Question

Which of the following statements supports multiple sourcing:

- an ongoing long-term contract exists with a preferred supplier.
- supply is plentiful and supply assurance is important.
- there is a patent involved.
- the order is small.
- concerns exist about supplier capacity for future volume.

Answer 1

Concerns exist about supplier capacity for future volume.

Step-by-step explanation:

The multisourcing is a method in which the supplier base is expanded increasing the actual number of suppliers, because the needs of the company are increasing.

Advantages:

-Alternative sources of materials in case of delivery stoppage by a supplier.

-Reduced probability of bottlenecks due to insufficient production capacity to meet peak demand.

- Increased competition mong suppliers leads to better quality, price, delivery, product innovation and buyer´s negociation power.

-More flexibility to reat to unexpected events that could endanger supplier´s capacity.

Disadvantages:

-Reduced efforts by supplier to match buyer´s requirements.

-Higher cost for the purchasing organization (greater number of orders, telephone calls, records, and so on).