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what are the risks involved in using auctions to source malic acid? briefly explain with evidence from the case.

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Bharathparasad577idn

The main risks associated with using auctions to source malic acid from Betapharm include quality risk, price risk, delivery risk, and contractual risk.

1. Quality Control: Betapharm's malic acid was of a lower quality than expected, leading to product recalls and customer complaints. This could lead to financial losses and/or damage to Betapharm's reputation.

2. Price Risk: As the auction process is unpredictable, Betapharm may end up paying more than expected or receive a lower quality of malic acid than expected. This could lead to financial losses and/or damage to Betapharm's reputation.

3. Delivery Risk: Betapharm may not receive the malic acid on time, leading to delays in production and financial losses.

4. Contractual Risk: Betapharm may not have a clear contract in place with the supplier, leading to disputes and potential financial losses.

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