CIMA Exam CIMAPRA19-E01-1 Topic 2 Question 88 Discussion

Actual exam question for CIMA's CIMAPRA19-E01-1 exam

Question #: 88
Topic #: 2

Bright Idea Co. specialises in manufacturing light bulb filaments. It is considering outsourcing some of it activities in order to reduce costs and improve customer service.

Which of the following is an example of asset specificity that is likely to be an important consideration in their decision?

AAn R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.

BA building that has been designed specifically for manufacturing light bulb filaments.

CHigh tech and expensive filling machines in the factory.

DA sales director who is well known and popular throughout the industry.

Show Suggested Answer

Suggested Answer: A

by Lera at May 23, 2024, 12:36 PM

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Brice

6 months ago

I'd go with Option C. Those high-tech and expensive filling machines are a major investment that would be hard to replicate elsewhere. Outsourcing that would be a risky move.

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Jade

6 months ago

What kind of 'Bright Idea' is it to outsource their core manufacturing capabilities? That's like a light bulb factory outsourcing the production of light bulbs!

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Melissa

6 months ago

I agree with Devora. The building is a prime example of asset specificity that Bright Idea Co. would need to consider carefully.

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Ceola

5 months ago

C) High tech and expensive filling machines in the factory.

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Chandra

5 months ago

B) A building that has been designed specifically for manufacturing light bulb filaments.

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Sarina

6 months ago

A) An R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.

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6 months ago

I agree, option B is definitely a key asset specificity to consider.

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