Acme has had problems with forecasting for an important chipset that is used in several of its measuring products. These problems have resulted in excess inventory and an increase in Working Capital Costs, Obsolescence, and Holding Costs. To mitigate this, Acme has decided to implement a Portfolio Contract strategy for the chipset, as follows:

Base Commitment: 40% of potential volume

Option Level: 30% of potential volume

Spot Market purchase: 30% of potential volume

However, Acme still feels that this exposes it to a higher risk of excess inventory and, potentially, higher purchase costs. So, to pass some of the risks onto its suppliers, a good strategy for Acme would be to :

Group of answer choices

Increase its percentage for Spot Market Purchase

Increase its Option Level with suppliers

Increase it's Base Commitment Level

Reduce its Base Commitment level

Acme is considering outsourcing one of its high-volume, standard products (MX-14) to HCC Manufacturing. Acme wants to reduce its costs of manufacture and design and take advantage of HCCs scale and design capabilities. HCC is, however, located offshore in a country that has had strained trade relations with the US (where Acme is located). Acmes COO, while leaning towards outsourcing the product, wants to assess the risks in this move. The major risks in Outsourcing to HCC include:

Group of answer choices

D - HCC may have financial and scale objectives that conflict with those of the outsourcer

B - HCC or its government may steal Acmes Intellectual Property

All of the above

A - The country where HCC has its operations may disrupt supply for political reasons

C - Acme may lose its capacity and capability to manufacture and design

A and C

None of the above