Which term denotes producing abroad to reduce costs with limited strategic involvement?

• A. Offshoring
• B. Outsourcing
• C. Server Factory
• D. Offshore Factory

Answer: (D)

The concept being tested is producing abroad to lower costs while keeping strategic control limited, which is best described by offshore factory. It refers to owning or operating a manufacturing facility in another country to reduce production costs, with the home office retaining only minimal strategic involvement and day-to-day decisions handled locally. This fits how an overseas plant can deliver savings without outsourcing the work to a third party.

This differs from offshoring in general, which is moving processes overseas and can include various arrangements, not necessarily owning the facility. It also differs from outsourcing, where production is contracted to an external supplier rather than run in a company-owned plant. The term offshore factory specifically highlights having a production site abroad under limited strategic direction.