What is this tactic known as?

Fashion buyer Kamal Sumai is working closely with a key overseas supplier and is monitoring and forecasting cost volatility within the fabric market. Kamal has decided it is the right time to raise a purchase order with his supplier for a greater quantity of fabric than he currently needs. Kamal is attempting to avoid an imminent price increase.

What is this tactic known as?
A . Spot buying
B . Forward buying
C . Derivative buying
D . Hedging buying

View Answer

Answer: B

Explanation:

Forward buying involves purchasing in advance to lock in current prices and avoid future increases.

This strategy is effective in volatile markets where price hikes are anticipated.