An automobile company enters into a long-term contract with two suppliers for the same automobile tool. This is to ensure the company is protected in the event one of the suppliers adopts an uncooperative attitude. Which of the following concepts is illustrated in this scenario?
A) Outsourcing
B) Vertical integration
C) Horizontal integration
D) Parallel sourcing
E) Full integration

Question

Quizplus · Accepted Answer

Parallel sourcing is the concept illustrated in this scenario. It involves maintaining relationships with multiple suppliers for the same product or service to mitigate the risk of supply chain disruptions or uncooperative behavior from one supplier. This strategy also allows companies to compare prices, quality, and delivery times between suppliers and negotiate better deals.

An Automobile Company Enters into a Long-Term Contract with Two