPI in 2018 = 115.6 * 1.078 = 124.62

CPI in 2019 = 128.5