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What is the second danger, besides late delivery, in buying production materials from outside?
AThe supplier may employ more workers than the buyer
BThe supplier may be located in a different city
CInferior parts can damage the buyer's reputation
DThe buyer may have to publish the purchase price
Answer & Solution
Correct answer: C. Inferior parts can damage the buyer's reputation
1. The first danger of buying outside is that the parts arrive late and production stops.
2. The second is that the parts arrive on time but are inferior.
3. Inferior parts or materials can damage a firm's reputation for producing high-quality goods.
4. Both dangers explain why building strong relationships with quality suppliers has to be a priority.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section Make or Buy?_
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