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

Central to the design of all supplier measurement systems is the decision about what to measure and how to weight various performance categories.

All organizations need to pursue supplier development.

Considering the cost-based supplier evaluation system, the actual cost per nonconformance event may be difficult to estimate or calculate, as many traditional cost accounting systems are not designed to identify and capture such data.

Buyers rarely rely on suppliers for cost-reduction assistance.

A single source can never deliver cost and quality improvements over the life of a contract even if a buyer manages that supplier effectively.

Buyers can minimize supply disruption risk from a single suppler by selecting a supplier with multiple production facilities.

_____ involves a detailed analysis of the supply base to ensure that only the most capable and highest performing suppliers are kept in the supply base after it is rationalized.

Direct involvement in a supplier's operations by buyer personnel is the most challenging part of any supplier development process.

The cost-based system is the most thorough and least subjective of the three supplier performance measurement systems.

Suppliers are sometimes not willing to accept outside help in the form of supplier development, either because they are too proud to accept help or because they do not see the value in improving quality or delivery performance.

Which of the following is not one of the advantages of a rationalized and optimized supply base?

Maintaining small quantities of inventory has been the traditional method of dealing with supply base risk.

The supplier performance index (SPI) always provides a complete or accurate assessment of supplier performance.

The _____ is a normalization factor for the supplier performance index (SPI) that eliminates high-dollar lot bias.

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 _____.

The _____ identifies those 20 percent of suppliers receiving the bulk of purchase spend or that minority of suppliers that causes the most quality problems.

Which of the following is not a typical supplier development activity?

All of the following are advantages of a weighted-point supplier evaluation system except _____.

A smaller supplier with limited capacity for growth may need to eliminate some existing customers to meet the increased requirements of a larger customer.

The administrative cost of maintaining 5,000 suppliers will be dramatically lower than the cost of maintaining a core group of 500 highly qualified suppliers.