Outsourcing is the practice of obtaining from an independent supplier a product or service that a company has previously provided for itself
Since a company's chief objective is to realize the highest possible year-end profits, any product or service that can be obtained from an independent supplier for less than it would cost the company to provide the product or service on its own should be outsourced
If a company decides to use independent suppliers for a product, it can generally exploit the vigorous competition arising among several firms that are interested in supplying that product.