Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations.

Question

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Centralized suppliers often have the scale and resources to produce inputs more efficiently and consistently, leading to lower costs and more reliable quality for firms that source from them. This can enhance overall operational efficiency.

Sourcing Inputs from Large-Scale, Centralized Suppliers Allows Firms to Obtain