Certified Supply Chain Professional (CSCP) Practice Exam

What does multisourcing involve?

1. Using one supplier for critical components

2. Procurement from multiple independent suppliers

3. Eliminating suppliers to cut costs

4. Negotiating with only domestic suppliers

The correct answer is: Procurement from multiple independent suppliers

Multisourcing involves procurement from multiple independent suppliers. This strategy allows organizations to mitigate risks associated with relying on a single supplier for critical components. By engaging multiple suppliers, companies can enhance reliability, ensure better pricing, and access diverse sources of innovation and quality. This approach fosters competition among suppliers, which can lead to improved service levels and performance. In contrast, using one supplier for critical components limits flexibility and increases vulnerability to supply disruptions. Eliminating suppliers to cut costs can compromise the quality and reliability of supply. Negotiating only with domestic suppliers can restrict the supply chain’s competitiveness and may limit access to potentially better pricing or quality from international sources. Therefore, the strategy of multisourcing provides a balanced approach, promoting resilience and efficiency in supply chain management.