The relocation of business processes and services to a lower-cost foreign location.

• A. Nearshoring
• B. Outsourcing
• C. Insourcing
• D. Offshoring

Answer: (D)

Relocating business processes to a cheaper country is offshoring. The main idea is to move activities to a foreign location to gain cost advantages, often from cheaper labor, taxes, or regulatory conditions. This can be done either by keeping the work inside the company through a foreign subsidiary (captive offshoring) or by contracting with an external provider in the foreign country (offshore outsourcing).

This differs from nearshoring, which also involves a foreign location but typically a nearby country; from outsourcing, which focuses on hiring another firm to perform the work (which could be domestic or foreign); and from insourcing, which keeps activities in-house rather than moving them abroad. The description—foreign location and lower costs—fits offshoring best.