A firm should decide to buy components from a supplier (as opposed to making them)
A) when it has excess plant capacity.
B) when it will require greater flexibility on the firm's part to accommodate the supplier.
C) if product quality would be the same (regardless of the firm's decision.)
D) if the risk of equipment obsolescence can be transferred to the supplier.

Question

Quizplus · Accepted Answer

The risk of equipment obsolescence can be transferred to the supplier if the firm decides to buy components from a supplier instead of making them.

A Firm Should Decide to Buy Components from a Supplier