Phoenix Systems Manufactures Computer Chips and Is Based in Canada

question 40

Multiple Choice

Phoenix Systems manufactures computer chips and is based in Canada. This year the company has begun working with suppliers in other countries, but the suppliers' quality levels have been erratic. Based on what you have read, which of these is the most cost-effective way to combat this problem?

• A)Hire a broker or intermediary in a supplier's country to determine if that country has a supplier capable of keeping quality standards high.
• B)Fire all the suppliers but one, and use the increased amount of work to bargain for a lower cost per chip.
• C)Hire only Canada-based suppliers so Phoenix can take advantage of lower transportation costs and can more closely supervise product creation.
• D)Eliminate all suppliers and create computer chips in house with a specially trained staff.

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Definitions:

Compounded Monthly

An interest calculation method where the interest earned is added to the principal every month, thus earning interest on interest from the preceding month.

Withdraw

To remove funds from an account, or to take back or remove an offer, statement, or participation.

Compounded Annually

Interest calculated on the principal and previously accumulated interest once a year.

Compounded Monthly

Interest on an investment is calculated and added to the principal balance every month.