What is a disadvantage of outsourcing the disposal of toxic metals?

• A. Reduces regulatory compliance issues
• B. Improves efficiency
• C. Increases variable costs per tonne processed
• D. Decreases quality control

Answer: (C)

Outsourcing disposal shifts some costs from fixed to variable. When a company handles disposal in-house, it may operate with fixed expenses like equipment, facilities, and staff. If it contracts a third party, the cost becomes a per-tonne charge plus any service fees, transport, and handling costs. If these per-tonne fees end up higher than the company’s own marginal disposal cost, the variable cost per tonne processed rises. That makes disposal more expensive on a per-unit basis and can reduce cost predictability, which is a clear downside of outsourcing in this scenario.