Which of the following statements about reverse auctions is MOST accurate?
A) Reverse auctions are an effective procurement process for critical production materials.
B) Large manufacturers do not engage in reverse auctions.
C) In a reverse auction,potential suppliers bid against each other.
D) There are no risks associated with reverse auctions.

Question

Quizplus · Accepted Answer

In a reverse auction, potential suppliers bid against each other to win the business from the buyer. This competition can lead to lower prices and better value for the buyer. However, there are risks involved with reverse auctions, such as sacrificing quality for a lower price or creating an adversarial relationship with suppliers. Therefore, it is important for buyers to carefully evaluate the potential benefits and risks before engaging in a reverse auction. Option A is partly true, as reverse auctions can be effective for procurement, but it is not limited to critical production materials. Option B is incorrect, as many large manufacturers use reverse auctions. Option D is false, as with any procurement process, there are always risks involved.

Which of the Following Statements About Reverse Auctions Is MOST