Which of the following statements regarding cost-savings sharing is false?
The cost-based approach provides a supplier with incentives to pursue continuous performance improvement to realize shared cost savings and invest in productive assets
Profit is a direct function of cost
Profit is a function of the productive investment committed to the purchased item and a supplier's asset return requirements
Cost-savings sharing approaches require joint identification of the full cost to produce an item.
In the traditional market-based pricing approach, one party (i.e., usually the buyer) seeks to capture all cost savings resulting from a supplier's improvement effort
Profit is a... View the full answer