To reduce dependency on a single source and mitigate supply disruption risk, which practice is most appropriate?

• A. Diversifying suppliers to reduce dependency on a single source
• B. Centralizing procurement to one source
• C. Increasing reliance on a single vendor
• D. Keeping stock at minimal levels without considering suppliers

Answer: (D)

Diversifying suppliers to reduce dependence on a single source is the best way to mitigate supply disruption risk. When you spread orders across multiple vendors, a problem at one supplier—such as a shutdown, delay, or quality issue—won’t halt your entire operation. You maintain continuity by shifting demand to alternate sources, preserving service levels and reducing the chance of stockouts. This approach also tends to encourage better pricing and service terms as suppliers compete for business.

The other approaches don’t reduce disruption risk. Centralizing procurement creates a single point of failure: if that one source faces trouble, the whole supply chain can grind to a halt. Relying on a single vendor heightens exposure to that vendor’s problems. Keeping stock at minimal levels without considering suppliers can save short-term costs but leaves you vulnerable to any delay or shortage from your supplier network, defeating resilience goals.