Question

The principle that decreasing the money spent on purchasing functions increases profit FASTER than increasing revenue as a result of marketing and sales is called the: A. Supply Importance Factor B. Supply Bonus Effect C. Profit Leverage Effect D. Profit Speed Effect E. Purchasing Importance Factor

Answer 1

Answer

Option C. Profit Leverage Effect

Explanation:

Purchasing activities are said to be assignments/tasks buyers have to perform if they want to have or obtain the right products and services at the right price and time from the right vendors.

Profit-Leverage Effect is usually measured by the increase in profit gotten as a result of a decrease in purchase spend

Answer 2

The correct option for the given question is "Profit Leverage Effect."

What is Profit Leverage Effect?

The profit-leverage effect illustrates the impact of purchasing cost savings in increasing the profit of the business. The principle of the profit-leverage effect states that a dollar saved in purchase increases the profit more than a dollar increase in sales.

Therefore the correct option is C.

Learn more about Profit Leverage Effect here:

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