Sourcing Strategies in Procurement

What is the primary goal of sourcing in procurement?

• Increasing product prices

• Selecting suppliers and managing contracts

• Eliminating competition

• Reducing supplier relationships

Which sourcing strategy involves forming long-term relationships with a small number of suppliers?

• Many suppliers

• Few suppliers

• Joint ventures

• Virtual companies

Which of the following is NOT a sourcing strategy?

• Vertical integration

• Joint ventures

• Price-fixing agreements

• Keiretsu networks

What is an advantage of vertical integration?

• Higher supplier switching costs

• Increased risk in stable industries

• Better quality control

• Decreased operational efficiency

Which sourcing strategy relies on flexible supplier relationships and low capital investment?

• Keiretsu networks

• Few suppliers

• Many suppliers

• Virtual companies

Strategic sourcing must align with corporate strategy.

• True

• False

Joint ventures involve full company mergers where both companies lose their independence.

• True

• False

In the many suppliers strategy, suppliers compete based on price, and switching suppliers is easy.

• True

• False

Keiretsu networks create short-term supplier relationships with minimal financial involvement.

• True

• False

A key benefit of sourcing is cost competitiveness, operational efficiency, and supplier performance management.

• True

• False