Practice free →
HomeBBA OperationsOperations ManagementAchieving World-Class Operations Management › Why does a firm that buys production materials o…

Why does a firm that buys production materials outside need reliable suppliers?

ABecause reliable suppliers charge lower prices
BBecause reliable suppliers never need any contract
CBecause unreliable delivery can halt production
DBecause reliable suppliers pay the shipping costs
Answer & Solution
Correct answer: C. Because unreliable delivery can halt production
1. A firm buying outside is depending on someone else to keep its line running. 2. Having to shut down production because vital parts were not delivered on time is a costly disaster. 3. That is why firms must consider whether outside sources can supply reliably as well as cheaply. 4. Reliability is not the same as low price, so option A confuses two separate supplier qualities. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section Make or Buy?_
Solve this in the app — BBA Operations practice & 24k+ MCQs →
Related questions