Certified Supply Chain Professional (CSCP) Practice Exam

What defines a single-source supplier?

1. A supplier that provides multiple products

2. A supplier receiving 100% of the business for a part

3. A supplier that offers the lowest prices

4. A temporary supplier for a project

The correct answer is: A supplier receiving 100% of the business for a part

A single-source supplier is defined as a supplier that receives 100% of the business for a specific product or part. This means that the organization has chosen to rely exclusively on this one supplier for that item, which can present both advantages and risks. The typical advantages include streamlined procurement processes, reduced administrative costs, and fostering a deeper relationship with the supplier that can lead to improved service levels and collaboration. On the flip side, relying on a single source can also introduce risks, such as supply chain disruptions if the supplier faces issues or fails to deliver. Therefore, organizations often conduct a thorough evaluation before committing to a single-source strategy for critical components. The other options do not accurately capture the essence of a single-source supplier. For instance, a supplier providing multiple products does not necessarily indicate that they are the sole provider for any of them. Similarly, the focus on the lowest prices does not correlate with the definition of a single-source supplier, as there could be multiple suppliers offering competitive pricing. Lastly, temporary suppliers for specific projects are not classified as single-source suppliers, since this arrangement is not permanent and does not reflect an exclusive supply relationship for ongoing needs.