Deck 12: Supplier Selection

Question 1

In the portfolio matrix,characteristics of goods and services in the leverage quadrant are:

A)few suppliers with adequate capability so substitution and switching are difficult.
B)item substitution is possible,switching is difficult,many suppliers are available.
C)item substitution and supplier switching are possible,but few suppliers are capable.
D)competitive supply market,substitution is possible,total cost is a primary focus.
E)competitive supply market,substitution is possible,price per unit is important.

Answer 1

E

Question 2

Which of the following statements supports single sourcing:

A)there is a high probability of a devastating natural disaster.
B)concerns exist about supplier capacity for future volume.
C)there is a need to reduce dependence on a supplier.
D)the use of just-in-time production,stockless buying,or systems contracting.
E)there is volatility in the supplier market.

Answer 2

D

Question 3

A supplier's references:

A)should always be in the same industry as the buying organization.
B)should be ask closed-ended (yes-no)questions.
C)may be useful if they are of similar size and objectives as the buyer's organization.
D)are never completely trustworthy and therefore of little use.
E)are useful only to confirm factual information.

Answer 3

C

Question 4

Sustainability is:

A)the combination of environmental and social performance.
B)the ability to sustain economic prosperity through long-term relationships with key suppliers.
C)the ability to sustain long term bottom line growth with a stable supply base.
D)a supply base that meets requirements and protects the natural environment.
E)the achievement of economic prosperity for the company and its shareholders,while avoiding environmental litigation.

Question 5

Reverse marketing:

A)is when the buying organization has decided to stop making something in-house and identifies a supplier from its existing supply base.
B)is an aggressive,marketing-initiated,approach to finding and developing world class suppliers.
C)is encouraged by the rapid rate of technological change,growth in international trade,and the need to extract competitive advantage from supply chains.
D)requires that the marketing department in the buyer's organization fully understand the needs of supply.
E)is most appropriate when the product is fairly standard and available from multiple local suppliers.

Question 6

To avoid risk,a buyer can:

A)hedge in a commodities market.
B)require bid or performance bonds.
C)decide not to do business in certain countries.
D)hedge in a commodities market and require bid or performance bonds.
E)hedge in a commodities market,require bid or performance bonds and decide not to do business in certain countries.

Question 7

Decision trees:

A)may be useful in making effective supplier selection decisions the first-time a buying decision is made,but not on repetitive purchases.
B)may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option.
C)may be useful in making effective supplier selection decisions when making repetitive purchases,but not special,one-time purchases.
D)are of limited value because options can only be evaluated qualitatively,not quantitatively.
E)cannot reflect past decisions so they are useless as a decision tool when making repetitive purchases.

Question 8

Assessment of a potential supplier's financial situation:

A)is best left to the finance department which will alert supply to any issues that might adversely affect a pending deal.
B)may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations.
C)seldom relies on financial information provided by the supplier.
D)is always necessary and follows a strict protocol no matter what type of purchase or dollar value.
E)is usually unnecessary because it is highly unlikely that a supplier will go out of business,and,even if they do,it is relatively easy to replace a supplier.

Question 9

Small suppliers:

A)are most suited for large dollar value "A" requirements.
B)usually represent very low risk to the purchaser.
C)tend to have a strong financial base.
D)tend to have an extensive management structure.
E)often provide the greatest responsiveness and flexibility.

Question 10

Supply management's role in environmental sustainability is:

A)expanding because suppliers can influence the ability to achieve the goal of zero environmental impact.
B)expanding because purchasing has primary responsibility for specification writing.
C)limited because environmental issues have little impact on the acquisition cycle.
D)limited by the product design developed by design engineers.
E)limited to compliance with government laws and regulations.