Question 1

_____ focuses on the continued ability of the supplier's human, intellectual, and physical capital to meet the buying firm's requirements with respect to quality and delivery.

Accepted Answer

A)   Operational risk management
B)   Global sourcing
C)   Logistics risk management
D)   Total quality management
E)   Financial risk managementF) None of the above
G) A) and C)

Question 2

Supply departments that are building diversity into their supply base are likely to deal with a decreased number of small suppliers.

Accepted Answer

A) True 
 B)False

Question 3

Supplier size does become a factor when one firm decides to leverage its purchases from one or a few suppliers.

Accepted Answer

A) True 
 B)False

Question 4

_____ are more responsive to the buying firm's changing needs and can economically make frequent smaller deliveries.

Accepted Answer

A)   Local suppliers
B)   International suppliers
C)   Global suppliers
D)   National suppliers
E)   There is no relationship with the location of the supplier and customer responsiveness.F) C) and E)
G) B) and C)

Question 5

Supplier site visits are relatively inexpensive and require minimal buyer time in travel and information collection.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not an example of points that should be considered when evaluating a supplier's employee capabilities?

Accepted Answer

A)   The degree to which employees are committed to quality and continuous improvement.
B)   The overall skills and abilities of the workforce.
C)   Employee morale.
D)   Workforce turnover.
E)   Disclosure of environmental infractions.F) B) and C)
G) A) and B)

Question 7

Which of the following information is not generally maintained in a supplier informational database?

Accepted Answer

A)   Current products.
B)   Supplier's future technology roadmap.
C)   Process capability ratios.
D)   Advertising campaign information.
E)   Past performance.F) B) and E)
G) A) and D)

Question 8

The selection criteria used in a high-technology purchase will be the same as those used for a distributor.

Accepted Answer

A) True 
 B)False

Question 9

Most purchasers fail to perform at least a cursory financial analysis of prospective suppliers.

Accepted Answer

A) True 
 B)False

Question 10

_____ is a program that distributors market to manage their customers' inventory for them.

Accepted Answer

A)   Just-in-time
B)   Supplier managed inventory
C)   Self-managed inventory
D)   Countertrade
E)   Preferred supplier inventoryF) B) and E)
G) A) and B)

Question 11

All of the following are characteristics of an effective supplier survey except _____.

Accepted Answer

A)   the survey should include the performance categories considered important to the evaluation and selection process
B)   the survey process should be as objective as possible
C)   it is mathematically straightforward
D)   the buyer should attempt to measure every possible variable every time it is used
E)   the format of the evaluation should provide some flexibility across different types of purchase requirementsF) A) and B)
G) None of the above

Question 12

Which of the following key financial ratios is calculated as Current assets/Current liabilities?

Accepted Answer

A)   Inventory turnover.
B)   Debt to equity.
C)   Current ratio.
D)   Total asset turnover.
E)   Quick ratio.F) B) and C)
G) C) and E)

Question 13

Which of the following is not an example of a question that should be asked when evaluating a supplier's production scheduling and control systems?

Accepted Answer

A)   Does the supplier use a requirements planning system as part of an ERP system to ensure the availability of required components or meet service requests on a timely basis?
B)   What lead time does the supplier's production scheduling and control system require?
C)   What is the supplier's on-time delivery performance history?
D)   Does the supplier's scheduling system support a purchaser's delivery requirements?
E)   What safeguards are in place to protect the confidentiality of electronic transfers?F) A) and D)
G) D) and E)

Question 14

A/An _____ involves sending a preliminary survey to suppliers.

Accepted Answer

A)   request for quotation
B)   request for information
C)   purchase order
D)   order release
E)   All of the above.F) All of the above
G) B) and C)

Question 15

_____ is the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events before they occur or reducing the probability that they will occur, and making contingency plans to mitigate the consequences if they do occur.

Accepted Answer

A)   Supplier selection
B)   Supplier evaluation
C)   Supplier categorization
D)   Global sourcing
E)   Risk managementF) A) and C)
G) C) and D)

Question 16

Certain suppliers who may present the lowest cost seldom present greater risks.

Accepted Answer

A) True 
 B)False

Question 17

Sustainable carbon footprint reductions should be measured at product suppliers but not at service suppliers.

Accepted Answer

A) True 
 B)False

Question 18

_____ is defined as the continual monitoring of the strength of suppliers' financial condition to ensure their ability to meet the purchaser's performance requirements for products or services.

Accepted Answer

A)   Operational risk management
B)   Sole sourcing
C)   Financial risk management
D)   Multiple sourcing
E)   None of the above.F) A) and E)
G) None of the above

Question 19

All of the following are examples of questions that should be asked when evaluating a supplier for longer-term relationship potential except _____.

Accepted Answer

A)   Has the supplier indicated a willingness or commitment to a longer-term relationship?
B)   Will the supplier engage in joint problem solving and improvement efforts?
C)   What is the supplier's on-time delivery performance?
D)   Is the supplier willing to come to us first with innovations?
E)   Is the corporate culture similar between the two parties?F) C) and D)
G) B) and E)

Question 20

Which of the following is not a risk of selecting a supplier in poor financial condition?​

Accepted Answer

A)   The supplier is unwilling to share its technical expertise with the purchaser.
B)   The supplier will go out of business.
C)   The supplier may not have the resources to invest in plant, equipment, or research that is necessary for longer-term technological or other performance improvements.
D)   The supplier may become too financially dependent on the purchaser.
E)   Financial weakness is usually an indication of other underlying problems.F) A) and B)
G) B) and D)

Exam 7: Supplier Evaluation and Selection

Supplier site visits are relatively inexpensive and require minimal buyer time in travel and information collection.

Correct AnswerverifiedShow Answer

All of the following are characteristics of an effective supplier survey except _____.

Correct AnswerverifiedShow Answer

All of the following are examples of questions that should be asked when evaluating a supplier for longer-term relationship potential except _____.

Correct AnswerverifiedShow Answer

Supply departments that are building diversity into their supply base are likely to deal with a decreased number of small suppliers.

Correct AnswerverifiedShow Answer

_____ is a program that distributors market to manage their customers' inventory for them.

Correct AnswerverifiedShow Answer

_____ is defined as the continual monitoring of the strength of suppliers' financial condition to ensure their ability to meet the purchaser's performance requirements for products or services.

Correct AnswerverifiedShow Answer

The selection criteria used in a high-technology purchase will be the same as those used for a distributor.

Correct AnswerverifiedShow Answer

Which of the following is not a risk of selecting a supplier in poor financial condition?​

Correct AnswerverifiedShow Answer

Supplier size does become a factor when one firm decides to leverage its purchases from one or a few suppliers.

Correct AnswerverifiedShow Answer

Most purchasers fail to perform at least a cursory financial analysis of prospective suppliers.

Correct AnswerverifiedShow Answer

Which of the following is not an example of points that should be considered when evaluating a supplier's employee capabilities?

Correct AnswerverifiedShow Answer

_____ is the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events before they occur or reducing the probability that they will occur, and making contingency plans to mitigate the consequences if they do occur.

Correct AnswerverifiedShow Answer

Which of the following information is not generally maintained in a supplier informational database?

Correct AnswerverifiedShow Answer

_____ focuses on the continued ability of the supplier's human, intellectual, and physical capital to meet the buying firm's requirements with respect to quality and delivery.

Correct AnswerverifiedShow Answer

Certain suppliers who may present the lowest cost seldom present greater risks.

Correct AnswerverifiedShow Answer

Which of the following key financial ratios is calculated as Current assets/Current liabilities?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a question that should be asked when evaluating a supplier's production scheduling and control systems?

Correct AnswerverifiedShow Answer

_____ are more responsive to the buying firm's changing needs and can economically make frequent smaller deliveries.

Correct AnswerverifiedShow Answer

A/An _____ involves sending a preliminary survey to suppliers.

Correct AnswerverifiedShow Answer

Sustainable carbon footprint reductions should be measured at product suppliers but not at service suppliers.

Correct AnswerverifiedShow Answer

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Which of the following is not a risk of selecting a supplier in poor financial condition?

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