Which of the Following Statements Regarding Long-Term Supply Contracts Is

question 32

Multiple Choice

Which of the following statements regarding long-term supply contracts is FALSE?

• A)The market value of the contract at any point in time may not be easy to determine,making it difficult to track gains and losses.
• B)Long-term supply contracts are designed to eliminate credit risk.
• C)Long-term supply contracts insulate the firms from commodity price risk.
• D)Long-term supply contracts are bilateral contracts negotiated by a buyer and a seller.

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Definitions:

Operations Management

Focuses on the planning, organizing, and supervising of production, manufacturing, or the provision of services, ensuring efficient operations and effective management of resources.

Mass Customization

A strategy that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production.

Global Focus

An approach or strategy that considers the entire world as a sphere of operation or influence, emphasizing international markets and multicultural inclusivity.