Which of the following is true of the entry wedge of second sourcing?
A) It occurs when business firms leave a market.
B) It occurs because many big businesses have policies that provide for set-asides for purchases from small businesses.
C) It offers the advantage of being globally based.
D) It provides a competitive pressure to ensure that suppliers keep providing the best service and prices.

Question

Quizplus · Accepted Answer

The entry wedge of second sourcing refers to the practice of bringing in a new supplier to provide competition to an existing supplier. This creates pressure for suppliers to maintain the best service and prices to avoid losing business. Therefore, option D is the correct answer. Option A is incorrect because the exit wedge occurs when firms leave a market. Option B refers to set-asides for purchases from small businesses, which is not related to the concept of second sourcing. Option C is also unrelated, as the entry wedge of second sourcing does not specifically refer to global suppliers.

Which of the Following Is True of the Entry Wedge