Question 1

The supplier performance index (SPI) always provides a complete or accurate assessment of supplier performance.

Accepted Answer

A) True 
 B)False

Question 2

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 3

All of the following are common contingency management tools that can be effectively used at the tactical level to assist the supply manager in identifying, analyzing, reducing, and monitoring supply base risk except _____.

Accepted Answer

A)  single sourcing
B)  inventory
C)  automated visibility and early warning systems
D)  use of third party intermediaries
E)  scenario analysisF) A) and B)
G) B) and E)

Question 4

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 5

A single source can never deliver cost and quality improvements over the life of a contract even if a buyer manages that supplier effectively.

Accepted Answer

A) True 
 B)False

Question 6

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 7

All organizations need to pursue supplier development.

Accepted Answer

A) True 
 B)False

Question 8

_____ involves a detailed analysis of the supply base to ensure that only the most capable and highest performing suppliers are kept in the supply base after it is rationalized.

Accepted Answer

A)  Supply base optimization
B)  Outsourcing
C)  Strategic sourcing
D)  Supply base reduction
E)  Supply base managementF) A) and E)
G) B) and E)

Question 9

The cost-based system is the most thorough and least subjective of the three supplier performance measurement systems.

Accepted Answer

A) True 
 B)False

Question 10

Central to the design of all supplier measurement systems is the decision about what to measure and how to weight various performance categories.

Accepted Answer

A) True 
 B)False

Question 11

Maintaining small quantities of inventory has been the traditional method of dealing with supply base risk.

Accepted Answer

A) True 
 B)False

Question 12

Buyers rarely rely on suppliers for cost-reduction assistance.

Accepted Answer

A) True 
 B)False

Question 13

All of the following are advantages of a weighted-point supplier evaluation system except _____.

Accepted Answer

A)  flexible system
B)  supplier ranking allowed
C)  moderate implementation costs
D)  total cost approach
E)  quantitative and qualitative factors combined into a single systemF) B) and E)
G) C) and D)

Question 14

A smaller supplier with limited capacity for growth may need to eliminate some existing customers to meet the increased requirements of a larger customer.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a typical supplier development activity?

Accepted Answer

A)  Providing incentives to suppliers for improved performance.
B)  Promoting competition among suppliers.
C)  Raising prices paid for purchased goods and services.
D)  Directly involving buyer personnel with suppliers.
E)  Providing necessary capital.F) B) and D)
G) B) and E)

Question 16

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) D) and E)
G) A) and B)

Question 17

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

Accepted Answer

A)  Buying from world-class suppliers.
B)  Use of full-service suppliers.
C)  Lower supply base administrative costs.
D)  Reduction of supply base risk.
E)  Absence of competition.F) B) and C)
G) B) and D)

Question 18

Suppliers are sometimes not willing to accept outside help in the form of supplier development, either because they are too proud to accept help or because they do not see the value in improving quality or delivery performance.

Accepted Answer

A) True 
 B)False

Question 19

The administrative cost of maintaining 5,000 suppliers will be dramatically lower than the cost of maintaining a core group of 500 highly qualified suppliers.

Accepted Answer

A) True 
 B)False

Question 20

The _____ identifies those 20 percent of suppliers receiving the bulk of purchase spend or that minority of suppliers that causes the most quality problems.

Accepted Answer

A)  "improve or else" approach
B)  triage approach
C)  strategic sourcing approach
D)  competency staircase approach
E)  twenty/eighty ruleF) A) and B)
G) A) and C)

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

The supplier performance index (SPI) always provides a complete or accurate assessment of supplier performance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Maintaining small quantities of inventory has been the traditional method of dealing with supply base risk.

Correct AnswerverifiedShow Answer

Buyers rarely rely on suppliers for cost-reduction assistance.

Correct AnswerverifiedShow Answer

A smaller supplier with limited capacity for growth may need to eliminate some existing customers to meet the increased requirements of a larger customer.

Correct AnswerverifiedShow Answer

The administrative cost of maintaining 5,000 suppliers will be dramatically lower than the cost of maintaining a core group of 500 highly qualified suppliers.

Correct AnswerverifiedShow Answer

All of the following are common contingency management tools that can be effectively used at the tactical level to assist the supply manager in identifying, analyzing, reducing, and monitoring supply base risk except _____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

_____ involves a detailed analysis of the supply base to ensure that only the most capable and highest performing suppliers are kept in the supply base after it is rationalized.

Correct AnswerverifiedShow Answer

Which of the following is not a typical supplier development activity?

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

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

Suppliers are sometimes not willing to accept outside help in the form of supplier development, either because they are too proud to accept help or because they do not see the value in improving quality or delivery performance.

Correct AnswerverifiedShow Answer

All of the following are advantages of a weighted-point supplier evaluation system except _____.

Correct AnswerverifiedShow Answer

A single source can never deliver cost and quality improvements over the life of a contract even if a buyer manages that supplier effectively.

Correct AnswerverifiedShow Answer

All organizations need to pursue supplier development.

Correct AnswerverifiedShow Answer

The _____ identifies those 20 percent of suppliers receiving the bulk of purchase spend or that minority of suppliers that causes the most quality problems.

Correct AnswerverifiedShow Answer

The cost-based system is the most thorough and least subjective of the three supplier performance measurement systems.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Central to the design of all supplier measurement systems is the decision about what to measure and how to weight various performance categories.

Correct AnswerverifiedShow Answer

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