Please choose one answer and clearly identify the answer choosen!!!

There are often substantial opportunities for negotiation if the purchaser is fully familiar with the financial status of a supplier. For example, the offer of advance payment or cash discounts may be highly attractive to a firm short of working capital. A supplier with substantial inventories may be able to offer supply assurance and a degree of price protection at times of shortages.

True

False

There are various risk avoidance strategies including hedging (taking an offsetting position in a related security, such as a futures contract), requiring bid or performance bonds to protect the buying organization in the event a supplier fails to perform, and avoiding doing business in certain high risk countries.

True

False

Which of the following is NOT true about supplier evaluation?

Local suppliers are less responsive to the buying firms changing needs and cannot economically make frequent smaller deliveries.

Purchasers always want to select suppliers who are profitable and growing.

An in-depth evaluation of all potential supply sources should be conducted for the purchase of items in critical and strategic category.

Purchasing from competitors may limit information sharing between the parties.

Although _____ provides optimum leverage and power over the supplier, _____ provides improved assurance of supply.

domestic sourcing.off-shore sourcing

dual sourcing.single sourcing

single sourcing.multiple sourcing

single sourcing.sole sourcing