Question

what is contract manufacturing? explain its merits and de merits​

Answer 1

Answer:

Contract manufacturing refers to types of international business where a firm enters into contract with some local manufactures in foreign countries to get certain components of goods produced as per their specifications. It is also called outsourcing.

# Merits of contract Manufacturing.

@ Less investment

@ Less risky

@ Low cost

@ Better capacity utilization

@ An opportunity for local producer to become international

# Demerits of contract manufacturing.

@ No authority to sell output

@ Deviation from products design and quality specifications

@ Loses control over manufacturing process