The Relationship Between Commitment and Strategic Options May Be Beast

question 62

Multiple Choice

The relationship between commitment and strategic options may be beast described as:

• A)Commitments increase the value of real options
• B)By committing to a set of options,a firm can reconcile two sources of value: value from deterring competitors and value from real options
• C)Making commitments inevitably involve giving up options
• D)The two reside in different realms of analysis: commitments can be analyzed using game theory; real options can be analyzed using financial theory

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Definitions:

Strategic Sourcing

An approach to procurement that emphasizes continuous improvement and development of purchasing activities to enhance competitive advantage.

Strategic Sourcing Process

A method used by organizations to evaluate and engage suppliers with the objective of achieving cost savings, improving quality, and obtaining more favorable terms.

Sourcing Strategy

The approach an organization takes to manage procurement processes and supplier relationships to optimize cost, quality, and supply reliability.

Supplier Selection Criteria

The standards or benchmarks that companies use to evaluate and choose among potential suppliers.