Question
Kelly catering company was recently faced with a make or buy decision for cakes the company sells to its customers. Kelly was quoted a purchase
Kelly catering company was recently faced with a make or buy decision for cakes the company sells to its customers. Kelly was quoted a purchase price that was significantly below its avoidable cost to make the cakes. However, there was strong evidence that the potential supplier was low-balling the price. Even so, Kelly's management team decided to outsource the cakes. Which of the following is the most likely explanation for this decision? a. the practice of low-balling is illegal b. Employees were offered bonus based on current period performance c. the company had excess capacity
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