What is a key benefit of maintaining a small number of suppliers for a company's products?

Maintaining a small number of suppliers can lead to better relationships, which can significantly influence various aspects of business operations, including favorable repayment terms. When a company works closely with a limited number of suppliers, it fosters stronger partnerships built on trust and reliability. This can translate into various advantages, such as more flexible credit terms, priority service, and better responsiveness to the company's needs.

Strong relationships often encourage suppliers to be more accommodating in negotiations, which can result in more lenient repayment schedules or discounts for early payments. Additionally, suppliers may be more willing to collaborate on product development or offer support in managing inventory levels. This strong engagement can create a win-win situation for both the company and the suppliers, as both parties have a vested interest in the success of the partnership.

In contrast, options related to reduced costs across all suppliers, access to a wider variety of products, and increased competition among suppliers do not align with the focus on a small supplier base. A limited supplier number typically does not equate to lower costs or increased competition, nor does it necessarily provide a broader range of product choices, which are usually associated with having multiple, diverse suppliers.