L4M4 Exam Dumps | Intra-company trading allows business units within a large enterprise to supply goods or services to

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Question 72

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Question 72/105

Intra-company trading allows business units within a large enterprise to supply goods or services to another.
What are the likely objectives of intra-company trading?
* Enhances production capacity utilisation
* Offsets some of the fixed costs of the supplying entity
* Compensates the supplying unit for the less effective technology applied
* Ensures internal technology always out-performs that of external suppliers

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. 2 and 4 only

Correct Answer: A

Intra-company trading aims to optimize internal resources by enhancing production capacity utilization and offsetting fixed costs. By supplying goods or services internally, organizations can achieve economies of scale and better allocate resources. However, compensating for less effective technology or ensuring superior internal technology over external suppliers are not primary objectives of intra-company trading.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 1.1.2: Make or buy decisions and the role of intra-company trading

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