High risk, low value items are managed as which category?

High risk, low value items are managed as which category?

• A. Non-Critical
• B. Leverage
• C. Bottleneck
• D. Strategic

Answer: (C)

In the Kraljic portfolio approach, items are sorted by supply risk and profit impact. High risk combined with low value describes items whose supply is unstable or scarce, yet they don’t contribute much to overall profit. Those are labeled Bottleneck items because they can bottleneck operations even though they’re not big spenders. The main strategy is to secure and stabilize supply—think dual sourcing, long-term contracts with key suppliers, supplier development, and safety stock or contingency plans to prevent disruptions. This contrasts with other categories: Strategic (high risk and high value), Leverage (low risk but high value), and Non-Critical (low risk and low value), which don’t match the given profile.

In the Kraljic portfolio approach, items are sorted by supply risk and profit impact. High risk combined with low value describes items whose supply is unstable or scarce, yet they don’t contribute much to overall profit. Those are labeled Bottleneck items because they can bottleneck operations even though they’re not big spenders. The main strategy is to secure and stabilize supply—think dual sourcing, long-term contracts with key suppliers, supplier development, and safety stock or contingency plans to prevent disruptions. This contrasts with other categories: Strategic (high risk and high value), Leverage (low risk but high value), and Non-Critical (low risk and low value), which don’t match the given profile.