SCM 421 EXAM QUESTIONS WITH CORRECT
ANSWERS
Why |Measure |Supplier |Performance? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-select |suppliers
What |is |sourcing? |- |CORRECT |ANSWER✔✔-Selecting |Suppliers
What |are |the |common |supplier |evaluation |criteria? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-Sales, |profitability, |
liquidity, |ROI, |and |debt |ratio
What |is |the |expertise |of |a |supplier? |- |CORRECT |ANSWER✔✔-Quality |and |production |
capabilities, |technical |capabilities, |R&D |investment
,What |are |the |operational |performance |metrics |of |a |supplier? |- |CORRECT |ANSWER✔✔-On-
time |delivery, |lead |time, |responsiveness, |inventory
management |and |control, |customer |service
What |is |the |business |processes |and |practices |of |a |supplier? |- |CORRECT |ANSWER✔✔-ISO |9000 |
certification
What |are |the |enabling |behaviors |or |cultural |factors |of |a |supplier? |- |CORRECT |ANSWER✔✔-
Qualitative |factors |are |also |critical |in |supplier |evaluations
What |are |the |risk |factors |of |a |supplier? |- |CORRECT |ANSWER✔✔-A |supplier's |risks |are |risks |for |
the |buyer
What |are |the |common |types |of |supplier |evaluation |systems |used? |- |CORRECT |ANSWER✔✔-
Cost-ratio, |categorical |method, |weighted |point |method, |grade |method, |and |hurdle |method
What |is |the |cost |ratio |method? |- |CORRECT |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? |- |CORRECT |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: |- |CORRECT |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: |- |CORRECT |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) |- |CORRECT |
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
• |Probably |the |most |commonly |used |evaluation |method
What |is |the |grade |method? |- |CORRECT |ANSWER✔✔-• |Suppliers |receive |grades |for |certain |
attributes |then |get |a |"report |card" |on |how |well |they |are |doing |compared |to |other |suppliers
- |Common |attributes |include: |quality, |price, |and |delivery
What |is |the |hurdle |method? |- |CORRECT |ANSWER✔✔-• |Suppliers |are |required |to |"jump" |over |
higher |and |higher |hurdles |to |win |the |buyer's |business
- |Often |used |to |reduce |the |number |of |suppliers |a |firm |uses |because |the |"hurdle" |can |be |
raised |until |there |are |only |a |few |suppliers |left
ANSWERS
Why |Measure |Supplier |Performance? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-select |suppliers
What |is |sourcing? |- |CORRECT |ANSWER✔✔-Selecting |Suppliers
What |are |the |common |supplier |evaluation |criteria? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-Sales, |profitability, |
liquidity, |ROI, |and |debt |ratio
What |is |the |expertise |of |a |supplier? |- |CORRECT |ANSWER✔✔-Quality |and |production |
capabilities, |technical |capabilities, |R&D |investment
,What |are |the |operational |performance |metrics |of |a |supplier? |- |CORRECT |ANSWER✔✔-On-
time |delivery, |lead |time, |responsiveness, |inventory
management |and |control, |customer |service
What |is |the |business |processes |and |practices |of |a |supplier? |- |CORRECT |ANSWER✔✔-ISO |9000 |
certification
What |are |the |enabling |behaviors |or |cultural |factors |of |a |supplier? |- |CORRECT |ANSWER✔✔-
Qualitative |factors |are |also |critical |in |supplier |evaluations
What |are |the |risk |factors |of |a |supplier? |- |CORRECT |ANSWER✔✔-A |supplier's |risks |are |risks |for |
the |buyer
What |are |the |common |types |of |supplier |evaluation |systems |used? |- |CORRECT |ANSWER✔✔-
Cost-ratio, |categorical |method, |weighted |point |method, |grade |method, |and |hurdle |method
What |is |the |cost |ratio |method? |- |CORRECT |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? |- |CORRECT |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: |- |CORRECT |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: |- |CORRECT |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) |- |CORRECT |
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
• |Probably |the |most |commonly |used |evaluation |method
What |is |the |grade |method? |- |CORRECT |ANSWER✔✔-• |Suppliers |receive |grades |for |certain |
attributes |then |get |a |"report |card" |on |how |well |they |are |doing |compared |to |other |suppliers
- |Common |attributes |include: |quality, |price, |and |delivery
What |is |the |hurdle |method? |- |CORRECT |ANSWER✔✔-• |Suppliers |are |required |to |"jump" |over |
higher |and |higher |hurdles |to |win |the |buyer's |business
- |Often |used |to |reduce |the |number |of |suppliers |a |firm |uses |because |the |"hurdle" |can |be |
raised |until |there |are |only |a |few |suppliers |left
