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

The buyer and the supplier must agree on how to equitably divide or share the costs and benefits from the supplier development project.

Which of the following is a disadvantage of a cost-based supplier evaluation system?​

If a/an _____ currency is utilized, the _____ bears the currency risk and is likely to build in additional contingency costs to cover its unknown risk.

The _____ supplier evaluation system seeks to quantify the total cost of doing business with a given supplier, as the lowest purchase price may not always result in the lowest total cost for an item or service.

Supplier performance measurement differs somewhat from the process used to initially evaluate and select a supplier as it is a continuous process as opposed to a unique, one-time event.

Which of the following is a disadvantage of a categorical supplier evaluation system?

A large supply base means the duplication of a wide range of supply management activities, adding to acquisition cost without a corresponding increase in value added.

_____ in a supply base consists of such factors as: country stability, regional stability, party and governmental stability, levels of corruption, differences in contract law and intellectual property rights, elections, military actions, civil disturbances, terrorism, trade balance issues, trade wars, and duties and tariffs.

A buyer should delay reporting a supplier's poor performance until the next annual performance review.

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

The remaining suppliers in a rationalized and optimized supply base are seldom capable of performing additional tasks or providing other products and services that add value to the buyer-supplier relationship.

In supplier measurement, the basic logic of the _____ is built around the calculation of a/an _____.

All of the following are advantages of a categorical supplier evaluation system except _____.

The _____ requires suppliers to successfully navigate a successive series of performance milestones in order to remain in the supply base.

Maintaining multiple suppliers for each item can actually increase the probability and level of supply base risk.

The elimination of both marginal and small-purchase-volume suppliers is usually the last phase of the rationalization process.

During the early phases of supply base rationalization and optimization, the process usually results in an absolute reduction in the total number of suppliers.

Buyers cannot move too aggressively when rationalizing the supply base.

Few international shipments of merchandise require insurance coverage.

In an absence of competition situation, a supplier may hold the buyer hostage by unduly raising prices without justification or becoming too complacent, particularly when there are higher switching costs.