What Legitimate Reason Might Management Have for Insisting That One

question 62

Multiple Choice

What legitimate reason might management have for insisting that one of its divisions buy a part from another division within the same company even though the buying division could source the part at a lower price externally?

• A)It wants to make use of excess capacity in the seller's division.
• B)It is concerned about the external supplier's ability to deliver the part on a timely basis.
• C)It wants to make use of excess capacity in the buyer's division.
• D)There is never a legitimate reason that justifies ordering a division to buy internally when it could source the product cheaper externally.

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Definitions:

Competitive Retail

Retail markets characterized by the presence of multiple sellers, leading to competitive pricing and variety for consumers.

Economic Value

The worth of a good or service determined by the benefit it provides to the buyer relative to its cost.

High Salaries

Compensation levels significantly above the average or median for similar roles or industries, often reflecting a high demand for specialized skills or experience.

Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based on factors like willingness to pay, market segmentation, or geographical location.