A car assembly company ASSEMCO is legally obligated by a contract to buy 25 engines from ENGCO at the end of two years at a price of $5000 per engine. Accordingly, ASSEMCO started assembling cars that t ENGCO engines. In the second year, due to some events in the car manufacturing industry, ENGCO decides to increase the price of their engines, or otherwise it will go bankrupt.

What should the manager of ASSEMCO do in this case? How could this problem have been avoided?

Did the manager choose the wrong method of procuring inputs?