CPIM Practice Exam

What defines a single-source supplier?

1. Having multiple suppliers for a part

2. Being chosen for exclusive supply of a part despite alternatives

3. Being the market leader for a specific product

4. Having the best quality assurance ratings

The correct answer is: Being chosen for exclusive supply of a part despite alternatives

A single-source supplier is characterized by the exclusive arrangement where one supplier is chosen to provide a specific part or component, even when there are alternative suppliers available. This decision may be influenced by several factors, such as the supplier's competitive advantages, reliability, or unique capabilities that make it the preferred choice for that particular item. Choosing a single-source supplier can streamline processes and foster a closer relationship between the supplier and the buyer, potentially leading to better communication and understanding of each other's needs. Additionally, it can simplify procurement management and reduce complexities associated with managing multiple suppliers, such as varying quality standards or delivery times. The other options relate to other concepts in supplier management but do not accurately describe the nature of a single-source supplier. Having multiple suppliers for a part would directly contradict the definition of a single-source supplier. Being a market leader for a specific product could pertain to competitive positioning but does not necessarily mean they are the only supplier for a part. Best quality assurance ratings are important for supplier evaluation but don't define the exclusivity aspect of a single-source relationship.