To discuss: the issues related to hiring third-party services and the way these issues can affect the financial viability.
Explanation of Solution
When a restaurant uses third-party services, it may face some operational issues. Some of these issues have been discussed below:
1)Misuse of confidential information: When a restaurant uses third-party services, it puts on the confidential information on risk, that can be used by the third-party for making personal gains.
2)Lack of flexibility: The restaurant may face difficulties in performing its operations. There is a possibility that third-party services might not be performed by skilled workers. Such a scenario may lead to poor quality of restaurant operations and can harm the firm in the long run.
3)Instability: The third party can go out of business at any time which can lead to difficulties in the management.
4)Unsatisfied services: The third-party service may fall behind the expectations of the restaurant. Also, customers might blame the restaurant for a mistake made by third party services.
The way in which these issues affect the financial viability of the restaurant are as discussed below:
1). Risk of uncertainties: When vital functions are outsourced, the restaurant might be dependent on the service provider and risks such as bankruptcy and financial loss cannot be controlled.
2)Market consequences: When the market price changes so frequently, the restaurant can take advantage of this by purchasing at the right time.
3)Extra-market consequences: These are the items that are not directly priced in the market, but in indirect ways, a price may be assigned to these items called shadow price by economists such as injuries and other uncertainties at the workplace.
Third-party services: It refers to the services that are rendered by a third party (party other than the company providing services and the client) and third-party service providers can be any agent, consultant, advisor or any independent contractor who is providing services to the main firm.
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ENGR.ECONOMIC ANALYSIS
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- Question 8 Which of the following is true about the concept of concentration? O All of the answers are correct. O O The lower the number of firms in a market, the lower the concentration. The higher the degree of rivalry amongst the firms, the lower the concentration. The lower the degree of rivalry amongst the firms, the higher the concentration. Previous 2 pts Next ->arrow_forwardQuestion 15 Price discrimination is usually defined as selling a product to different customers at The same price as costs of service are the same. Different prices even though costs of service are the same. The same price even though costs of service are different. Different prices as costs of service are different. ? 2 pts ◄ Previous Next -arrow_forwardQuestion 22 2 pts Use the information contained in the three graphs below to answer the following question. Which of the three curves could display an efficiency scale? (A) 5800 $700 5600 $500 (B) $800 $700 (C) ccc $400 $300 $200 $300 $200 $100 $100 $400 $300 $300 $100 1 $800 $700 S $600 A None of the curves could be the answer. B C ◄ Previous Next ->arrow_forward
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