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A buyer is reviewing the difference between the direct and indirect costs of a supplier's...

CIPS L4M2 Full Course Access
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A buyer is reviewing the difference between the direct and indirect costs of a supplier's production costs The buyer is unable to reduce the supplier's indirect cost for production. Is this statement true?

A.

No, because overheads always decrease with inflation

B.

No, because a change in the buyer's specification could enable different machinery with a higher utilisation rate to be used

C.

Yes, because the cost of utilities will always increase.

D.

Yes, because the machinery and staff costs don't change over time

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