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APICS CSCP Exam - Topic 5 Question 104 Discussion
Topic #: 5
A distribution requirements planning (DRP) system it implemented to primary to monitor or manage:
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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