Question

1

When compared with multiple sourcing, single sourcing has the advantage of:

		better supplier relationships
		promoting competition
		greater capacity
		reduced supply risk

2

In which of the following situations would a simulation model likely be an ideal tool to use?

		When there is insufficient data to optimize mathematically
		When a process is easily observable in the real world
		When a problem has a simple mathematical solution
		When a realistic solution is less important that an optimal solution

Answer 1

1. When compared with multiple sourcing, single sourcing has the advantage of:

better supplier relationships - As you commit your entire supply from 1 vendor, you enjoy the benefits of your vendor sharing his best technology, know how with you.

promoting competition - Competition is promoted in multiple sourcing, where in all vendors will compete to get bigger share of your order by giving discounts, better quality products, etc.

greater capacity - Greater capacity is available in multiple sourcing.

reduced supply risk - Multiple sourcing reduces supply risk as we have multiple vendors and there will always be a backup if one fails to deliver his commitment.

2. In which of the following situations would a simulation model likely be an ideal tool to use?

When there is insufficient data to optimize mathematically - Simulation also won't work as we don't have enough data

When a process is easily observable in the real world - Simulation of an observable process will give multiple data points and actual world scenarios where the process fails/ falters.

When a problem has a simple mathematical solution - No need of simulation

When a realistic solution is less important that an optimal solution - Irrelevant in this context