1. Identify whether each of the following transactions involves spot exchange, contract, or vertical integration.
a. Barnacle, Inc., has a legal obligation to purchase 2 tons of structural steel per week to manufacture conveyor frames.
b. Exxon-Mobil uses the oil extracted from its wells to produce raw polypropylene, a type of plastic.
c. Boat Lifts R Us purchases generic AC motors from a local distributor.
d. Kaspar Construction - a home-building contractor - purchases 50 pounds of nails from the local Home Depot.
2. Recently, spun-off Pitney Bowes Office Services Inc. - the fax and copier division of Pitney Bowes Inc. - signed a five-year, $25 million contract for IT services from CGI Group, a Canadian information technology company. If you were the manager of the Pitney Bowes division, how would you justify the long-term nature of your contract with CGI Group?© BrainMass Inc. brainmass.com July 19, 2018, 11:48 am ad1c9bdddf
b. Vertical Integration
c. Spot Exchange
d. Spot Exchange
2. The way I would justify is by putting ...
The solution goes into a great amount of detail about the question being asked. The concepts are very well explained and easy to understand. The solution can be followed very easily by anyone who has some understanding of the concepts beforehand. Overall, an excellent response to the question.