A company's supplier for a critical part was selected based on the lowest purchase price.Six months later,the company's warranty costs began to rise because of defective parts.The company has experienced:
A)Reduced sustainability.
B)Higher total costs of ownership.
C)Problems with availability of resources.
D)Higher levels of spend analysis.

Question

Quizplus · Accepted Answer

The company's decision to select a supplier based solely on the lowest purchase price may have initially saved them money, but the defective parts have resulted in higher warranty costs. This ultimately leads to a higher total cost of ownership in the long run.

A Company's Supplier for a Critical Part Was Selected Based