Certified Supply Chain Professional (CSCP) Practice Exam

What is a primary benefit for suppliers in a trading exchange?

1. Increased operational complexity

2. Higher transaction costs

3. Narrower market access

4. Lower transaction costs

The correct answer is: Lower transaction costs

A primary benefit for suppliers in a trading exchange is the reduction of transaction costs. Trading exchanges facilitate online transactions between buyers and suppliers, streamlining the purchasing process. This efficiency can greatly lower the costs associated with traditional procurement processes, such as paperwork, communication, or logistics. By providing a centralized platform where transactions can be conducted more smoothly, suppliers can benefit from reduced overhead expenses and faster order fulfillment. Additionally, lower transaction costs can enhance competitiveness, allowing suppliers to offer better pricing or expanded services to their customers, ultimately leading to increased sales and improved profit margins. In contrast, increased operational complexity, higher transaction costs, and narrower market access do not typically align with the advantages that trading exchanges aim to provide, as these would deter participation and hinder the efficiency that exchanges are designed to enhance.