Which Purchasing Strategy Tends to Be Associated with a Low-Cost

question 10

Multiple Choice

Which purchasing strategy tends to be associated with a low-cost strategy?

• A)Purchase at low costs through quantity discounts; operate storage and warehouse facilities and control inventory efficiently..
• B)Purchase high-quality inputs,even if they cost more; conduct storage,warehouse,and inventory activities with extensive care,even if costs are higher.
• C)Purchase high-quality inputs,but only if costs are low; conduct storage,warehouse,and inventory activities with care,but only if costs are relatively low
• D)None of the above.

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Definitions:

Marginal Costs

The additional cost incurred in producing one more unit of a good or service, critical in decision-making regarding production volumes.

Standby Seats

Airline or event tickets made available last minute, typically at a lower price, for customers willing to wait for no-shows or extra capacity.

Full Capacity

The maximum level of output that a facility can produce under normal operating conditions.

Marginal Cost

The increase in total production costs from making one additional unit of a product or service.