Question 1

Supplier rationalization and optimization should be a one-time activity.

Accepted Answer

A) True 
 B)False

Question 2

Short-term purchase contracts that award small volumes of business to multiple suppliers decrease production costs and provide incentive for individual supplier investments in process improvement.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not one of the management uses for the data derived from a comprehensive cost-base supplier evaluation system?​

Accepted Answer

A)   Such a system provides the necessary information that allows a buyer to justify buying from a preferred supplier despite a higher unit price.
B)   The system allows a buyer to communicate the cost of specific nonperformance events to the originating supplier, which then helps identify improvement opportunities.
C)   Quantifying nonconformance costs can result in a chargeback to the offending supplier for unplanned costs.
D)   The system allows customized assignment of cost accounting codes depending on how much money is left in the annual budget.
E)   A buyer can use this data to identify longer-term sources of supply based on a supplier's total cost performance history.F) D) and E)
G) C) and D)

Question 4

In an absence of competition situation, a supplier may hold the buyer hostage by unduly raising prices without justification or becoming too complacent, particularly when there are higher switching costs.

Accepted Answer

A) True 
 B)False  True

Question 5

Multiple sourcing can add quality variability to the sourced product because of the use of different materials, manufacturing techniques, and processes.

Accepted Answer

A) True 
 B)False

Question 6

A large supply base means the duplication of a wide range of supply management activities, adding to acquisition cost without a corresponding increase in value added to the customer.

Accepted Answer

A) True 
 B)False

Question 7

Considering the cost-based supplier evaluation system, the actual cost per nonconformance event may be difficult to estimate or calculate, as many traditional cost accounting systems are not designed to identify and capture such data.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are advantages of a categorical supplier evaluation system except _____.

Accepted Answer

A)   easy to implement
B)   requires minimal data
C)   different personnel can contribute
D)   low-cost system
E)   greatest potential for long-range improvementF) B) and E)
G) A) and B)

Question 9

The remaining suppliers in a rationalized and optimized supply base are seldom capable of performing additional tasks or providing other products and services that add value to the buyer-supplier relationship.

Accepted Answer

A) True 
 B)False  False

Question 10

Buyers can minimize supply disruption risk from a single suppler by selecting a supplier with multiple production facilities.

Accepted Answer

A) True 
 B)False

Question 11

The _____ requires the systematic evaluation of the performance of individual suppliers and ultimate placement into one of three categories.

Accepted Answer

A)   twenty/eighty rule
B)   competency staircase approach
C)   "improve or else" approach
D)   triage approach
E)   zero defects approachF) B) and C)
G) None of the above

Question 12

Direct involvement in a supplier's operations by buyer personnel is the most challenging part of any supplier development process.

Accepted Answer

A) True 
 B)False

Question 13

The prime reason for hedging is to protect the buyer against major swings in the value of a future purchase.

Accepted Answer

A) True 
 B)False

Question 14

_____ allows a buying organization to react more quickly when supply chain risk events occur by already having previously prepared plans and proposed responses in place in advance of the actual risk event.

Accepted Answer

A)   Hedging
B)   Use of third party intermediaries
C)   Multiple sourcing
D)   Scenario analysis
E)   None of the above.F) C) and E)
G) All of the above D

Question 15

The _____ is a normalization factor for the supplier performance index (SPI)  that eliminates high-dollar lot bias.

Accepted Answer

A)   Cp
B)   MRO
C)   Q adjustment factor
D)   Cpk
E)   RfxF) B) and C)
G) All of the above

Question 16

Which of the following is not a supplier-specific barrier to supplier development?

Accepted Answer

A)   No immediate benefit to supplier development is evident in the buying organization.
B)   Lack of commitment on the part of supplier's management.
C)   Supplier's management agrees to improvements but fails to implement the proposals.
D)   Supplier lacks engineering resources to implement solutions.
E)   Supplier lacks employee skill base to implement solutions.F) B) and E)
G) A) and B)

Question 17

In _____, a buyer selects or develops suppliers with multiple or redundant capabilities.

Accepted Answer

A)   single sourcing
B)   cross-sourcing
C)   global sourcing
D)   strategic sourcing
E)   sole sourcingF) A) and B)
G) C) and E)

Question 18

Which of the following is not one of the typical uses of supplier measurement data?

Accepted Answer

A)   Supporting supply base rationalization and optimization.
B)   Identifying those highly capable suppliers that may qualify for consideration of longer-term partnerships or designation as preferred suppliers.
C)   Identifying those suppliers that are not performing at expected levels so that appropriate remedial or development actions can be taken.
D)   Deciding where to locate supplier facilities.
E)   Determining a supplier's future purchase volume based on its past performance.F) B) and E)
G) None of the above

Question 19

Scenario analysis is technically considered forecasting and attempts to explore and prepare for possible future scenarios that may have a significant negative impact on the costs and operations of an organization.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not one of the advantages of a rationalized and optimized supply base?

Accepted Answer

A)   Longer lead-times.
B)   Use of full-service suppliers.
C)   Lower total product cost.
D)   Ability to pursue complex supply management strategies.
E)   Buying from world-class suppliers.F) B) and D)
G) B) and E)

Exam 9: Supplier Management and Development: Creating a World-Class Supply Base

Supplier rationalization and optimization should be a one-time activity.

Correct AnswerverifiedShow Answer

Short-term purchase contracts that award small volumes of business to multiple suppliers decrease production costs and provide incentive for individual supplier investments in process improvement.

Correct AnswerverifiedShow Answer

Which of the following is not one of the management uses for the data derived from a comprehensive cost-base supplier evaluation system?​

Correct AnswerverifiedShow Answer

In an absence of competition situation, a supplier may hold the buyer hostage by unduly raising prices without justification or becoming too complacent, particularly when there are higher switching costs.

Correct AnswerverifiedTrue

Multiple sourcing can add quality variability to the sourced product because of the use of different materials, manufacturing techniques, and processes.

Correct AnswerverifiedShow Answer

A large supply base means the duplication of a wide range of supply management activities, adding to acquisition cost without a corresponding increase in value added to the customer.

Correct AnswerverifiedShow Answer

Considering the cost-based supplier evaluation system, the actual cost per nonconformance event may be difficult to estimate or calculate, as many traditional cost accounting systems are not designed to identify and capture such data.

Correct AnswerverifiedShow Answer

All of the following are advantages of a categorical supplier evaluation system except _____.

Correct AnswerverifiedShow Answer

The remaining suppliers in a rationalized and optimized supply base are seldom capable of performing additional tasks or providing other products and services that add value to the buyer-supplier relationship.

Correct AnswerverifiedFalse

Buyers can minimize supply disruption risk from a single suppler by selecting a supplier with multiple production facilities.

Correct AnswerverifiedShow Answer

The _____ requires the systematic evaluation of the performance of individual suppliers and ultimate placement into one of three categories.

Correct AnswerverifiedShow Answer

Direct involvement in a supplier's operations by buyer personnel is the most challenging part of any supplier development process.

Correct AnswerverifiedShow Answer

The prime reason for hedging is to protect the buyer against major swings in the value of a future purchase.

Correct AnswerverifiedShow Answer

_____ allows a buying organization to react more quickly when supply chain risk events occur by already having previously prepared plans and proposed responses in place in advance of the actual risk event.

Correct AnswerverifiedD

The _____ is a normalization factor for the supplier performance index (SPI) that eliminates high-dollar lot bias.

Correct AnswerverifiedShow Answer

Which of the following is not a supplier-specific barrier to supplier development?

Correct AnswerverifiedShow Answer

In _____, a buyer selects or develops suppliers with multiple or redundant capabilities.

Correct AnswerverifiedShow Answer

Which of the following is not one of the typical uses of supplier measurement data?

Correct AnswerverifiedShow Answer

Scenario analysis is technically considered forecasting and attempts to explore and prepare for possible future scenarios that may have a significant negative impact on the costs and operations of an organization.

Correct AnswerverifiedShow Answer

Which of the following is not one of the advantages of a rationalized and optimized supply base?

Correct AnswerverifiedShow Answer

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Which of the following is not one of the management uses for the data derived from a comprehensive cost-base supplier evaluation system?

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True

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False

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D

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