A company's supplier for a critical part was selected based on the lowest purchase price.Six months later, the company's warranty costs began to rises because of defective parts.The company has experienced:
A)Reduced sustainability.
B)Higher total costs of ownership.
C)Problems with availability of resources
D)Higher levels of spend analysis.

Question

Quizplus · Accepted Answer

Selecting a supplier based solely on the lowest purchase price can result in higher total costs of ownership, including warranty costs. This can ultimately decrease the company's sustainability as they are not able to maintain profitability and customer satisfaction.

A Company's Supplier for a Critical Part Was Selected Based