Question
Asked Nov 19, 2019
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Single and Multiple Suppliers. Discuss circumstances when either/both are needed and provide an example of each. 

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Expert Answer

Step 1

Single supplier:

Single supplier refers that many suppliers will be available in the market for that material. However, the firm uses only one supplier.

  • The advantage of single sourcing is the opportunity for negotiation. The firm can be able to choose the supplier by evaluating factors.
  • The disadvantage of single sourcing is the administrative cost due to negotiation.
  • There is a risk that the operation would be stopped if the supplier shuts down for some reason. Switching from one supplier to other supplier requires time and it would impact the business operation.
Step 2

Multiple supplier:

Multiple supplier refers that the firm uses various suppliers for the material.

  • The advantage of multiple sourcing is that the firm can be able to get the materials at the best price due to more competition.
  • The disadvantage of multiple sourcing is that there is a chance for confusion while allocation the operation and the administrative cost would be...

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