A strict credit policy by the supplier necessitates the firm to maintain ......................... working capital to make purchases.

More

The correct answer is option 1- More.

A strict credit policy by the supplier necessitates the firm to maintain more working capital to make purchases.

Strict credit policy means the supplier offers shorter payment terms or requires advance payment for orders. This means the firm needs to have more cash on hand to make timely payments, even before they receive payment from their customers. This additional cash requirement translates to higher working capital, which is the difference between current assets and current liabilities. Therefore, the correct answer is more.