Asked by Kameron Teague on Apr 26, 2024
Verified
Acacia Inc., an Australian textile company, imports cotton from Lebristar, a country in Southeast Asia. It can be said that:
A) Acacia should use just-in-time (JIT) manufacturing to carry excess inventory.
B) Acacia is likely to evade import duties.
C) Acacia is likely to save costs and become more competitive.
D) Acacia should follow a rigid cost-plus pricing strategy.
Just-In-Time
An inventory management strategy that increases efficiency and decreases waste by receiving goods only as they are needed in the production process, reducing inventory costs.
Import Duties
Taxes imposed by a government on goods imported from other countries, meant to protect domestic industries and generate revenue.
- Recognize how global procurement and sourcing decisions affect a company's operational costs and competitiveness.
Verified Answer
EM
Ethan MenserApr 30, 2024
Final Answer :
C
Explanation :
Importing cotton from a country like Lebristar, which might offer lower prices due to cheaper labor or raw material costs, can lead to cost savings for Acacia Inc. This, in turn, can enhance its competitiveness in the market by allowing it to offer products at more attractive prices or enjoy higher margins.
Learning Objectives
- Recognize how global procurement and sourcing decisions affect a company's operational costs and competitiveness.