GM typically solicits bids from global suppliers to produce a particular component and awards a 1-year contract to the supplier that submits the lowest bid. At the end of the year, a contract is once again put out for bid, and once again the lowest cost supplier is most likely to win the bid. Which of the following is GM using?
A) Strategic outsourcing
B) Competitive bidding
C) Strategic bidding
D) Long-term alliance
E) Hostage taking

Question

Quizplus · Accepted Answer

GM is using competitive bidding by soliciting bids from global suppliers and awarding the contract to the lowest bidder. This is a common practice in procurement and is used to drive down costs and ensure competitiveness among suppliers. Strategic outsourcing involves selectively outsourcing certain functions to gain strategic advantages, while strategic bidding involves evaluating other factors besides cost, such as quality and delivery time. Long-term alliances involve forging long-term relationships with suppliers to gain mutual benefits, while hostage taking is an illegal practice of seizing or threatening to harm someone to gain leverage in negotiations.

GM Typically Solicits Bids from Global Suppliers to Produce a Particular