Question

From the buying division’s perspective, when a transferred item can be purchased from an outside supplier, the price charged by the outside supplier represents an upper bound on the charge that should be made on transfers between the selling and buying divisions.

True or False?

Quality of conformance refers to the extent to which a product offered by one company is similar to products offered by other companies.

True or False?

Answer 1

Solution: -

1. From the buying division’s perspective, when a transferred item can be purchased from an outside supplier, the price charged by the outside supplier represents an upper bound on the charge that should be made on transfers between the selling and buying divisions: -

True

Explanation: -

Transfer occur when Minimum price of the selling division < Maximum price of the buying division.

2. Quality of conformance refers to the extent to which a product offered by one company is similar to products offered by other companies: -

False

Explanation: -

The product quality dimension. This is the extent to which the products and service provided meet the needs of specific customers.

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