The assembly of consumer electronics is an activity that was largely performed in-house until the 1990s. Today, assembly is mostly outsourced by original equipment manufacturers such as Apple. A firm should consider outsourcing if the growth in surplus is large with a small increase in risk. Third parties can increase the supply chain surplus effectively if they are able to aggregate supply chain assets or flows to a higher level than a firm itself can.
Your company is in the process of moving part of its production to a third party. You are required to explain the various mechanisms that third parties can use to grow the surplus. Your answer should include appropriate examples.