Which of the Following Is a Reason for Favoring Single

question 24

Multiple Choice

Which of the following is a reason for favoring single sourcing?

• A)Encourages competition among suppliers
• B)Spreads the risk of supply interruption
• C)Reduces variabilities in quality levels
• D)Reduces information about new processing technologies

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Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.

Operating Costs

Expenses associated with the operation of a business, including costs of goods sold and administrative expenses.

Annual Cash Inflows

The total amount of money, often from sales, investments, or financing, that flows into a company over a year.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument, in order to determine its present value.