1. What are the characteristics of “vertical integration?” How does having a vertically integrated operation affect the levels of various types of inventories?

2. What other possible reasons are there for Microfuse’s high inventory levels other than vertical integration? How might inventories be affected by increasing the level of outsourcing within Microfuse’s operations?

3. How might one define “limited outsourcing strategy” stated by Tom Cecil in the memo? Discuss the issue on both tactical and strategic levels.

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4. How would the trend of relocating manufacturing functions to the Asia regioninfluence Microfuse’s operations?

5. What is the difference between outsourcing and offshoring? What are the advantages and disadvantages of each in regard to Microfuse’s case?

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