Generally, how does the size and sophistication of a firm relate to its use of supply chain intermediaries?

The rationale behind the correct choice highlights the strategic considerations that larger and more sophisticated firms typically exhibit in their supply chain management. Larger firms often have more resources, capabilities, and access to technology that allow them to manage their own supply chains more effectively. This increased capacity enables them to establish direct relationships with suppliers and manage logistics internally, leading to improved efficiencies and cost savings.

Sophisticated firms may also have better data analytics and decision-making frameworks that allow them to optimize their supply chain operations. Therefore, rather than relying on intermediaries to handle various aspects of the supply chain, they can take on these roles themselves, which can lead to more streamlined operations and greater control over processes.

In contrast, smaller firms or those with fewer resources might find it beneficial to rely on intermediaries because they can leverage the existing networks and expertise of these intermediaries without needing to invest significantly in building and managing their own supply chain functions. Hence, the size and sophistication of a firm significantly influence its likelihood of utilizing supply chain intermediaries, explaining why the option stating that larger and more sophisticated firms are less likely to use intermediaries is correct.