An advantage of engaging in in-house production of products and components is that:

• A. the firm can maintain greater control over quality and production processes
• B. it always leads to lower costs compared to outsourcing
• C. it eliminates the need for skilled labor
• D. it guarantees access to the latest technology

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of in-house production versus outsourcing. In-house production means the firm produces goods or components internally, while outsourcing means contracting external suppliers to produce them.
2. Step 2: Identify the potential advantages of in-house production. These often include greater control over the production process, quality assurance, and flexibility in managing production schedules.
3. Step 3: Recognize that in-house production does not always lead to lower costs. Sometimes outsourcing can be cheaper due to economies of scale or specialization by suppliers.
4. Step 4: Note that in-house production does not eliminate the need for skilled labor; in fact, it may require more skilled workers to manage and operate production facilities.
5. Step 5: Understand that in-house production does not guarantee access to the latest technology, as external suppliers might specialize in advanced technologies and innovations.