Charles Wood, Purchasing Manager for a Company That Makes Golf

question 104

Multiple Choice

Charles Wood, purchasing manager for a company that makes golf carts, posted the purchase specifications for the seats on a new golf cart model his firm is building. Four suppliers submitted _____ that included the terms of sale each had to offer.

• A) operational linkages
• B) an auction
• C) negotiated contracts
• D) competitive bids
• E) defined sales procedures

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Definitions:

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Increasing Costs

This refers to a situation where the costs of production increase as the output level increases, often seen in industries with limited resources.

Production Efficiencies

Occurs when a firm or economy can no longer produce additional amounts of a good without lowering the production level of another product.