Question

Pilot Motors Corporation is an automobile manufacturer. The company produces its own motors, tires, and other automobile parts. Pilot has the opportunity to purchase tires from another manufacturer instead of producing the tires in its own facility. This type of decision is typically known as a(n):

Answer 1

Outsourcing decision

Step-by-step explanation:

Outsourcing is a practice by companies where products or services are obtained from third parties rather than being obtained internally.

The main aim of outsourcing is to reduce cost.

When it is cheaper to obtain a service for a particular job role, rather than training new staff to fill the position. The company is practising outsourcing.

In the given scenario Pilot has the opportunity to purchase tires from another manufacturer instead of producing the tires in its own facility.

This is an outsourcing decision most likely to reduce cost of producing automobile parts internally.