SCM201 LATEST 2026 TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
✔✔B - ✔✔The _____ requires suppliers to successfully navigate a successive series of
performance milestones or hurdles in order to remain in the supply base.
a. triage approach
b. competency staircase approach
c. M*A*S*H approach
d. "improve or else" approach
e. twenty/eighty rule
✔✔D - ✔✔_____ is any activity undertaken by a buyer to improve a supplier's
performance or capabilities to meet the buyer's short- and long-term supply needs.
a. Supply base rationalization
b. The twenty/eighty rule
c. Supply base optimization
d. Supplier development
e. Six Sigma
✔✔C - ✔✔Which of the following is NOT a typical supplier development activity?
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. Conducting training and process improvement initiatives.
✔✔B - ✔✔In overcoming the barriers to supplier development, which of the following is
NOT one of the approaches typically used?
a. Direct-involvement activities.
b. Single sourcing.
c. Incentives and rewards.
d. Warnings and penalties.
e. All of the above are typical approaches.
✔✔E - ✔✔Which of the following is NOT a buyer-specific barrier to supplier
development?
a. The buying company's purchase volume from the supplier does not justify
development investment
b. No immediate benefit to supplier development is evident to the buying organization.
c. Lack of executive support within the buying organization for supplier development.
d. Importance of purchased item does not justify development efforts.
e. Supplier's management agrees to improvement but fails to implement the proposals.
✔✔A - ✔✔Which of the following is NOT a supplier-specific barrier to supplier
development?
, 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.
✔✔E - ✔✔All of the following are general categories of supply base risk EXCEPT
_____.
a. political risk
b. market risk
c. sourcing risk
d. financial risk
e. employee hiring risk
✔✔D - ✔✔_____ in a supply base consists of such factors as: country stability, regional
stability, political and governmental stability, levels of official corruption, dissimilarities
regarding contract law and intellectual property rights, elections, military actions, civil
disturbances, terrorism, trade balance issues, and customs duties and tariffs.
a. Financial risk
b. Market risk
c. Supplier company risk
d. Political risk
e. Sourcing risk
✔✔C - ✔✔All of the following are elements of market risk in a supply base EXCEPT
_____.
a. the number of buyers competing for the same goods or source of supply
b. increasingly shorter product life cycles
c. regional political risk
d. threat of emerging, often disruptive, technologies
e. protecting and maintaining trade secrets and intellectual properties from misuse or
misappropriation by suppliers, particularly those located overseas
✔✔E - ✔✔Which of the following is NOT one of the elements of financial risk in a supply
base?
a. Inventory carrying costs.
b. Currency exchange rates.
c. INCOTERMS
d. Hard vs. soft currencies.
e. Legal systems.
✔✔A - ✔✔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 _____.
a. single sourcing
b. inventory
SOLUTIONS GRADED A+
✔✔B - ✔✔The _____ requires suppliers to successfully navigate a successive series of
performance milestones or hurdles in order to remain in the supply base.
a. triage approach
b. competency staircase approach
c. M*A*S*H approach
d. "improve or else" approach
e. twenty/eighty rule
✔✔D - ✔✔_____ is any activity undertaken by a buyer to improve a supplier's
performance or capabilities to meet the buyer's short- and long-term supply needs.
a. Supply base rationalization
b. The twenty/eighty rule
c. Supply base optimization
d. Supplier development
e. Six Sigma
✔✔C - ✔✔Which of the following is NOT a typical supplier development activity?
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. Conducting training and process improvement initiatives.
✔✔B - ✔✔In overcoming the barriers to supplier development, which of the following is
NOT one of the approaches typically used?
a. Direct-involvement activities.
b. Single sourcing.
c. Incentives and rewards.
d. Warnings and penalties.
e. All of the above are typical approaches.
✔✔E - ✔✔Which of the following is NOT a buyer-specific barrier to supplier
development?
a. The buying company's purchase volume from the supplier does not justify
development investment
b. No immediate benefit to supplier development is evident to the buying organization.
c. Lack of executive support within the buying organization for supplier development.
d. Importance of purchased item does not justify development efforts.
e. Supplier's management agrees to improvement but fails to implement the proposals.
✔✔A - ✔✔Which of the following is NOT a supplier-specific barrier to supplier
development?
, 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.
✔✔E - ✔✔All of the following are general categories of supply base risk EXCEPT
_____.
a. political risk
b. market risk
c. sourcing risk
d. financial risk
e. employee hiring risk
✔✔D - ✔✔_____ in a supply base consists of such factors as: country stability, regional
stability, political and governmental stability, levels of official corruption, dissimilarities
regarding contract law and intellectual property rights, elections, military actions, civil
disturbances, terrorism, trade balance issues, and customs duties and tariffs.
a. Financial risk
b. Market risk
c. Supplier company risk
d. Political risk
e. Sourcing risk
✔✔C - ✔✔All of the following are elements of market risk in a supply base EXCEPT
_____.
a. the number of buyers competing for the same goods or source of supply
b. increasingly shorter product life cycles
c. regional political risk
d. threat of emerging, often disruptive, technologies
e. protecting and maintaining trade secrets and intellectual properties from misuse or
misappropriation by suppliers, particularly those located overseas
✔✔E - ✔✔Which of the following is NOT one of the elements of financial risk in a supply
base?
a. Inventory carrying costs.
b. Currency exchange rates.
c. INCOTERMS
d. Hard vs. soft currencies.
e. Legal systems.
✔✔A - ✔✔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 _____.
a. single sourcing
b. inventory
