Spot Markets Are an Efficient Way for the Firm to Purchase

question 150

Multiple Choice

Spot markets are an efficient way for the firm to purchase inputs if:

• A) opportunism is not a problem.
• B) suppliers engage in hold-up.
• C) profit sharing is used to compensate managers.
• D) the supplier needs specialized investment to produce the input.

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Definitions:

MRP II System

Manufacturing Resource Planning, an integrated method for effective planning of all resources of a manufacturing company.

Closed-Loop MRP

A materials requirement planning system that incorporates feedback to continuously update and improve the planning process based on actual performance.

Bill of Material

A comprehensive list that outlines all the raw materials, components, and assemblies needed to manufacture a product.

Product A

A generic term used to reference a specific item or entity produced by a business or organization.