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Question 436 - CSCP discussion

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In which of the following forms of electronic commerce do suppliers attempt to offer the lowest price to buyers?

A.
Dutch auction
Answers
A.
Dutch auction
B.
Reverse auction
Answers
B.
Reverse auction
C.
Business-to-business commerce (B2B)
Answers
C.
Business-to-business commerce (B2B)
D.
Business-to-consumer sales (B2C)
Answers
D.
Business-to-consumer sales (B2C)
Suggested answer: B

Explanation:

Definition of Reverse Auction: In a reverse auction, buyers post their requirements, and suppliers compete to offer the lowest price to secure the contract. This is the opposite of traditional auctions where buyers bid for goods or services.

Mechanism: Suppliers submit lower bids to undercut their competitors, aiming to offer the most competitive price.

Comparison with Other Options:

Dutch Auction (A): In a Dutch auction, the price starts high and is lowered until a buyer accepts the price, used in specific scenarios but not primarily for lowest price competition.

Business-to-Business Commerce (B2B) (C): B2B encompasses a broad range of transactions between businesses but doesn't specifically focus on lowest price competition.

Business-to-Consumer Sales (B2C) (D): B2C involves selling products directly to consumers and does not primarily focus on suppliers offering the lowest price.

Conclusion: The reverse auction is the form of electronic commerce where suppliers aim to offer the lowest price to buyers.

'Supply Chain Management: Strategy, Planning, and Operation' by Sunil Chopra and Peter Meindl.

APICS Dictionary, 16th Edition.

asked 16/09/2024
Amy Sukkar
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