Why should cost alone not be the sole criterion when selecting between outsourcing contractors?

• A. Lower purchase price
• B. Shorter lead time
• C. Qualitative factors would be ignored
• D. Higher service levels

Answer: (C)

When choosing outsourcing contractors, price matters, but it doesn’t capture overall value. Qualitative factors—such as reliability, workmanship quality, safety record, communication, responsiveness, and the ability to meet specifications and schedules—significantly influence outcomes and total costs over the life of the contract. If you focus only on cost, you can overlook these important aspects, leading to higher long-term costs from defects, downtime, rework, missed deadlines, and greater risk exposure. A balanced assessment that weighs both price and qualitative factors typically yields better service quality, lower risk, and lower total lifecycle costs.