Certified Supply Chain Professional (CSCP) Practice Exam

What is the main consideration for the number of suppliers in a company’s strategy?

1. It determines the company's collaborative intensity

2. It helps ensure consistent supply availability

3. It dictates the complexity of the sourcing process

4. It impacts cost management efficiencies

The correct answer is: It determines the company's collaborative intensity

The main consideration for the number of suppliers in a company’s strategy largely relates to how it impacts cost management efficiencies. A larger number of suppliers can lead to a more competitive environment and potentially better pricing, as the company may negotiate more effectively by leveraging multiple sources of supply. This can lead to lower costs and improved financial performance. Moreover, having multiple suppliers can provide opportunities for collaboration and innovation, enabling companies to tap into various specializations and competencies that different suppliers may offer. This can enhance the overall value received from supplier relationships, as companies may partner strategically with suppliers who can contribute to specific product development or process improvements. While collaborative intensity might be influenced by the number of suppliers, the primary consideration is focused on how that number affects cost management and overall sourcing strategy. Additionally, having multiple suppliers can complicate the sourcing process and impact supply availability, but these are secondary effects compared to the central role of cost management efficiency in supplier strategy.