Jam Incorporated requires raw materials to be delivered from suppliers. One particular ingredient is a high supply risk and the strategy of the company is to hold inventory as a contingency. Which type of item is this?
This is a bottleneck item. According to the Kraljic Matrix, bottleneck items are characterized by high supply risk and low profit impact, which makes them difficult to source. Holding contingency stock is a recommended strategy for such items.
[Reference: CIPS L5M6 Study Guide, p.97, , ]
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