Which of the following statements is true?
A) in contract buying, price and delivery are negotiated each time an order is released.
B) contract buying assures suppliers they have a given amount of business and commits them to allocating that amount of their capacity to the customer
C) contract buying is useful for short term purchases
D) EDI does not eliminate much of the paper work associated with buying

Question

Quizplus · Accepted Answer

Contract buying involves an agreement between a buyer and a supplier to commit to a certain amount of business over a defined period of time. This assures suppliers that they have a given amount of business and commits them to allocating that amount of their capacity to the customer. Option A is incorrect because the negotiation of price and delivery terms is only done once in contract buying, not each time an order is released. Option C is incorrect because contract buying is useful for long-term purchases because it allows buyers to lock in prices and secure supplies for an extended period. Option D is incorrect because EDI (Electronic Data Interchange) is a technology that allows for the exchange of business documents electronically between buyers and suppliers, thereby reducing paperwork.

Which of the Following Statements Is True