Question

An advantage of buying component parts, or even an entire product, from independent suppliers is that:

a. The firm will have access to superior quality raw materials and will deliver high-quality products.

b. The firm will be able to maintain strict control over its proprietary technology.

c. The firm can maintain its flexibility by switching orders according to circumstances.

d. It can make planning, coordination, and scheduling of adjacent processes easier for the firm.

Answer 1

Buying component parts from independent suppliers gives a firm the flexibility to adjust orders and respond to changing market demands quickly, avoiding large inventory costs.

Step-by-step explanation:

An advantage of buying component parts, or even an entire product, from independent suppliers is that the firm can maintain its flexibility by switching orders according to circumstances.

This practice allows the firm to adapt to changing market demands, manage production schedules more effectively, and potentially avoid the costs and risks associated with stockpiling large inventories as seen in traditional warehouse storage. Such a strategy can be particularly beneficial in industries where product lifecycles are short or demand is unpredictable, providing the firm with agility to respond quickly to new opportunities or competitive threats.