Long-term contracts are generally preferable to:
A) spot markets.
B) short-term contracts.
C) vertical integration.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Long-term contracts, spot markets, short-term contracts, and vertical integration are all mechanisms to manage supply chain risks and coordination, but their preferability depends on the specific context, such as the volatility of demand and supply, the specificity of assets, and the strategic goals of the firm. Therefore, it's not accurate to generally state that long-term contracts are preferable to the other options without considering the specific circumstances.

Long-Term Contracts Are Generally Preferable To