In the end, the buying firm must determine whether the purchase price fits its competitive cost structure. This is called ____________. If the _________ is too low to generate interest from suppliers, it may be necessary for the buyer to consider applying a value analysis approach to the product in question.

Question

Quizplus · Accepted Answer

The term used for determining if the purchase price fits the buyer's competitive cost structure is "target pricing." This involves setting a price based on the company's cost structure, rather than simply paying the same price as competitors. If the target price is too low to generate interest from suppliers, the buyer may need to use value analysis to reevaluate the product and find ways to reduce costs. Option D correctly identifies the term "target pricing" and is therefore the best choice.

In the End, the Buying Firm Must Determine Whether the Purchase