When procurement manager Lao Zhou negotiates with suppliers, he always pushes prices to the limit and shifts all inventory and default risks onto the other party, winning every negotiation. A year later, suppliers quote him higher prices than they do for new customers, and their cooperation noticeably declines. Which adjustment below best avoids this backlash?

Answer: D

• AContinue squeezing prices, but hold an annual appreciation dinner for suppliers, using goodwill to make up for the price intransigence.✗ Wrong. This reflects the misconception that emotion can substitute for interest structure: the root of the other party's reduced commitment is the persistent imbalance in returns, not a lack of familiarity, and banquets do not change the incentive of taking more while giving less.
• BDevelop multiple backup suppliers at the same time, replacing anyone who refuses the low price at any time, using competition to keep quotes down.✗ Wrong. This reflects the misconception of using replaceability as a coercive tool: signaling no long-term commitment makes the other party less willing to invest in equipment or priority capacity, and the industry reputation is also damaged.
• CAssign an even tougher new manager to negotiate, set lower annual price reduction targets, and force suppliers to cut costs through internal optimization.✗ Wrong. This intensifies the same faulty logic: assuming harder pressure yields efficiency, but in reality it continues to shrink the other party's returns, hastening their wariness, price hikes, and exit.
• DRedesign the terms to share price volatility and inventory risks reasonably, giving the other party motivation to continue cooperating.✓ Correct. Long-term repeated cooperation requires both sides to have the incentive to continue: reasonable sharing of risks and benefits makes the other party willing to sustain investment, rather than becoming wary or terminating the relationship.