What is the primary purpose of a CAGE code in vendor master data management?

The primary purpose of a CAGE code in vendor master data management is to prevent replication of vendor master data. A CAGE (Commercial and Government Entity) code is a unique identifier assigned to suppliers, manufacturers, and other entities doing business with the U.S. government. This code helps ensure accurate and effective management of vendor information by allowing organizations to succinctly identify and differentiate between various entities.

By utilizing CAGE codes, companies can avoid creating duplicate records within their vendor master data. This is crucial for maintaining data integrity, as well as streamlining procurement processes, reducing confusion or errors related to vendor identification, and improving the overall efficiency of vendor management practices.

In the context of the other options, identifying individual employees, maintaining financial records, and categorizing vendors by type do not accurately reflect the primary function of a CAGE code. Instead, the focus on preventing data duplication highlights how CAGE codes serve as a critical tool in organizing and managing vendor information effectively.