Which type of purchase is best suited for single sourcing with a preferred supplier to reduce supply chain risk?
Correct Answer: A
Strategic purchases are best suited for single sourcing with a preferred supplier to reduce supply chain risk.
These purchases are critical to a company's operations and often involve complex and high-value items. By single sourcing with a preferred supplier, a company can establish a strong, collaborative relationship, ensuring quality, reliability, and continuity of supply, while also potentially benefiting from supplier innovation and cost efficiencies.
* Routine (B) purchases are low value and low risk, often sourced from multiple suppliers.
* Bottleneck (C) items have a high supply risk but are not necessarily strategic; they might require multiple sources or contingency planning.
* Leverage (D) items have significant purchasing power and are typically sourced from multiple suppliers to optimize costs.
References
* Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review.
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.