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Question 364 - CSCP discussion

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When of the following outcomes is achieved through the reduction in the number of a firm's supplier?

A.
Supplier operational integration
Answers
A.
Supplier operational integration
B.
Supply localization
Answers
B.
Supply localization
C.
Volume consolidation
Answers
C.
Volume consolidation
D.
Value management
Answers
D.
Value management
Suggested answer: C

Explanation:

Reducing the number of a firm's suppliers achieves volume consolidation by:

Economies of Scale: Concentrating purchases with fewer suppliers allows for bulk buying, which can reduce costs and improve negotiating power.

Stronger Relationships: Fewer suppliers lead to stronger, more strategic partnerships, fostering better communication and collaboration.

Consistency and Quality: Working with a limited number of suppliers can improve the consistency and quality of materials or products received.

Simplified Management: Fewer supplier relationships simplify supply chain management and reduce the administrative burden associated with managing multiple suppliers.

Monczka, R., Handfield, R., Giunipero, L., & Patterson, J. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Burt, D. N., Petcavage, S., & Pinkerton, R. (2010). Supply Management. McGraw-Hill.

asked 16/09/2024
Darpan Sodhi
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