Lecture 4 Flashcards
(7 cards)
1
Q
benefit of diversification =
A
The extra $3 (= $43 − $40) of expected profit when ordering from both suppliers (relative to the best profit when ordering from one supplier only)
2
Q
Expected profit =
A
expected revenue – order cost
3
Q
total per-unit cost =
A
payment to winner + transportation cost
4
Q
Role of Decentralization in Supply Risk Management:
A
- Supplier diversification benefits depend on correlation
- Supplier competition and diversification can work against each other
- Buyer’s power to design contracts and supplier competition affect supply chain efficiency
- Buyer competition determines supply chain structure
5
Q
Account Receivables = A/R. WHat does A/R stand for?
A
A= Accounts: Refers to the customers or entities that owe money to the business.
R = Receivable: Indicates that the business is expecting to “receive” payment in the future.
6
Q
High Credit rating leads to what?
A
low interest rate
7
Q
WorkingCapital(WC)=
A
CurrentAssets−CurrentLiabilities
