Question

The optimal method of procuring inputs depend on a number of factors. Match each of the following situations with the most appropriate method of procuring inputs (use each method once).

You manage a sandwich shop in Toronto. One of your most popular sandwiches is made with a type of onion grown only by one farmer from Guelph, Ontario. The most appropriate procurement method for these onions is:	Answer 1Choose...Contract , Spot exchange, Vertical Integration
You manage a sandwich shop in Toronto. One night, you visit a friend of yours for dinner. While this friend is not a professional cook, they make a one-of-a-kind sauce that you would like to use for a new sandwich you hope will help you stand apart from your competition. The most appropriate procurement method for this sauce is:	Answer 2Choose...Contract, Spot exchange, Vertical Integration
You manage a sandwich shop in Toronto. Tomatoes are a popular topping for your sandwiches. As a result, you purchase large amounts of tomatoes. Generally, you need to resupply on tomatoes every three to seven days. The most appropriate procurement method for these tomatoes is:	Choose : Contract, Vertical integration, spot exchange

Answer 1

Ist Case:
Contract. Why? It's because only a contract with farmer can legally deter him from selling the onions to someone else and leaving our sandwich shop in trouble. By virtue of contract terms, the farmer will be bound to sell his output only to us.

IInd Case:
Vertical Integration. Why? It's because it's about outshining the competition by way of acquiring a unique or special input for the betterment of your own product or product mix.

IIIrd Case:
Spot Exchange. Why? Because we need tomatoes in large quantity once in every three to seven days. Tomatoes are general products and their prices keep fluctuating in the market. It's always best to go and buy fresh every time at the prevailing prices.