When a firm purchases a part of its supplies from any one of a large number of potential suppliers at the current market price without long-term commitments,it is:
A)making a spot market purchase.
B)practicing arbitrage.
C)integrating upstream.
D)integrating downstream.

Question

Quizplus · Accepted Answer

Making a spot market purchase refers to purchasing supplies at the current market price from any available supplier without any long-term commitments. This strategy allows the firm to take advantage of favorable market conditions and avoid the risks of long-term commitments. Arbitrage refers to buying and selling the same asset in different markets to take advantage of price differences. Integrating upstream or downstream involves acquiring or merging with suppliers or customers to gain control over the supply chain. Therefore, the best choice for the given scenario is A) making a spot market purchase.

When a Firm Purchases a Part of Its Supplies from Any