Deck 12: Supplier Selection

Question 1

Best results from supplier visits come from:

A)developing,in advance,a general outline of the kinds of information sought.
B)gathering,in advance,all reasonably available information,both general and specific,about the company.
C)preparing a detailed report of the findings after the visit.
D)developing,in advance,a general outline of the kinds of information sought;and gathering,in advance,all reasonably available information,both general and specific,about the company.
E)developing,in advance,a general outline of the kinds of information sought;gathering,in advance,all reasonably available information,both general and specific,about the company;and preparing a detailed report of the findings after the visit.

Answer 1

E

Question 2

Supplier development initiatives may be focused on (1)persuading an existing supplier to expand into new areas that meet the needs of the buying organization,and (2)locating a new,untried/unknown company and identifying potential areas of business.

Answer 2

True

Question 3

A request for information (RFI)signals that the buyer has identified the supplier as the source of supply and represents a commitment for future business.

Answer 3

False

Question 4

Portfolio or quadrant analysis may be used to develop longer-term strategies for moving categories of spend into a more desirable location on the spend map.

Question 5

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

A)item substitution and switching are difficult,but many available suppliers can meet the technical or capacity needs.
B)item substitution and supplier switching are possible,and several sources of supply are readily available.
C)item substitution and supplier switching are difficult because few suppliers are available with the capability to meet the unique specification requirements.
D)substitution is possible,but switching suppliers is difficult even though many suppliers are available.
E)substitution and supplier switching are relatively easy,but few suppliers have the technical expertise.

Question 6

The preferred hierarchy of environmental supply chain strategies is:

A)(1)reuse, (2)recycle, (3)source reduction, (4)incinerate,and (5)landfill.
B)(1)source reduction, (2)reuse, (3)recycle, (4)incinerate,and (5)landfill.
C)(1)recycle, (2)reuse, (3)source reduction, (4)incinerate,and (5)landfill.
D)(1)reuse, (2)reclaim, (3)recycle, (4)incinerate,and (5)landfill.
E)(1)reclaim, (2)reuse, (3)recycle, (4)incinerate,and (5)landfill.

Question 7

Large suppliers:

A)tend to have a strong financial base.
B)are most suited for small dollar value "C" requirements.
C)should not be considered for longer term contracts.
D)usually provide the greatest responsiveness and flexibility.
E)usually represent very high risk to the purchaser.

Question 8

If the decision has been made that a new requirement cannot be made in-house and no existing supplier is adequate,then:

A)one option exists: search the marketplace for an untried/unknown,new supplier.
B)two options exist: search the marketplace for a new supplier or convince an existing supplier to develop the capability.
C)three options exist: search the marketplace for a new supplier,engage in reverse marketing,or redesign/respecify the requirement so that it is procurable.
D)three options exist: search the marketplace for a new supplier,convince an existing supplier to develop the capability,or engage in reverse marketing.
E)three options exist: search the marketplace for a new supplier,convince an existing supplier to develop the capability,or inform the internal user the item cannot be purchased.

Question 9

The supplier selection decision:

A)should always be preceded by a formal supplier evaluation and rating.
B)should be based on quantifiable factors such as price and delivery,and ignore social and environmental issues.
C)can be depicted by a decision tree identifying options,evaluation criteria,and probabilities of success and failure.
D)can be seen as a decision-making process undertaken in an environment of certainty.
E)is based on a uniform set of weighted criteria that can be applied to every purchase.

Question 10

Distributors,wholesalers,and retailers:

A)may provide valuable services and a better price than the manufacturer.
B)typically cannot deliver at a lower cost than the manufacturer.
C)typically carry a very limited supply in an effort to keep inventory costs low.
D)have an indefensible value proposition in the typical modern supply chain.
E)never add enough value to a buyer to make it worth doing business with them.

Question 11

Assurance of supply is an argument that favors single sourcing.

Question 12

Arguments that favor single sourcing include:

A)the order is small.
B)to obtain greater flexibility.
C)deliveries are easier to schedule and are most cost efficient.
D)the order is small and to obtain greater flexibility.
E)the order is small,and deliveries are easier to schedule and are most cost efficient.

Question 13

Which of the following statements supports multiple sourcing:

A)an ongoing long-term contract exists with a preferred supplier.
B)supply is plentiful and supply assurance is important.
C)there is a patent involved.
D)the order is small.
E)concerns exist about supplier capacity for future volume.

Question 14

A request for quotation (RFQ):

A)signals the purchaser has identified a supplier as a potential source of supply and asks for information.
B)asks the supplier to declare at what price and what terms they are prepared to supply.
C)permits the supplier to fit the specifications for supply to its strengths.
D)signals the purchaser has identified a supplier as a potential source of supply and asks for information,and asks the supplier to declare at what price and what terms they are prepared to supply.
E)asks the supplier to declare at what price and what terms they are prepared to supply and permits the supplier to fit the specifications for supply to its strengths.

Question 15

A strategic purchase is mission critical,meaning that it may help or hinder attainment of the supply department's strategic goals and objectives.

Question 16

The ability to extend the advantages of local sourcing to offshore suppliers is primarily due to:

A)better educated supply managers making supply decisions.
B)transformations in communication and transportation.
C)greater openness to global trade on the part of economically developing countries.
D)end customer pressure to do business globally.
E)greater diversity in legal frameworks around the world.

Question 17

Buyers' perceptions of risk in supplier selection decisions:

A)are generally the same for A,B,and C items.
B)are generally the same for strategic and non-strategic items.
C)are generally the same for new and current suppliers of the same items.
D)vary depending on the level of customization of product or service.
E)vary depending on the level of data available in each case.

Question 18

Reverse marketing is:

A)when the buying organization has decided to stop making something in-house and identifies a supplier from its existing supply base.
B)when the supply department sells internal users on a specific supplier that the user was opposed to initially.
C)when the marketing department tries to convince the supply department to stop buying from a specific supplier.
D)an aggressive,purchaser-initiated approach to finding and developing world class suppliers.
E)an aggressive,marketing-initiated approach to finding and developing world class suppliers.

Question 19

SA8000 certification is for:

A)quality management.
B)logistics management.
C)social sustainability.
D)environmental sustainability.
E)management of innovation.

Question 20

The traditional supplier evaluation criteria are:

A)quality,quantity,delivery,price and service.
B)quality,quantity,delivery,price and sustainability.
C)price and quality.
D)price,quality and delivery.
E)price,quality,delivery and sustainability.

Question 21

In the context of supplier selection decisions,the term "local" can be defined differently depending on the organization and its scope of operations.

Question 22

Historically,the advantages of global sourcing were more dependable service,greater flexibility,and detailed knowledge of the buyer's specific requirements.

Question 23

Near shoring refers to outsourcing to a contract manufacturer who is located near a coast with a major port facility.

Question 24

The practice of buying directly from manufacturers and bypassing distributors is referred to as disintermediation.

Question 25

Most large organizations use formal supplier codes of conduct to set social sustainability standards and expectations for their suppliers.

Question 26

The use of just-in-time,stockless buying or systems contracting favors the use of multiple sourcing.

Question 27

A request for proposal (RFP)allows more latitude to the supplier than an RFQ to fit the proposal to its strengths.

Question 28

When using a request for quotation (RFQ)or request for bid (RFB),the assumption is that specifications are nonstandard and difficult to describe.

Question 29

The buyer's assessment of the risk associated with a supplier is influenced by whether it is a noncritical,leverage,bottleneck,or strategic purchase.

Question 30

Environmental sustainability in supply chain management includes product and process issues that affect human safety and welfare,community development,and protection from harm.