Acme Electronics Ltd, a manufacturing firm, has signed a contract with Global Metals Inc for the supply of raw materials. The contract includes performance incentives tied to timely delivery and quality standards. However, Acme Electronics Ltd has limited resources to administer performance-incentive agreements. Which one of the following actions best aligns with the principle of offering incentives to critical suppliers?

Question

Acme Electronics Ltd, a manufacturing firm, has signed a contract with Global Metals Inc for the supply of raw materials. The contract includes performance incentives tied to timely delivery and quality standards. However, Acme Electronics Ltd has limited resources to administer performance-incentive agreements. Which one of the following actions best aligns with the principle of offering incentives to critical suppliers?

Answer

Offering performance incentives to all Acme
Electronics Ltd's suppliers, irrespective if criticality, to encourage improved
performance across the board and ease administration

Answer

Assessing the criticality of each supplier
to Acme Electronics Ltd's success and offering performance incentives
selectively to those deemed critical

Answer

Implementing performance incentives only
for critical suppliers who request them and may contribute to Acme Electronics Ltd's
success to streamline administrative processes

Answer

Removing performance incentives from Acme Electronics
Ltd's contracts altogether to simplify management and reduce administrative
burden

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Acme Electronics Ltd, a manufacturing firm, has signed a contract with Global Me...

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