Certified Supply Chain Professional (CSCP) Practice Exam

What is a common reason for minimizing the number of supply chain partners?

1. Increased production capacity

2. Reduction in maintenance costs

3. Improvement in product variety

4. Enhancement of communication channels

The correct answer is: Reduction in maintenance costs

Minimizing the number of supply chain partners often leads to a reduction in maintenance costs. When a company consolidates its partnerships, it typically means streamlining processes and reducing the complexity of managing multiple relationships. Fewer partners can mean simplified agreements, lower administrative overhead, and reduced transactional costs associated with managing many suppliers. Additionally, a smaller set of partners can often lead to more focused maintenance efforts, as the company can allocate resources more efficiently. It creates opportunities for stronger relationships, where partners are more engaged and responsive, leading to better service, lower costs, and potentially fewer disruptions in the supply chain, all contributing to reduced maintenance costs. While the other options present benefits that can arise from managing supply chain partners effectively, they do not directly connect to the primary reason for minimizing the number of partners as strongly as the reduction in maintenance costs does. For example, increased production capacity usually requires more partnerships, improvement in product variety can come from leveraging diverse suppliers, and enhancement of communication channels can often involve more complex networks rather than fewer.