CPIM Practice Exam

What is multisourcing in procurement?

1. Solo supplier acquisition

2. Procurement from multiple independent suppliers

3. Single-supplier procurement strategy

4. Bulk buying from a primary vendor

The correct answer is: Procurement from multiple independent suppliers

Multisourcing in procurement refers to the strategy of sourcing materials, components, or products from multiple independent suppliers rather than relying on a single supplier. This approach allows organizations to mitigate risks associated with supply chain disruptions, such as those caused by natural disasters, political instability, or supplier insolvency. By diversifying their supplier base, companies can ensure a steady supply of goods, enhance competition among suppliers for better pricing and quality, and leverage the strengths of different suppliers to fulfill specific needs. Furthermore, multisourcing can improve negotiation power and enable organizations to respond more flexibly to changes in demand. Overall, this strategy can lead to increased innovation, higher quality products, and more resilient supply chains.