What Non-Financial Factors Should Be Considered When Making a Decision

question 90

Multiple Choice

What non-financial factors should be considered when making a decision about buying rather than making a component of a company's product?

• A)Is the quality of the purchased component acceptable?
• B)Will the outside supplier increase prices significantly in the future?
• C)Will the supplier deliver on time?
• D)All of the above.

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Definitions:

Contracts

legally binding agreements between two or more parties that outline terms and conditions of a specific transaction or relationship.

Marginal Cost

The cost incurred to produce one additional unit of a good or service, critical for pricing and production decisions.

R&D

Research and Development, a business or governmental activity aimed at discovering new knowledge and its application.

Holdup

A situation in business where one party opportunistically takes advantage of another party because of preexisting commitments.