In the supplier selection process, what will be the potential advantages of multiple sourcing?

In the supplier selection process, what will be the potential advantages of multiple sourcing?
A . Long relationship and short lead times
B . More supplier options and better product development
C . Lower price and reduced risk
D . Mutual trust and cooperation

View Answer

Answer: C

Explanation:

Multiple sourcing is an outsourcing approach in which products or services are contracted to various suppliers needed to conduct the business instead of using traditional single sourcing1. One of the potential advantages of multiple sourcing is that it can lower the price of the products or services, as it creates competition among the suppliers and gives the buyer more bargaining power2. Another potential advantage of multiple sourcing is that it can reduce the risk of supply disruptions, as it diversifies the supply chain and makes the buyer less dependent on any single supplier3. If one supplier fails to deliver due to unforeseen circumstances, such as natural disasters, political instability, or quality issues, the buyer can switch to another supplier or use a combination of suppliers to meet the demand4. Therefore, multiple sourcing can provide lower price and reduced risk as potential advantages in the supplier selection process.

Reference: 1: Multi-Sourcing: Everything You Need To Know – SupplierGATEWAY 3 2: Dual sourcing:

Advantages and disadvantages – Hermes Supply Chain Blog 4 3: The Case for Making Multiple

Suppliers Part of Your Supply Chain Strategy 5 4: Using Multi-Sourcing to Diversify the Supply Chain 6