Asked by Jessica Johnson on Jul 03, 2024
Verified
Which of the following is TRUE?
A) Purchase a supplier as long as the supplier is profitable
B) Purchasing a profitable customer would lead to an increase in profits
C) Purchasing a profitable supplier may not necessarily increase your profits
D) Purchasing a profitable supplier is a bad idea and would lead to decreased profits
Profitable Supplier
A supplier whose operations result in financial gain, ensuring a beneficial relationship for businesses that procure their goods or services.
Profits
Financial gains obtained when revenues exceed expenses in a business or transaction.
- Investigate the strategic rationale behind the acquisition of suppliers or customers to improve profitability.
Verified Answer
LB
Lashanda BarnesJul 07, 2024
Final Answer :
C
Explanation :
While a profitable supplier may be valuable to a company, purchasing them may not necessarily lead to an increase in profits. There may be other factors at play such as integration costs, potential loss of other suppliers, etc. Therefore, it is important to carefully evaluate the potential benefits and drawbacks before making a decision to purchase a supplier. Option A, B, and D are incorrect as they contain either incomplete or incorrect information.
Learning Objectives
- Investigate the strategic rationale behind the acquisition of suppliers or customers to improve profitability.