CPIM Practice Exam

What term describes a situation where a product is available from only one supplier?

1. Single-source supplier

2. Sole-source supplier

3. Multisourcing

4. Purchase requisition

The correct answer is: Sole-source supplier

The term that best describes a situation where a product is available from only one supplier is a "sole-source supplier." This situation arises when a company has no alternative suppliers for a particular product or service, meaning that it must go to that single supplier for its needs. Sole sourcing often occurs due to unique product specifications, patents, or a lack of competition in the market. Because there is no alternative source, companies must rely heavily on the sole-source supplier, which can have implications for pricing, supply chain risk, and negotiating power. While “single-source supplier” is often used interchangeably with “sole-source supplier,” they can imply slightly different contexts in supply chain management. A single-source supplier suggests that a company has chosen to use one supplier among several available options, whereas sole-source implies that this is the only option available. Multisourcing refers to having multiple suppliers for a product or service, and a purchase requisition is a document used to request the purchase of goods or services and does not describe a supplier scenario.