Question 1

Which of the following is not one of the formal approaches to supply base rationalization?

Accepted Answer

A)  Twenty/eighty rule.
B)  "Improve or else" approach.
C)  Global sourcing.
D)  Triage approach.
E)  Competency staircase approach.

Question 2

Supply base rationalization and optimization often involves eliminating those suppliers who are unwilling to achieve (or are incapable of achieving) supply management performance objectives, either currently or expected in the near future.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a typical qualitative service factor in a supplier performance measurement system?

Accepted Answer

A)  Problem resolution ability.
B)  Technical ability.
C)  Process capability.
D)  Ongoing progress reporting.
E)  Wavelength.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Overall reduction in material usage can be accomplished through engineering design changes and reuse and recycle programs.

Accepted Answer

A) True 
 B)False

Question 6

In overcoming the barriers to supplier development, which of the following is not one of the approaches typically used?

Accepted Answer

A)  Direct-involvement activities.
B)  Single sourcing.
C)  Incentives and rewards.
D)  Warnings and penalties.
E)  Hands-on activities.

Question 7

The supplier performance index (SPI)  equals (_____ plus _____)  divided by _____.

Accepted Answer

A)  Total Purchases….Nonperformance Costs….Total Purchases
B)  Nonperformance Costs….Total Purchases….Nonperformance Costs
C)  Total Purchases….Appraisal Costs….External Failure Costs
D)  External Failure Costs….Internal Failure Costs….Total Purchases
E)  Transportation Costs….Appraisal Costs….Prevention Costs

Question 8

Scenario analysis is technically considered forecasting and attempts to explore and prepare for a few 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 9

Which of the following is a disadvantage of a weighted-point supplier evaluation system?

Accepted Answer

A)  Tends to focus on unit price.
B)  Most complex, so implementation costs are high.
C)  Most subjective.
D)  Least reliable.
E)  Cost accounting system required.

Question 10

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.

Question 11

Pursuing supplier development activities directly with suppliers is both quick and easy.

Accepted Answer

A) True 
 B)False

Question 12

Certain risks, such as those arising from war, piracy, and losses attributable to delays in transit, are generally covered by standard insurance policies.

Accepted Answer

A) True 
 B)False

Question 13

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.

Question 14

_____ is an internal situation when a buyer or manager at the buying company has an undisclosed ownership or financial interest in the supplier or when goods or services are purchased for the buyer's or manager's own personal use.

Accepted Answer

A)  Buyer conflict of interest
B)  Falsified counts
C)  Fictitious invoices
D)  Improper specifications
E)  Loss in transit

Question 15

Full awareness of the causes and effects of supply chain fraud are typically recognized outside the accounting professions.

Accepted Answer

A) True 
 B)False

Question 16

All buyers are encouraged to engage in currency hedging activities, regardless of their level of experience.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Regarding supply base risk, every sourcing decision is different and must be carefully evaluated in its own right.

Accepted Answer

A) True 
 B)False

Question 19

_____ can be defined as how supply chain members communicate and collaborate regarding sources of risk, utilizing risk management tools to mitigate and minimize risk and uncertainty across the supply chain.

Accepted Answer

A)  PERT/CPM
B)  Scenario analysis
C)  Hedging
D)  SCRM
E)  None of these answers.

Question 20

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 by supplier's management.
C)  Poor implementation of improvements.
D)  Lack of skilled engineering resources.
E)  Insufficient employee skill levels.

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

Which of the following is not a typical qualitative service factor in a supplier performance measurement system?

Correct AnswerverifiedShow Answer

Pursuing supplier development activities directly with suppliers is both quick and easy.

Correct AnswerverifiedShow Answer

The supplier performance index (SPI) equals (_____ plus _____) divided by _____.

Correct AnswerverifiedShow Answer

_____ is an internal situation when a buyer or manager at the buying company has an undisclosed ownership or financial interest in the supplier or when goods or services are purchased for the buyer's or manager's own personal use.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In overcoming the barriers to supplier development, which of the following is not one of the approaches typically used?

Correct AnswerverifiedShow Answer

All buyers are encouraged to engage in currency hedging activities, regardless of their level of experience.

Correct AnswerverifiedShow Answer

Full awareness of the causes and effects of supply chain fraud are typically recognized outside the accounting professions.

Correct AnswerverifiedShow Answer

_____ can be defined as how supply chain members communicate and collaborate regarding sources of risk, utilizing risk management tools to mitigate and minimize risk and uncertainty across the supply chain.

Correct AnswerverifiedShow Answer

Overall reduction in material usage can be accomplished through engineering design changes and reuse and recycle programs.

Correct AnswerverifiedShow Answer

Regarding supply base risk, every sourcing decision is different and must be carefully evaluated in its own right.

Correct AnswerverifiedShow Answer

Supply base rationalization and optimization often involves eliminating those suppliers who are unwilling to achieve (or are incapable of achieving) supply management performance objectives, either currently or expected in the near future.

Correct AnswerverifiedShow Answer

Certain risks, such as those arising from war, piracy, and losses attributable to delays in transit, are generally covered by standard insurance policies.

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of a weighted-point supplier evaluation system?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not one of the formal approaches to supply base rationalization?

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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The supplier performance index (SPI) equals (___ plus _) divided by ___.

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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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