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HBX.CORE.v2024-11-30.q151
Question 139

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Question 139/151

A small electronics manufacturer patents a new device for securing internet servers. While this device consists of standard components and is simple to manufacture, it also contains proprietary engineering and design elements not widely known in the marketplace. After receiving a large order, which exceeds the company's current manufacturing capacity, the firm's supply management department is tasked with outsourcing the manufacture of the device to the most competitive sources available. As the supply management team evaluates selected suppliers, which of the following should be given the MOST consideration?

A. Component part availability

B. Risks to the company's intellectual property

C. Logistical vulnerabilities associated with offshore suppliers

D. Reduced product quality

Correct Answer: B

* Proprietary Elements: The device contains proprietary engineering and design elements that are not widely known.
* Intellectual Property (IP) Protection: Protecting these elements is critical to maintaining the company's competitive advantage.
* Supplier Evaluation: When evaluating suppliers, the risk of IP theft or misuse should be a primary consideration.
* Security Measures: Assessing suppliers' security measures and their ability to protect sensitive information is essential.
* Balancing Risks and Costs: While other factors like component availability and logistics are important, the potential impact of IP risks outweighs them due to the proprietary nature of the product. References
* WIPO (World Intellectual Property Organization) guidelines on intellectual property management.

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