Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is a benefit for buyers in a trading exchange?

1. Higher administrative costs

2. Increased logistics costs

3. Lower unit costs

4. Reduced control over agreements

The correct answer is: Lower unit costs

The benefit for buyers in a trading exchange is primarily reflected in the ability to achieve lower unit costs. Trading exchanges enhance market efficiency by providing a platform where multiple sellers can compete for buyers' business. This competition typically leads to price reductions, as sellers strive to offer attractive prices to win contracts and sales. Additionally, in a trading exchange, buyers can access a broader range of suppliers and products, allowing them to negotiate better deals and find lower prices than they might in a traditional procurement scenario. This opportunity for increased competition helps buyers minimize their purchasing expenses, which is a significant advantage in a cost-sensitive environment. In contrast, other options mention adverse effects such as higher administrative costs, increased logistics costs, and reduced control over agreements, which are generally not considered benefits for buyers engaged in trading exchanges. Buyers typically seek to optimize their costs and maintain clear control over their transactions, making those other options less desirable in the context of trading exchanges.