After Years of Negotiating Short-Term Contracts with Its Suppliers, Icon

question 117

Multiple Choice

After years of negotiating short-term contracts with its suppliers, Icon Images has decided to agree to longer-term contracts.In doing this, Icon Images is hoping to:

• A) reduce transaction costs.
• B) increase negotiating leverage with suppliers.
• C) become less dependent on its suppliers.
• D) move toward horizontal alliances with its suppliers.

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Definitions:

Chapters 7

A reference to Chapter 7 of the United States Bankruptcy Code, which provides for the liquidation of a debtor's assets to pay off creditors.

Composition

The agreement in bankruptcy proceedings where a debtor repays a portion of the debt instead of the full amount to creditors.

Creditors

Creditors are individuals or entities to whom money is owed by debtors for goods provided or loans given.

Chapter 13

A type of bankruptcy in the United States that allows individuals with a regular income to develop a plan to repay all or part of their debts under court supervision.