Deck 8: Supplier Selection and Evaluation

Question 1

The use of outsourcing has quickly become _____________ for an increasing number of businesses.

A) necessary
B) a major strength
C) an advantage
D) a competitive weapon
E) a way of operating

Answer 1

D

Question 2

uyers should be experts ___________ and in specific _____________.

A) in the company / technologies
B) in manufacturing processes / technologies
C) on material and parts / manufacturing procedures
D) on the industry / raw materials or component parts
E) in engineering / design techniques

Answer 2

D

Question 3

Outsourcing can _______________ for a firm that would normally produce a part internally.

A) provide a competitive advantage
B) reduce costs
C) improve productivity
D) improve gross margins
E) produce many benefits

Answer 3

E

Question 4

________________ relationships are those in which each organization (buying and supplying) is so focused on getting what is best for it that each puts the other at a disadvantage.______________ buyer-supplier relationships ________ recommended.

A) Competitive / Competitive / are
B) Collaborative / Collaborative / are not
C) Counterproductive / Counterproductive / are not
D) Counter-collaborative / Counter-collaborative / are
E) Cooperative / Cooperative / are not

Question 5

Traditional purchasing professionals who act as little more than order placers are giving way to __________ involved ___________ managers who control vital inputs to the production process.

A) strategically / analytical
B) highly / participative
C) strategically/ general
D) highly / general
E) highly/ operations

Question 6

The buying firm must be highly skilled at ____________________________.

A) specifying product attributes
B) forecasting expected requirements
C) ensuring the right quality at a reasonable price
D) all the above
E) "A" and "C" only

Question 7

When a firm has answered the make-or-buy question with a decision to buy, the question then becomes __________________ this responsibility.

A) to whom to delegate
B) to whom to assign
C) who can handle
D) who is best suited for
E) who is qualified for

Question 8

The _____________________ process is based on the idea of efficient resource coordination and teamwork.

A) re-supply management
B) supply chain management
C) wholesale chain management
D) supply chain assistance
E) strategic chain management

Question 9

The following are key mistakes in the make-versus-buy decision:
In most cases, businesses are not proficient at identifying their core capabilities. Buyers usually rationalize in-house decisions based on capacity capabilities.uying organizations wait too late to assess the value of consultants or strategic partners.uyers do not recognize that the product or service is approaching maturity.There are always new competitors with new technology attacking the market.

Question 10

It is no easy task for management to decide to __________________ component parts and services.

A) make
B) lease
C) buy
D) all of the above
E) "A" and "C" only

Question 11

The following are considered key success factors in the make-versus-buy decision:
Perform a realistic assessment of the capabilities and expertise of each member of the in-house team. If the core competencies exist, what happens if a key member leaves the team? Can the member be easily replaced?valuate alternative strategic partnership arrangements and select the appropriate partner.Share information with only the necessary functional areas and request their input.

Question 12

The advantages associated with implementing the ________________ evaluation program are that it can be implemented almost immediately and is the least expensive of the three evaluation systems discussed in the textbook.

A) process-based
B) procedure-based
C) categorical
D) circular-ratio
E) performance

Question 13

uying firms select _____________ based on their capabilities, and not purely on the competitive process.

A) employees
B) materials
C) the workforce
D) managers and supervisors
E) suppliers

Question 14

Searching for the appropriate supplier for a specific material or component part is becoming _________________.

A) a difficult task
B) a strategic issue in itself
C) more difficult as time goes by
D) a major purchasing issue
E) easier with experience

Question 15

uyer and supplier relationships have become increasingly important for a number of reasons. All of the following reasons are correct with one exception. Which one is incorrect?

A) In some market segments, it is estimated that 40 percent or more of total product revenue often passes directly to suppliers as payment for materials, profits, and shipment.
B) This significant transfer of value downstream emphasizes the importance and significance of supply chain relationship management.
C) With the decreasing number of suppliers used by buying firms, it is more important than ever to maintain strong buyer-supplier relationships.
D) There is a trend toward specialization away from manufacturing an entire product and to more contract manufacturing and purchasing.
E) For any buying organization to stay competitive in today's aggressive market sectors, it is essential that they maintain strong relationships with their best contract manufacturers and suppliers.

Question 16

One model that explains supply chain relationship management includes which of the following behavioral dimensions?

A) counterproductive (lose-lose) / competitive (win-lose)
B) counter-cooperative (lose-win) / counter-collaborative (win-lose)
C) collaborative (win-win) relationships / cooperative (win-win)
D) All of the above
E) "A" and "C" only

Question 17

ach business unit and department should have a clear understanding of the ________ of the whole firm and have a departmental _________ that complements and aids the overall __________ execution of the firm.

A) goals / plan / strategy
B) strategy / plan / goal
C) strategy / strategy / strategy
D) strategy / plan / strategy
E) plan / plan / strategy

Question 18

In today's competitive environment, progressive firms must be able to produce quality products at reasonable prices. Product quality is a direct result of the _______________ and the ___________.

A) management / workforce
B) engineers / designers
C) production workforce / suppliers
D) production department / operations division
E) employees / machinery

Question 19

In order for good communication to exist between buyer and supplier, common ground should exist in all of the following areas with one exception. Which is the exception?

A) management styles
B) control systems
C) quality philosophies
D) computer systems
E) technological abilities

Question 20

_____________ gives a firm more control over the part in question. However, the greater the percentage of internal parts an assembly firm produces, the greater their need to have ___________ in each of the areas involved.

A) Horizontal integration / competence
B) Vertical integration / competence
C) Vertical integration / good people
D) Horizontal integration / diversity
E) Vertical integration / diversity

Question 21

Relationships with strategic suppliers need to be closely managed. One way to keep up on supplier relationships is for a __________ organization is to compile ___________ for each strategic __________.

A) supplier / buyer profiles / partner
B) manufacturing / supplier standards / partner
C) buying / supplier profiles / partner
D) buying / supplier profiles / supplier
E) partner / buyer profiles / supplier

Question 22

In addition to the strategic _________ profiles, the buying firm should clearly establish expectations for the strategic _________ and discuss future product and _______ development plans; this is typically done with an annual review period.

A) buyer / buyers / buyer's
B) partner / partners / partner's
C) buyer / suppliers / partner's
D) supplier / suppliers / supplier
E) supplier / buyers / partner's

Question 23

performance review is a set of expectations and measurements for controlling long-term relationships with existing strategic suppliers.

Question 24

Much debate has taken place concerning the number of suppliers a firm should use.One side of the debate is the _____________ side. This involves the use of two or more suppliers.The other side of the debate is the ____________ policy, in which only one supplier is used to supply a particular part.

A) multiple-sources / single-source
B) matrix-sources / hybrid-source
C) metroplex / single-source
D) tri-source / mono-source
E) multi-source / mono-source

Question 25

The main arguments for __________ sourcing are competition and assured supply.

A) matrix
B) multi
C) mono
D) multiple
E) metro

Question 26

The advantages of multiple sourcing can be viewed as the disadvantages of single sourcing and vice versa. The best scenario would be one that can obtain the advantages of both.This might be done by applying significant pressure to single-source suppliers or by providing significant certainty to suppliers in a multiple-sourcing environment.This may be accomplished through the use of contract length. Short-term contracts regardless of single or multiple suppliers can be used as a source of punishment. In some instances, long-term contracts can be viewed as a reward.

Question 27

_______________ and ______________ are necessary in order to keep costs down and create trust with strategic suppliers.

A) Quality circles / just-in-time delivery
B) Regular meetings / continuous two way communications
C) Cost reduction / continuous process improvement
D) Management by objectives / two way communication
E) Staff awareness / regular quality meetings

Question 28

The ____________ method's major disadvantage is its dependence on the judgment of its users. The system is largely dependent on the memories of personnel to explain what "unsatisfactory" or "good" means. With this method, there is no concrete supporting data.

A) performance
B) process
C) categorical
D) circular-ratio
E) categorical-ratio

Question 29

The buying firm should have various review categories that are used in order to fully assess their strategic suppliers. Quantity is a very important review category. Customer service should be expected to be good and timely.

Question 30

The most important attributes (of customer service) should be:
high quality and
on-time delivery.

Question 31

________ approach can be used that is known as ____________. With this method, the supplier base is expanded without increasing the actual number of suppliers.

A) multi / multiple-sourcing
B) matrix / cross-sourcing
C) hybrid / mono-sourcing
D) solo / single-sourcing
E) hybrid / cross-sourcing

Question 32

"Grade" methods are those that are based on a score or grade given to the supplier by the buyer for some attribute. The most common attributes are ______________________.

A) cost, reliability, and delivery
B) quantity, quality, and reliability
C) quality, price, and delivery
D) quality, price, and terms
E) effectiveness, cost, and terms

Question 33

Single sourcing advocates may want to address the following issues regarding long-term impacts of single sourcing. In the long-run, if everyone reduces their supplier base, there will be fewer suppliers to deal with and overall competition will decrease as there are fewer suppliers. A supplier consolidation will give suppliers less power in the long run.

Question 34

.The ___________ method evaluates supplier performance by using standard cost analysis.

A) price-cost ratio
B) cost-ratio
C) performance
D) process
E) categorical

Question 35

Supplier ______________ are very useful tools to evaluate the quality capabilities of a supplier.

A) certification programs
B) negotiations
C) evaluations
D) bargaining programs
E) review programs

Question 36

___________ of the process by the supply manager/purchasing department makes certain that there is only one source of strategic ____________ for the entire firm. This method also ensures that the purchasing department is knowledgeable about all strategic _________ and aware of how they are rated by each function.

A) Management / seller profiles / partners
B) Ownership / supplier profiles / suppliers
C) Ownership / buying standards / suppliers
D) Management / supplier standards / suppliers
E) Ownership / supplier standards / partners

Question 37

The certification criteria can be changed and updated as recertification may be required. Thus, the "hurdle" can be lowered until there are a few suppliers left. In combination with certification are the price and productivity hurdles. OEMs can add these criteria to make it easier to be a "select" supplier.

Question 38

very strategic supplier also should have formal environmental, health, operational, and safety programs. In addition, they should put forth the effort to reduce, reuse, and recycle when possible. These categories, as well as others, should be used in the development of the questionnaire for each supplier.

Question 39

The second group of methods used to reduce the number of suppliers a firm uses is what the textbook refers to as the _________ methods.

A) "matrix"
B) "hurdle"
C) "saddle"
D) "barrier"
E) "effectiveness"

Question 40

The __________ method is probably the most commonly used evaluation method.

A) cost averaging
B) categorical
C) performance
D) process
E) linear averaging

Question 41

Performance-based evaluations assess the company at the time its product or service has been delivered.

Question 42

Many large __________ firms are implementing supplier relationship management programs in their business ________ to ensure that they maintain their competitive edge.

A) supplying / goals
B) buying / strategies
C) supplying / plans
D) supplying / strategies
E) buying / plans

Question 43

The process of supplier categorization is important for a number of reasons. This process forces the buying organization to communicate cross-functionally to develop some system for ranking the suppliers. Two main items that are considered in the categorization process are: * the __________ of the contract with an individual supplier and
* the __________________ to the buying firm's business strategy.

A) length / performance
B) cost / just-in-time delivery
C) dollar amount / competitiveness
D) dollar amount / critically of the supplier
E) dates / critically of the contract

Question 44

___________ suppliers are those that are important to the buying firm, but alternative suppliers could be found with some effort.

A) Standard
B) Strategic
C) Cooperative
D) Competitive
E) Preferred

Question 45

ollaboration or collaborative relationships, usually found with the buying firm's strategic/tier-______ suppliers, include the ___________ component that is missing in a cooperative relationship.

A) three / team
B) one / team
C) two / communication
D) one / communication
E) five / team

Question 46

____________ relationships recognize the potential value of both organizations getting what they want and maximize the potential of having a long-term relationship.

A) Competitive
B) Collaborative
C) Counterproductive
D) Cooperative
E) Counter-cooperative

Question 47

Once the system is developed, it then forces the various functions in the buying firm to evaluate which suppliers truly add value. The rankings are aggregated to enable a ranking of all suppliers. The company will then categorize the suppliers into one of three categories:

A) standard, preferred, or cooperative.
B) standard, competitive, or preferred.
C) strategic, preferred, or. transactional.
D) preferred, critical, or transactional.
E) strategic, competitive edge, or standard.

Question 48

_________________________ relationships are those relationships in which both buying and supplying firms strive to get the very best arrangement possible in their negotiations and fail to see the benefits of both organizations obtaining their goals and objectives.

A) Transactional or cooperative
B) Transnational or competitive
C) Transferal or collaborative
D) Transferal or competitive
E) Transactional or competitive

Question 49

In collaboration, the two organizations truly realize the benefits of working together to optimize outcomes for both organizations. The two firms work together to develop a ___________ to deliver a high-quality product or service on time and under budget.

A) process
B) program
C) strategy
D) plan
E) goal

Question 50

There are two main categories of supplier evaluations, ___________________.

A) specification-based evaluations and quality-based evaluations
B) procedure-based evaluations and quality-based evaluations
C) process-based evaluations and quality-based evaluations
D) quality-based evaluations and performance-based evaluations
E) process-based evaluations and performance-based evaluations

Question 51

or the buying firm manager, specific communication strategies should be designed into their ______ efforts. The program should be formalized with rou?tine communication; incorporate supplier training, education and site visits to add in the learning process; and provide opportunities for feedback to clarify program objectives and improvement suggestions.

A) SOP
B) MOD
C) POS
D) SDP
E) PODS

Question 52

__________ relationships are commonly found within a buying organization's preferred/tier-____ service providers and suppliers list.

A) Collaborative / three
B) Competitive / four
C) Counterproductive / two
D) Cooperative / two
E) Counter-cooperative / two

Question 53

___________ suppliers are those that can be easily replaced in a short time.

A) Standard
B) Transactional
C) Preferred
D) Cooperative
E) Common

Question 54

___________________, one type of supplier development program (SDP), are an attempt to meet current and future business needs by improving supplier performance and capabilities.

A) Supplier training
B) Supplier evaluations
C) Supplier workshops
D) Supplier seminars
E) Supplier discussions

Question 55

When designing a certification program, careful attention should be paid to the selection of criteria. Good certification should include all of the following issues with one exception. Which is the exception?

A) quality assurance
B) financial health of the supplier
C) production scheduling methods
D) price ratio analysis abilities
E) cost accounting methods

Question 56

lthough it is a strong relationship, a cooperative alliance lacks the ___________ that is needed between the various buying and supplying firms in order to optimize the benefits for all of the members of the supply chain.

A) teamwork
B) resources
C) communication
D) cooperation
E) commitment

Question 57

______________ relationship is almost required with transactional/tier-_______ suppliers and assumes that the buying firm can lower prices to help keep its competitive edge in the market.

A) collaborative / two
B) competitive / three
C) cooperative / three
D) competitive / five
E) counterproductive / four

Question 58

When a supplier _________ to conform to the buying firm's expectations, the buying firm manager must __________________________.

A) is unable / determine the most appropriate action to resolve the issue
B) refuses / find a replacement supplier
C) is reluctant / meet with the supplier to seek a solution
D) fails / replace the supplier
E) continues / reward the supplier for good performance

Question 59

___________ suppliers are those that are most important to the buying firm. They supply the buying firm with essential materials and capabilities that are not easily replaced.

A) Standard
B) Preferred
C) Strategic
D) Competitive
E) Collaborative

Question 60

This type of relationship (counterproductive) is undesirable because:
* it does not promote a positive rapport between buying and supplying firms involved and
* neither organization achieves its goals.

Question 61

The _________ evaluation is an assessment of the supplier's production or service process. ______________ evaluations are based on objective measures of performance.

A) process-based / Performance-based
B) performance-based / Process-based
C) procedure-based / Quality-based
D) process-based / Quality-based
E) quality-based / Performance-based

Question 62

In general, the guiding factors in determining which system is best are ____________ and _______________ of the system.

A) quality / cost
B) quality / cost of implementation
C) ease of implementation / cost of implementation
D) reliability / cost
E) ease of implementation / overall reliability

Question 63

In addition, large buying organizations increasingly are demanding that their suppliers become certified through third-party organizations, such as ____________ certification or _______________ National Quality Awards.

A) ISO 0900 / Malcolm Jones
B) UFO 1000 / Mayfield
C) POS 2001 / Malcolm Baldrige
D) ISO 9000 / Malcolm Baldrige
E) ISO 9000 / Mae Baldrige

Question 64

The three general types of supplier evaluation systems in use today are the _________________________.

A) categorical method, the price-ratio method, and the circular averaging method
B) categorical method, the cost-ratio method, and the linear averaging method
C) circular method, the cost-ratio method, and the linear averaging method
D) cost-ratio method, the gross margin method, and the linear averaging method
E) categorical-ratio method, the quality-ratio method, and the linear averaging method

Question 65

The __________ method involves categorizing each supplier's performance in specific areas defined by a list of relevant performance variables.

A) performance-based
B) process-based
C) circular-ratio based
D) categorical-ratio based
E) categorical