Sourcing Inputs from Large-Scale, Centralized Suppliers Allows Firms to Obtain

question 58

True/False

Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations.

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Definitions:

Master Account

A central account that can control or aggregate several sub-accounts, often used in finance for managing investments or in banking.

Lockbox System

A service offered by banks to companies for the rapid collection of customer payments, by providing a special address to which payments are sent directly.

Opportunity Costs

The loss of potential gains from other alternatives when one alternative is chosen.

Target Cash Balance

The optimal amount of cash a company sets as a goal to maintain for operational and contingency needs.