Which of the following is NOT a difference between in-house and independent suppliers?
A) In-house suppliers have much less incentive to look for new ways to reduce operating costs or increase component quality.
B) Independent suppliers can pass on cost increases in the form of higher transfer prices.
C) Independent suppliers constantly need to increase their efficiency to protect their competitive advantage.
D) In-house suppliers do not face competition and the resulting rising cost structure that reduces a company's profitability.
E) When company-owned suppliers develop a higher cost structure than those of independent suppliers, vertical integration can be a major disadvantage.

Question

Quizplus · Accepted Answer

Independent suppliers cannot pass on cost increases in the form of higher transfer prices as easily as in-house suppliers because they operate in a competitive market and must maintain competitive pricing to retain business. This statement is not a difference between in-house and independent suppliers; rather, it's more applicable to in-house suppliers who may have more leeway to adjust prices due to the lack of external competition.

Which of the Following Is NOT a Difference Between In-House