Overall supply chain risk may be increased by implementing the strategy of single sourcing a product that makes the highest annual profit. Single sourcing involves purchasing a product from only one supplier. While this can lead to cost savings and improve supplier relationships, it also increases the risk of supply chain disruption, such as supplier bankruptcy or production disruptions. In this case, if the single sourced product experiences a disruption, it could have a significant impact on the company's profitability. On the other hand, Options B (outsourcing products that are not well suited to a company's operations), C (identifying multiple sources for a product with the potential for supply chain disruption), and D (internally manufacturing products with high levels of technical intellectual property) can help mitigate supply chain risk by diversifying suppliers, reducing dependence on external partners, and protecting proprietary knowledge.
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