A company adopts the supply chain strategy of contracting with a number of geographically dispersed suppliers just in case prices rise in one part of the world. This approach is known as:
A) price hopping.
B) hedging.
C) outsourcing.
D) futures.

Question

Quizplus · Accepted Answer

This approach is known as hedging, as it involves mitigating the risk of price fluctuations by diversifying suppliers across different regions. Price hopping is not a commonly used term in supply chain management, outsourcing refers to the delegation of certain business operations to a third-party, and futures refer to financial contracts that allow buyers and sellers to lock in prices for a future date.

A Company Adopts the Supply Chain Strategy of Contracting with a Number