Figure 13-2. ColorPro uses part 87A in the production of color printers.Unit manufacturing costs for part 87A are:
ColorPro uses 100,000 units of 87A per year.Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12.Fixed overhead is unavoidable.
Refer to Figure 13-2.Which of the following is a qualitative factor that might affect ColorPro's decision?
A)Filbert has an outstanding reputation for quality.
B)Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products.
C)Filbert is known for the reliability of its products.
D)Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor.
E)all of these

Question

Figure 13-2. ColorPro uses part 87A in the production of color printers.Unit manufacturing costs for part 87A are:
 ColorPro uses 100,000 units of 87A per year.Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12.Fixed overhead is unavoidable.
Refer to Figure 13-2.Which of the following is a qualitative factor that might affect ColorPro's decision?
A)Filbert has an outstanding reputation for quality. 
B)Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products. 
C)Filbert is known for the reliability of its products. 
D)Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor. 
E)all of these

Quizplus · Accepted Answer

All of the options presented are qualitative factors that might affect ColorPro's decision. Option A highlights the importance of Filbert's reputation for quality, which could be a significant factor in deciding to purchase parts from them. Option B highlights the potential benefits of working with Filbert beyond just the sale of parts (JIT standards), which could be a factor in the long-term relationship between the two companies. Option C emphasizes Filbert's reputation for reliability, which could be important in terms of ensuring that ColorPro's production is not disrupted by faulty parts. Option D may also be a factor, as avoiding layoffs could be an important consideration for ColorPro's management.