©THESTAR 2024/2025 ALL RIGHTS RESERVED 10:08PM.
SCM 421 Exam Questions And Answers 2025
Update.
Why Measure Supplier Performance? - Answer✔• Uncover and remove hidden waste and cost
drivers
• Gain insight on how best to leverage the supply base
• Align customer and supplier business practices
• Improve supplier performance
What is the most strategic thing procurement does? - Answer✔select suppliers
What is sourcing? - Answer✔Selecting Suppliers
What are the common supplier evaluation criteria? - Answer✔• Financial health
• Expertise
• Operational performance metrics
• Business processes and practices
• Enabling behaviors or cultural factors
• Risk factors
What is the financial health of a supplier? - Answer✔Sales, profitability, liquidity, ROI, and debt
ratio
What is the expertise of a supplier? - Answer✔Quality and production capabilities, technical
capabilities, R&D investment
What are the operational performance metrics of a supplier? - Answer✔On-time delivery, lead
time, responsiveness, inventory
management and control, customer service
What is the business processes and practices of a supplier? - Answer✔ISO 9000 certification
1
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 10:08PM.
What are the enabling behaviors or cultural factors of a supplier? - Answer✔Qualitative factors
are also critical in supplier evaluations
What are the risk factors of a supplier? - Answer✔A supplier's risks are risks for the buyer
What are the common types of supplier evaluation systems used? - Answer✔Cost-ratio,
categorical method, weighted point method, grade method, and hurdle method
What is the cost ratio method? - Answer✔• Relates identifiable purchasing costs to the value of
the shipments received from the respective suppliers
• More of an objective approach and thus less susceptible to human bias. (Total Cost gives you
a more realistic sense cost of dealing with a supplier)
What is the categorical method? - Answer✔Buyers categorize each supplier as good (+), bad (-),
or
neutral (0) on various performance factors (e.g., cost,
quality, speed)
Advantages of the categorical method: - Answer✔- Simple and easy to implement
- Inexpensive
- Requires minimum performance data
- A non-quantitative method of keeping systematic records of performance
(very simple)
Disadvantages of the categorical method: - Answer✔Treats all categories as if they are equally
important
- Relies heavily on the memory, perception and judgment of the
individual doing the categorizing
What is the weighted point method? (very powerful and very flexible) - Answer✔• Buyers
specify various performance factors, which are
given more or less weight depending on there importance
• Each suppliers performance on the various factors is
graded by the buyer and used in conjunction with the
respective weights to create a composite performance
index so suppliers can be compared
• More of an objective approach and thus less susceptible to human bias
2
SCM 421 Exam Questions And Answers 2025
Update.
Why Measure Supplier Performance? - Answer✔• Uncover and remove hidden waste and cost
drivers
• Gain insight on how best to leverage the supply base
• Align customer and supplier business practices
• Improve supplier performance
What is the most strategic thing procurement does? - Answer✔select suppliers
What is sourcing? - Answer✔Selecting Suppliers
What are the common supplier evaluation criteria? - Answer✔• Financial health
• Expertise
• Operational performance metrics
• Business processes and practices
• Enabling behaviors or cultural factors
• Risk factors
What is the financial health of a supplier? - Answer✔Sales, profitability, liquidity, ROI, and debt
ratio
What is the expertise of a supplier? - Answer✔Quality and production capabilities, technical
capabilities, R&D investment
What are the operational performance metrics of a supplier? - Answer✔On-time delivery, lead
time, responsiveness, inventory
management and control, customer service
What is the business processes and practices of a supplier? - Answer✔ISO 9000 certification
1
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 10:08PM.
What are the enabling behaviors or cultural factors of a supplier? - Answer✔Qualitative factors
are also critical in supplier evaluations
What are the risk factors of a supplier? - Answer✔A supplier's risks are risks for the buyer
What are the common types of supplier evaluation systems used? - Answer✔Cost-ratio,
categorical method, weighted point method, grade method, and hurdle method
What is the cost ratio method? - Answer✔• Relates identifiable purchasing costs to the value of
the shipments received from the respective suppliers
• More of an objective approach and thus less susceptible to human bias. (Total Cost gives you
a more realistic sense cost of dealing with a supplier)
What is the categorical method? - Answer✔Buyers categorize each supplier as good (+), bad (-),
or
neutral (0) on various performance factors (e.g., cost,
quality, speed)
Advantages of the categorical method: - Answer✔- Simple and easy to implement
- Inexpensive
- Requires minimum performance data
- A non-quantitative method of keeping systematic records of performance
(very simple)
Disadvantages of the categorical method: - Answer✔Treats all categories as if they are equally
important
- Relies heavily on the memory, perception and judgment of the
individual doing the categorizing
What is the weighted point method? (very powerful and very flexible) - Answer✔• Buyers
specify various performance factors, which are
given more or less weight depending on there importance
• Each suppliers performance on the various factors is
graded by the buyer and used in conjunction with the
respective weights to create a composite performance
index so suppliers can be compared
• More of an objective approach and thus less susceptible to human bias
2
