CPIM Practice Exam

What is the primary characteristic of a sole-source supplier?

1. They are the only supplier capable of meeting technical requirements

2. They provide the best price for goods

3. They have a long-term contract with the buyer

4. They are located within the same region as the buyer

The correct answer is: They are the only supplier capable of meeting technical requirements

The primary characteristic of a sole-source supplier is that they are the only supplier capable of meeting the specific technical requirements needed by the buyer. This situation often arises in scenarios where specialized products or services are required that few, if any, other suppliers can provide. The uniqueness of the supplier's offerings is what defines them as the sole source, making it impossible for the buyer to source the necessary goods from alternative suppliers. While factors like pricing, contractual agreements, and geographical location may play essential roles in procurement decisions, they do not define a sole-source supplier. The defining feature is indeed the exclusive ability to fulfill specific technical needs that no other supplier can meet.