BQT Manufacturing produces electric lamps. To produce these lamps, BQT must either make or acquire bases for the lamps. Currently, the company outsources the production of the bases for their lamps to the ACE Lamp Company. BQT maintains ownership of the machinery that is used to produce the bases. ACE uses BQT’s machines at plants owned by ACE. 

a. Why do you think BQT is subcontracting the production of the bases? 

b. Why do you think BQT maintains ownership of the production equipment? 

c. What problems might be caused by BQT’s maintaining ownership of the production equipment? 

d. What might BQT do to reduce the magnitude of these problems?