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Which of the following statements regarding cost-savings sharing is false?

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

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Profit is a... View the full answer

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