Which of the following reasons supports dividing component purchases among numerous suppliers instead of utilizing a single supplier for multiple components?
Which of the following reasons supports dividing component purchases among numerous suppliers instead of utilizing a single supplier for multiple components?
Utilizing different suppliers tends to protect any one supplier from access to overall design intellectual property. This approach helps safeguard sensitive information and reduces the risk of any single supplier obtaining enough knowledge about the design to potentially replicate or misuse it. This can be especially critical in industries where intellectual property is a key competitive advantage.
Different suppliers tend to protect any one supplier from access to overall design intellectual property
A:A. Different suppliers enable averaging overall purchase pricing, allowing for more accurate product costing. By diversifying component purchases among multiple suppliers, a company can leverage competition in the market to negotiate better pricing for each component. This averaging of overall purchase pricing helps to mitigate the risk of price fluctuations from a single supplier and allows for more accurate product costing, which is essential for maintaining profitability and competitiveness in the market. Therefore, option A is the most relevant reason for dividing component purchases among numerous suppliers.