4 List and discuss the three 3 methods of Procuring Inputs c

4. List and discuss the three (3) methods of Procuring Inputs, chapter page Firod Case

Solution

The methods of procuring inputs are

1. Spot Exchange: a type of informal relationship between a buyer and seller in which adherence to the terms of exchange is non obligatory to either party. In this the involved parties are unknown and there exists no legal relationship between the buyer and seller.

2. Contracts: in this there exists a formal and legal relationship between the buyer and seller which makes it obligatory for each party to conduct transactions at the specified and agreed terms. The deal between the two party ensures that the each party upholds their end of the bargain.

3. Vertical Integration: in this case the firm produces not only the final product but also at least one of the inputs needed for the production of the product. This is usually done by firms to reduce dependence on their supplier firms for the inputs.

Please give a thumbs up to my answer.