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A company finds that one of its warehouses is out of capacity to store products. Expanding the physical size of the warehouse is not an option. The most appropriate solution would be to increase the:
The purpose of price differentiation is to:
In a make-or-buy decision, if the product is modular and the company is dependent on knowledge and capacity, outsourcing most likely will be:
A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%. The company averages four inventory turns. The cost savings resulting from increasing inventory turns from four to six would be:
Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:
The practice of supply chain members acting in close collaboration while retaining independent ownership is known as:
A company considers moving a portion of its production to a distant country to support a major customer. Which of the following actions is most effective in mitigating the risk of financial loss in the event of a global economic downturn?
Which of the following types of risk typically would be most difficult to plan for and mitigate?
For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?
Which of the following elements typically is considered to be an output of demand planning?

Question 541 - CSCP discussion

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Overall supply chain risk may be increased by implementing which of the following strategies?

A.
Single sourcing a product that makes the highest annual profit
Answers
A.
Single sourcing a product that makes the highest annual profit
B.
Outsourcing products that are not well suited to a company's operations
Answers
B.
Outsourcing products that are not well suited to a company's operations
C.
Identifying multiple sources for a product with the potential for supply chain disruption
Answers
C.
Identifying multiple sources for a product with the potential for supply chain disruption
D.
Internally manufacturing products with high levels of technical intellectual property
Answers
D.
Internally manufacturing products with high levels of technical intellectual property
Suggested answer: A

Explanation:

Single sourcing a high-profit product increases overall supply chain risk due to several reasons:

Supplier Dependency: Relying on a single supplier for a critical product creates a high dependency, making the supply chain vulnerable to disruptions if that supplier faces issues (e.g., natural disasters, financial instability).

Lack of Alternatives: Without alternative sources, any disruption can lead to significant delays, shortages, and potential loss of revenue.

Negotiation Leverage: Single sourcing can reduce the buyer's negotiation leverage, potentially leading to higher costs or unfavorable terms.

Outsourcing unsuitable products, identifying multiple sources for risk-prone products, and internally manufacturing IP-sensitive products are strategies to mitigate risk, not increase it.

Chopra, Sunil, and Peter Meindl. 'Supply Chain Management: Strategy, Planning, and Operation.' Pearson.

Harland, Christine, Richard Brenchley, and Helen Walker. 'Risk in Supply Networks.' Journal of Purchasing and Supply Management.

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asked 16/09/2024
nosh shah
43 questions
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