FBLA Supply Chain Management Practice Test 2026 - Free Supply Chain Management Practice Questions and Study Guide

A primary reason for a company to consider outsourcing is insufficient capacity. When a business's internal resources are maxed out, and it cannot meet demand due to limited production capabilities or workforce limitations, outsourcing becomes an efficient solution. By outsourcing specific functions or production processes to third-party companies, a business can leverage additional capacity without the need to invest in new facilities, equipment, or hiring more employees. This allows the company to maintain or grow its output and meet customer expectations without facing the delays associated with increased internal capacity or the burden of overextending its existing resources.

Outsourcing can help a company remain competitive and responsive to market changes while managing its operational efficiency effectively.