Supply Market Research and Sourcing Strategy

Introduction

Purchasing decisions cannot be made effectively by examining price alone. A professional buyer must understand what the organisation spends, how demand is changing, which suppliers are capable of meeting requirements, how competitive the market is, and what risks may interrupt supply. Supply market research converts external and internal information into purchasing decisions. Sourcing strategy then determines how the organisation should obtain the required goods or services and how supplier relationships should be managed.

This chapter presents a practical framework for analysing expenditure and supply markets, classifying purchases through the Kraljic portfolio model, evaluating competition and supply conditions, and selecting appropriate single, multiple, local, global or partnership sourcing strategies.

Learning Objectives

By the end of this chapter, the learner should be able to:

1. Explain the purpose and process of supply market research.
2. Conduct basic spend analysis using reliable purchasing data.
3. Classify purchases using the Kraljic portfolio matrix.
4. Assess competition, supplier capacity, market structure and supply risk.
5. Compare single, multiple, local, global and partnership sourcing.
6. Recommend a sourcing strategy using commercial, operational, ethical and risk criteria.

1. The Role of Supply Market Research

Supply market research is the systematic collection, validation and interpretation of information about suppliers, technologies, costs, capacity, competition, regulations and market trends. It supports decisions before a formal request for quotation, tender or negotiation is issued.

A purchasing department normally investigates two related environments:

• The internal demand environment: what the organisation buys, from whom, in what quantities, at what prices and under what terms.
• The external supply environment: who can supply the requirement, under what conditions, with what capability and at what level of risk.

Market research is not the same as casually searching the internet. It should define the information required, identify credible sources, compare evidence and record assumptions. Useful sources include supplier websites and catalogues, trade associations, industry reports, government statistics, customs data, regulatory publications, tender databases, financial statements, technical standards, supplier interviews and visits.

1.1 A research process

A disciplined process may contain the following stages:

1. Define the decision: for example, whether to renew a contract, consolidate suppliers or enter an overseas market.
2. Specify the requirement: identify performance, quality, quantity, delivery, service and sustainability requirements.
3. Collect internal data: extract purchase orders, invoices, contracts, inventory records and supplier-performance data.
4. Segment the requirement: group purchases by category, specification, use, supplier and risk.
5. Research the supply market: identify suppliers, market structure, capacity, technology, price drivers and constraints.
6. Validate information: compare sources and distinguish facts from estimates or supplier claims.
7. Analyse alternatives: assess sourcing options against cost, risk, quality, flexibility and strategic objectives.
8. Document the recommendation: state evidence, assumptions, risks, mitigation actions and review dates.

The quality of a sourcing decision depends heavily on the quality of the requirement definition. An ambiguous specification may produce apparently competitive quotations that are not genuinely comparable.

2. Spend Analysis

Spend analysis is the examination of organisational expenditure to identify what is purchased, how much is spent, with which suppliers, under which contracts and with what patterns over time. It is the foundation of category management and sourcing prioritisation.

2.1 The spend cube

Spend is commonly analysed across three dimensions:

Time is also important. Monthly or annual trends can reveal seasonality, price escalation, demand growth and the effect of contracts.

2.2 Data preparation

Raw purchasing data often contains duplicate supplier names, inconsistent item descriptions, missing contract references and different units of measure. Before analysis, the buyer should:

• remove duplicate transactions;
• standardise supplier names and product codes;
• distinguish goods, services, freight, taxes and rebates;
• convert quantities to consistent units;
• verify whether prices are per unit, pack, kilogram, hour or contract;
• reconcile purchasing records with the general ledger;
• identify purchases made outside approved contracts.

Poor data can lead to false conclusions. For example, one supplier may appear as three suppliers because of spelling differences, while one category may appear fragmented because users employ different descriptions.

2.3 Basic spend measures

Total expenditure for a category is calculated as:

where S is total spend, qᵢ is the quantity purchased in transaction or item line i, and pᵢ is the corresponding unit price. Quantities and prices must use compatible units, and the calculation should specify whether taxes, freight and discounts are included.

Supplier share of category spend is:

where Sⱼ is spend with supplier j and S is total category spend. This measure identifies supplier dependence but does not by itself establish whether dependence is dangerous; a high share may be acceptable where the market is highly concentrated and the supplier is reliable.

A simple price variance is:

The reference price may be a contract price, budget price, previous price or market benchmark. The measure is meaningful only when specifications, delivery terms, currency and quality are comparable.

2.4 The Pareto principle

A Pareto analysis ranks categories or suppliers from highest to lowest spend and calculates cumulative expenditure. It may reveal that a small number of categories account for a large share of spend. The familiar “80/20 rule” is a heuristic, not a universal law. It should not be assumed that exactly 20 per cent of items always produce exactly 80 per cent of expenditure.

High-spend categories deserve attention, but low-spend items can also create substantial operational risk. A low-value spare part that stops production may be more strategically important than a high-value office-supply category.

2.5 Total cost of ownership

Purchase price is only one component of cost. Total cost of ownership (TCO) may include acquisition, transport, inspection, installation, operating energy, maintenance, inventory, disposal and failure costs.

where P is purchase price, F freight and duties, I inspection and installation, O operating cost, M maintenance cost, D disposal cost, R expected risk or failure cost, and V residual or recovery value. All amounts must be measured over the same time period and in the same currency. If costs occur at different times, discounted cash-flow methods may be more appropriate.

For example, Supplier A offers equipment for $48,000 with freight of $2,000, installation of $4,000 and expected three-year operating and maintenance costs of $18,000. Supplier B offers equipment for $53,000 with freight of $1,000, installation of $2,000 and operating and maintenance costs of $10,000. Ignoring disposal and discounting:

• Supplier A TCO = 48,000 + 2,000 + 4,000 + 18,000 = $72,000.
• Supplier B TCO = 53,000 + 1,000 + 2,000 + 10,000 = $66,000.

Supplier B has the higher purchase price but the lower ownership cost. The result is valid only if both alternatives provide equivalent performance and the estimated operating costs are credible.

3. Understanding the Supply Market

A supply market consists of buyers, suppliers, substitute products, technologies, regulations and economic forces. The buyer should examine both current conditions and likely changes.

3.1 Market structure and competition

Important questions include:

• How many qualified suppliers exist?
• Are suppliers geographically concentrated?
• Are there barriers to entry such as patents, licences, capital or specialised skills?
• Are products standardised or customised?
• Can buyers switch suppliers without major cost or delay?
• Do suppliers depend heavily on a small number of customers?
• Are substitutes available?

A market with many qualified suppliers and standard products may support competitive bidding. A market with few qualified suppliers, proprietary technology and high switching costs requires stronger risk management and relationship planning.

The Herfindahl–Hirschman Index (HHI) is one possible indicator of market concentration:

where sᵢ is supplier i’s market share expressed as a percentage. If shares are expressed as whole percentages, the index ranges from near 0 to 10,000. For example, market shares of 50%, 30% and 20% produce HHI = 50² + 30² + 20² = 3,800. A high HHI indicates concentration, but it does not automatically prove poor competition. The relevant interpretation depends on the industry, geographic market, entry barriers and competition law guidance.

3.2 Capacity and supply conditions

Capacity analysis examines whether suppliers can meet required volume, quality and timing. The buyer should investigate:

• installed and available production capacity;
• current utilisation and order backlog;
• access to raw materials and critical components;
• production lead time and minimum order quantity;
• labour, energy and transport constraints;
• business continuity and disaster-recovery arrangements;
• quality systems and process capability;
• financial resilience;
• capacity expansion plans.

Nominal capacity is not the same as available capacity. A supplier may have a large factory but little capacity available during the buyer’s required delivery period. Capacity claims should be supported by evidence such as production schedules, audits, references, certifications and performance history.

3.3 Price and cost drivers

A buyer should understand what causes supplier prices to change. Typical drivers include raw materials, energy, labour, exchange rates, freight, tariffs, regulatory compliance and demand cycles. This information improves negotiation and contract design. For example, an index-linked price adjustment may be more defensible than an unrestricted annual increase if a commodity is genuinely volatile.

3.4 Supply risk

Supply risk is the probability and consequence of interruption, non-conformance, excessive dependence or inability to recover. A useful risk assessment considers likelihood and impact:

Probability should be represented consistently, for example from 0 to 1, while consequence may be measured in money, downtime, safety impact or a documented score. Multiplying ordinal scores can support prioritisation, but it does not create a precise probability-based forecast. High-risk items require mitigation such as dual sourcing, safety stock, alternative specifications, emergency logistics or supplier development.

4. The Kraljic Portfolio Model

The Kraljic portfolio model classifies purchases according to two dimensions: profit impact and supply risk. Profit impact reflects the effect of a purchase on cost, revenue, operating performance or competitive advantage. Supply risk reflects scarcity, market complexity, switching difficulty, technological dependence and probability of interruption.

Supply risk
                    Low                 High
Profit       High   Leverage            Strategic
impact       Low    Non-critical        Bottleneck

4.1 Non-critical items

Non-critical items have low profit impact and low supply risk. Examples may include routine stationery or standard cleaning materials. The appropriate approach is efficiency: catalogue buying, automation, standardisation, blanket orders, electronic invoicing and low transaction cost.

The objective is not to conduct lengthy negotiations for every low-value purchase. Excessive administrative effort can cost more than the savings achieved.

4.2 Leverage items

Leverage items have high expenditure or commercial impact but relatively low supply risk. Standard packaging, common chemicals or widely available components may fall into this category. The buyer can use aggregated demand, competitive tendering, specification standardisation and volume negotiation.

The organisation should avoid unnecessary supplier proliferation, but it should retain credible alternatives where switching is easy and beneficial.

4.3 Bottleneck items

Bottleneck items have low expenditure but high supply risk. Specialised seals, proprietary spare parts or regulated components may be examples. The priority is continuity rather than price alone. Actions include identifying substitutes, holding appropriate inventory, obtaining technical approvals for alternatives and maintaining close visibility of lead times.

4.4 Strategic items

Strategic items have both high impact and high supply risk. They may involve major capital equipment, critical materials, proprietary technology or long-term outsourced services. Suitable strategies include early supplier involvement, joint planning, executive governance, collaborative forecasting, supplier development, contractual risk allocation and contingency planning.

The model is a decision aid, not a permanent label. A purchase can move between quadrants as demand, technology, regulation, competition or supplier capability changes. Classification should therefore be reviewed periodically.

5. Selecting a Sourcing Strategy

Sourcing strategy should align the market situation with organisational objectives. No single strategy is universally superior.

5.1 Single sourcing

Single sourcing means intentionally awarding a requirement to one supplier, often for a defined period. Advantages include volume leverage, simplified administration, consistent quality, technical integration and stronger relationship development. Disadvantages include dependence, reduced competitive pressure, vulnerability to disruption and possible complacency.

Single sourcing is most defensible when the supplier has distinctive capability, integration benefits are significant, demand is stable and credible continuity safeguards exist. The contract should address performance measures, audit rights, business continuity, change control, exit assistance and recovery plans.

5.2 Multiple sourcing

Multiple sourcing allocates demand among two or more suppliers. It can reduce dependency, preserve competition and provide additional capacity. However, it may reduce volume discounts, increase coordination and create variation in quality or service.

Multiple sourcing may be structured as a fixed allocation, a primary-and-secondary arrangement or a dynamic allocation based on performance and market conditions. The buyer should avoid dividing demand so finely that no supplier achieves economic production volume.

5.3 Local sourcing

Local sourcing uses suppliers within the buyer’s country or region. Benefits may include shorter lead times, easier communication, lower transport complexity, local economic development and simpler legal enforcement. Limitations may include a smaller supplier base, higher labour or production costs and local concentration risk.

“Local” should be defined carefully. A supplier may be locally registered but depend on imported components or an overseas parent company.

5.4 Global sourcing

Global sourcing accesses suppliers across national borders. It can provide lower cost, specialised technology, larger capacity and access to competitive markets. It also introduces currency, political, customs, sanctions, logistics, language, quality and ethical risks.

A global sourcing decision should assess landed cost rather than quoted price. Landed cost may include freight, insurance, duties, brokerage, inspection, inventory carrying cost, currency effects and disruption exposure. International sourcing must comply with applicable import controls, sanctions, product regulations, labour standards and anti-corruption laws.

5.5 Partnership and collaborative sourcing

Partnership sourcing involves a longer-term, cooperative relationship in which buyer and supplier share information, solve problems and sometimes invest jointly in capability, design or capacity. It is appropriate where requirements are complex, innovation matters, switching is costly and mutual dependence can create value.

Partnership does not mean abandoning commercial discipline. Governance should define responsibilities, intellectual-property ownership, confidentiality, performance measures, cost transparency, gain-sharing, dispute resolution and termination rights.

6. A Sourcing Decision Framework

A practical sourcing recommendation can be developed through the following sequence:

1. Clarify the business requirement. Define function and outcomes before unnecessarily specifying a particular brand or process.
2. Analyse spend and demand. Examine value, frequency, variability, sites and forecast accuracy.
3. Classify the purchase. Use the Kraljic dimensions, supplemented by operational criticality and regulatory significance.
4. Map the supply market. Identify qualified suppliers, substitutes, concentration, capacity and entry barriers.
5. Evaluate commercial alternatives. Compare TCO, quality, lead time, flexibility, sustainability and risk.
6. Choose the sourcing structure. Decide among single, multiple, local, global or partnership approaches.
7. Design the competition. Select quotation, tender, negotiation, framework agreement or direct award according to market conditions and procurement rules.
8. Plan implementation. Include transition, inventory, testing, communication, systems and supplier onboarding.
9. Monitor and review. Track performance, market change and risk indicators.

A weighted scoring model may support comparison, provided the criteria and weights are agreed before proposals are evaluated. For supplier j, a simple score is:

where wₖ is the weight for criterion k, with all weights summing to 1, and rⱼₖ is supplier j’s rating on that criterion. Ratings must use a defined scale. A high score does not override mandatory requirements: a supplier failing a safety or legal requirement should normally be excluded regardless of its total score.

7. Illustrative Case: MedEquip Components

Background

MedEquip Components, an illustrative regional manufacturer of diagnostic equipment, purchases a specialised sensor assembly. Annual spend is $900,000. The sensor is critical to the finished product, and failure to obtain it can stop production. For ten years the company has used one overseas supplier.

Problem

The supplier has announced a 12 per cent price increase and a lead-time extension from eight to fourteen weeks. MedEquip’s purchasing team initially considers demanding a lower price, but production and engineering staff warn that switching suppliers may require redesign and regulatory approval.

Analysis

Spend analysis shows that the sensor represents only 2 per cent of total purchasing expenditure but 35 per cent of production stoppage risk. The item is therefore not merely a high-spend category. Under the Kraljic model it is a strategic purchase because both supply risk and operational impact are high.

Market research identifies three potential suppliers:

The incumbent’s price increase is partly explained by a rare semiconductor input. Supplier B offers shorter transport time but needs engineering validation. Supplier C appears cheaper but has limited financial information and no proven record with MedEquip.

Approach and solution

MedEquip adopts a staged dual-sourcing strategy. It retains the incumbent for immediate continuity, negotiates a transparent semiconductor adjustment mechanism and requires a capacity-reservation commitment. In parallel, it funds technical testing and regulatory approval for Supplier B. A controlled share of future demand will move to Supplier B once quality and approval milestones are achieved.

The company also increases monitoring of semiconductor availability, establishes a carefully calculated buffer stock during the transition and adds business-continuity clauses to both contracts. Supplier C remains a contingency candidate but is not selected immediately because its capability evidence is insufficient.

Outcome

The organisation does not achieve the lowest quoted unit price in the short term. However, it reduces dependence, improves lead-time resilience and creates competitive pressure. The decision reflects TCO and risk-adjusted value rather than price alone.

Learning points

1. Low spend does not necessarily mean low strategic importance.
2. A supplier’s announced price increase should be analysed against genuine cost drivers.
3. Dual sourcing is useful only when the second supplier is technically and legally qualified.
4. Supplier development and approval can be part of sourcing strategy.
5. Continuity, quality and regulatory compliance may outweigh an immediate unit-price saving.

8. Governance, Ethics and Sustainability

Sourcing decisions must be fair, transparent and defensible. Buyers should manage conflicts of interest, protect confidential information, apply evaluation criteria consistently and maintain an auditable record. Bribery, undisclosed personal interests, bid leakage and favouritism undermine competition and may breach law or organisational policy.

Supplier evaluation should consider modern slavery, forced labour, child labour, health and safety, environmental impacts, emissions, waste, responsible minerals and data protection where relevant. Sustainability criteria should be specific and verifiable rather than vague statements of preference. For example, a tender may request evidence of emissions measurement, recycled content, certified labour practices or a documented environmental management system.

Procurement professionals should also avoid imposing unrealistic requirements that exclude capable small or local suppliers without a legitimate business reason. Proportional qualification criteria support competition and responsible procurement.

9. Technology and Contemporary Developments

Digital procurement systems can consolidate transactions, identify maverick spend, monitor supplier performance and support contract compliance. Classification software and machine learning can assist with inconsistent descriptions, but automated classifications require human review because context and risk may not be visible in transaction data.

External risk-monitoring tools can track financial distress, sanctions, weather events, geopolitical developments and transport disruption. Predictive analytics may improve forecasting, but results depend on data quality and assumptions. AI-generated supplier information should be checked against authoritative sources, and confidential procurement information should not be entered into systems without appropriate security and permission.

Contemporary sourcing is increasingly influenced by geopolitical uncertainty, cyber risk, climate disruption, regionalisation, circular economy requirements and resilience planning. The strategic question is shifting from “Who offers the lowest price?” to “How can the organisation obtain required value reliably and responsibly over the life of the requirement?”

10. Challenges and Limitations

Several limitations affect sourcing analysis:

• Spend data may be incomplete or incorrectly classified.
• Supplier information may be biased or commercially confidential.
• Market prices may change faster than the research cycle.
• Kraljic classifications can become subjective if criteria are not defined.
• Risk scores may create false precision.
• TCO estimates may depend on uncertain operating or failure costs.
• Global sourcing comparisons may omit political, ethical or disruption costs.
• A competitive tender may reduce price but damage innovation or continuity.

These limitations do not make analysis unnecessary. They require explicit assumptions, sensitivity testing, professional judgement and periodic review.

Best-Practice Checklist

Before approving a sourcing strategy, the purchasing professional should be able to answer “yes” to most of the following questions:

• Is the requirement clearly defined by function and performance?
• Has spend been cleansed, classified and reconciled?
• Have total ownership costs been considered?
• Are supplier capability and capacity supported by evidence?
• Has the purchase been classified according to impact and supply risk?
• Have substitutes and switching constraints been examined?
• Are legal, ethical, sustainability and safety requirements addressed?
• Is the proposed supplier structure proportionate to the risk?
• Are continuity, exit and transition plans documented?
• Are evaluation criteria, weights and approval records auditable?
• Is there a plan to monitor market and supplier changes?

Chapter Summary

Supply market research provides evidence for purchasing decisions by examining internal demand and external supply conditions. Spend analysis identifies expenditure patterns, supplier dependence, contract opportunities and areas of risk. It requires clean data and careful interpretation. Total cost of ownership extends analysis beyond the invoice price to include logistics, operation, maintenance, risk and disposal.

Market research should evaluate supplier numbers, substitutes, market concentration, capacity, cost drivers, barriers to entry and disruption risks. The Kraljic portfolio classifies purchases as non-critical, leverage, bottleneck or strategic according to profit impact and supply risk. Each category calls for a different emphasis: efficiency, competition, continuity or collaboration.

Single sourcing can create integration and volume benefits but increases dependence. Multiple sourcing improves resilience and competition but may increase coordination costs. Local sourcing can reduce logistics complexity, while global sourcing may offer cost and capability advantages with additional legal and geopolitical risks. Partnership sourcing is appropriate when innovation, integration and long-term mutual value are important.

A sound sourcing strategy combines spend evidence, market analysis, TCO, risk assessment, ethical governance and implementation planning. It is reviewed as market conditions, technology and organisational requirements change.

Key Terms

Supply market research: Systematic investigation of suppliers, markets, costs, capacity, risks and trends.

Spend analysis: Examination of organisational expenditure by category, supplier, location and time.

Spend cube: A multidimensional view of purchases, commonly organised by what, who and where.

Total cost of ownership: The full cost of acquiring, using, maintaining and disposing of an item or service.

Supply risk: The likelihood and consequence of difficulty or failure in obtaining supply.

Profit impact: The effect of a purchase on cost, revenue, operations or competitive performance.

Kraljic portfolio: A model classifying purchases by profit impact and supply risk.

Non-critical item: A low-impact, low-risk purchase managed for transaction efficiency.

Leverage item: A high-impact, low-risk purchase suited to competitive commercial management.

Bottleneck item: A low-impact, high-risk purchase requiring continuity protection.

Strategic item: A high-impact, high-risk purchase requiring close relationship and risk management.

Single sourcing: Deliberate use of one supplier for a requirement.

Multiple sourcing: Allocation of a requirement among two or more suppliers.

Local sourcing: Purchasing from suppliers within a defined domestic or regional area.

Global sourcing: Purchasing across national borders.

Partnership sourcing: Collaborative, long-term sourcing based on shared information and value creation.

Supplier capacity: The supplier’s ability to produce and deliver the required quantity, quality and timing.

Market concentration: The degree to which market supply is controlled by a small number of suppliers.

Maverick spend: Purchasing made outside approved contracts or procurement procedures.

Risk exposure: The combined effect of the likelihood and consequence of a risk event.

Review Questions

5 Short Answer Questions

1. What is the purpose of supply market research?
2. Identify three dimensions commonly used in a spend cube.
3. Why is total cost of ownership more informative than purchase price alone?
4. What are the two dimensions of the Kraljic portfolio model?
5. State one advantage and one disadvantage of multiple sourcing.

5 Long Answer Questions

1. Explain the process of conducting a reliable spend analysis, including data-cleaning activities.
2. Describe the four Kraljic purchase categories and recommend a management approach for each.
3. Compare local and global sourcing with reference to cost, risk, capacity and compliance.
4. Explain how competition, capacity and market concentration influence sourcing decisions.
5. Discuss the governance, ethical and sustainability responsibilities of a purchasing professional.

3 Analytical / Application Questions

1. A company buys a standard component from five qualified suppliers, but one supplier receives 85% of its annual volume. Analyse the risks and recommend whether the company should retain the allocation or introduce a second source.
2. Supplier A quotes $40,000, freight is $3,000 and three-year maintenance is $12,000. Supplier B quotes $44,000, freight is $1,000 and maintenance is $6,000. Ignoring discounting, calculate the TCO of each and recommend a supplier, subject to equivalent performance.
3. A specialised imported spare part has low annual spend but can stop a production line for two weeks. Classify it using the Kraljic model and design a sourcing and inventory strategy.

Multiple Choice Questions with Answers

Question 1

Which activity is the first essential step in a structured supply market research process?

A. Awarding the contract

B. Defining the purchasing decision

C. Selecting the cheapest supplier

D. Increasing order quantities

Correct Answer: B. Defining the purchasing decision

Question 2

Which measure shows the percentage of category expenditure received by a supplier?

A. Supplier share of spend

B. Inventory turnover

C. Defect rate

D. Order cycle time

Correct Answer: A. Supplier share of spend

Question 3

A purchase with high profit impact and high supply risk is classified by Kraljic as:

A. Non-critical

B. Leverage

C. Bottleneck

D. Strategic

Correct Answer: D. Strategic

Question 4

Which strategy generally provides the greatest immediate supplier competition?

A. Competitive multiple sourcing

B. Unreviewed single sourcing

C. Exclusive partnership

D. Direct award without research

Correct Answer: A. Competitive multiple sourcing

Question 5

Which cost is most likely included in total cost of ownership but excluded from a basic purchase-price comparison?

A. Quoted unit price

B. Operating and maintenance cost

C. Quantity ordered

D. Payment currency

Correct Answer: B. Operating and maintenance cost

Question 6

Market shares are 50%, 30% and 20%. Using whole percentages, what is the HHI?

A. 100

B. 1,000

C. 3,800

D. 10,000

Correct Answer: C. 3,800

Question 7

What is a primary objective for managing bottleneck items?

A. Minimising every transaction cost

B. Protecting continuity of supply

C. Maximising the number of suppliers

D. Selecting only local suppliers

Correct Answer: B. Protecting continuity of supply

Question 8

Which condition most strongly supports partnership sourcing?

A. A routine stationery purchase

B. A standard product with many substitutes

C. A complex requirement involving integration and innovation

D. A one-time purchase with no technical risk

Correct Answer: C. A complex requirement involving integration and innovation

Question 9

What is a major risk of single sourcing?

A. Excessive supplier dependence

B. Too many invoices from different suppliers

C. Loss of all volume leverage

D. Inability to develop relationships

Correct Answer: A. Excessive supplier dependence

Question 10

In a weighted supplier score, the criterion weights should normally:

A. Be selected after seeing supplier prices

B. Sum to 1 or 100%

C. Be identical for every criterion

D. Exclude quality and risk

Correct Answer: B. Sum to 1 or 100%