Chap 7 Quiz

11/11/2020 Test: Ch.
7 Supplier Evaluation and Selection | Quizlet
NAME
38 Multiple choice questions
1. cost or price, quality, delivery

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A. Overall objective of evaluation and selection process is to reduce _______
B. Need to select supplier for short or long term?
C. High strategic importance to buyer & high capability of suppliers ______
D. 3 primary criteria in evaluating potential suppliers ____
2. -capability
-variety of products offered
-locations
-capacity
Share of supplier's capacity

a. <1% (buyer not important to the supplier)
b. 1-15%
c. >15% (the supplier too dependent on the buyer)
A. Large vs small suppliers
B. Manufacturer vs. distribution
C. Prerequisites to bidding
D. Single vs multiple sourcing
3. 1. management capability
2. employee capabilities
3. cost structure
4. total quality performance, systems, and philosophy
5. process and technological capability
6. sustainability and environmental compliance
7. financial stability
8. production scheduling and control systems
9. e-commerce capability
10. supplier's sourcing strategies, policies, and techniques
11. longer-term relationship potential
A. Conditions demanding negotiation
B. Evaluating potential suppliers
C. Identify Potential Sources (step 4 )
D. Activity Ratios
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11/11/2020 Test: Ch.7 Supplier Evaluation and Selection | Quizlet
4. 1. item is new or technically complex, with only vague specifications

2. impossible to estimate costs with a high degree of certainty
3. price is not the only important variable
4. buyer requires suppliers to participate in development effort
A. Evaluating potential suppliers
B. Steps in developing a supplier evaluation and selection survey
C. Selection and Evaluation Process (7 Steps)
D. Conditions demanding negotiation
5. The selection of bidding or negotiation should be decided by using objective criteria, a total cost perspective and sound
supply management logic
A. Manufacturer vs. distribution
B. Bidding vs Negotiation
C. Single vs multiple sourcing
D. Large vs small suppliers
6. Major
A. High strategic importance to buyer & high capability of suppliers ______
B. High strategic importance to buyer & low capability of suppliers _____
C. Need to select supplier for short or long term?
D. Low strategic importance to buyer & high capability of suppliers ______
7. -During new product

-due to poor existing
supplier performance
-at end of existing contract
-buying new equipment
-receiving internal user requisitions
A. Supplier evaluation and selection (step 1)
B. Selection and Evaluation Process (7 Steps)
C. Identify key sourcing requirements (step 2)
D. Identify Potential Sources (step 4 )
8. Request for Proposal: sometimes based on a prior RFI; a business requirements-based request for specific solutions to the
sourcing problem
A. RFP
B. Debt Ratio
C. RFQ
D. RFI
9. Minor to moderate
A. High strategic importance to buyer & low capability of suppliers _____
B. Low strategic importance to buyer & high capability of suppliers ______
C. Overall objective of evaluation and selection process is to reduce _______
D. Low strategic importance to buyer & low capability of suppliers ____
10. 1. recognize need for supplier selection

2. identify key sourcing requirements
3. determine sourcing strategy
4. identify potential supply sources
5. Limit suppliers in selection pool
6. determine method of supplier evaluation and selection
7. select supplier and reach agreement
A. Selection and Evaluation Process (7 Steps)
B. Reducing supplier evaluation and selection cycle time
C. Identify key sourcing requirements (step 2)
D. Conditions demanding negotiation
11. 1. dollar value must be large

2. specifications must be clear
3. market must consist of an adequate number of sellers
4. sellers must be qualified and want the contract
5. price is usually dominant criterion
A. Identify Potential Sources (step 4 )
B. Profitability ratios
C. Conditions demanding negotiation
D. Prerequisites to bidding
12. 1. be comprehensive and include important performance categories

2. be as objective as possible
3. include items and measurement scales that are reliable
4. be flexible (performance and weights should be adjustable)
5.be mathematically straightforward and simple to understand
A. Activity Ratios
B. Survey should
C. Debt Ratio
D. Selection and Evaluation Process (7 Steps)
13. Current Ratio: should be >1

Quick Ratio: at least 0.8 if supplier sells on credit
A. Activity Ratios
C. Liquidity Ratios
D. Debt Ratio
14. 60%-80%
A. 3. Good
B. 4. Excellent
C. 2. Fair
D. 1. Poor
15. 1. evaluation of supplier-provided information

-supplier survey
-RFI, RFP or RFQ: detailed cost breakdown of the quoted price is often requested
2. supplier visits
-team of cross-functional experts may visit potential suppliers
-provides the most complete way to ensure an accurate assessment of the supplier
3. use of preferred suppliers
-simplify supplier evaluation and selection process
4. external or third-party information
A. Evaluating potential suppliers
B. Determine methods of Supplier Evaluation and selection
C. Selection and Evaluation Process (7 Steps)
D. Reducing supplier evaluation and selection cycle time
16. 1.determined by internal and external customers

-supplier quality
-cost
-delivery performance
2.vary widely from item to item
A. Selection and Evaluation Process (7 Steps)
B. Conditions demanding negotiation
D. Identify key sourcing requirements (step 2)
17. Supplier evaluation often follows a rigorous, structured approach using formal surveys
A. Reducing supplier evaluation and selection cycle time
B. Supplier evaluation and selection (step 1)
C. Developing a supplier evaluation and selection survey
D. Identify key sourcing requirements (step 2)
18. Minor
A. Low strategic importance to buyer & low capability of suppliers ____
B. Is there a "one best way" for evaluation and selection process?
C. Low strategic importance to buyer & high capability of suppliers ______
D. High strategic importance to buyer & low capability of suppliers _____
19. -overall trend to rationalize supply base

-leverage vs. assurance of supply
A. Manufacturer vs. distribution
B. Large vs small suppliers
C. Single vs multiple sourcing
D. Bidding vs Negotiation
20. 1. debt to equity: >3 means highly leveraged

2. current debt to equity: too high means supplier may be unable to pays its bill
3. interest coverage: should be >3; low means difficulty in paying creditors
A. Debt Ratio
C. Liquidity Ratios
D. Survey should
21. - new organizational design features

- preferred supplier list
- electronic tools
- predefined contract language and shorter contracts
-map current evaluation and selection process
-integrate with internal customers
-utilize data warehouse with supplier information
-engage third-party support
A. Steps in developing a supplier evaluation and selection survey
B. Developing a supplier evaluation and selection survey
C. Reducing supplier evaluation and selection cycle time
D. Evaluating potential suppliers
22. Request for quotation: an opportunity for potential suppliers to competitively cost the final chosen solution
A. RFP
B. RFI
C. RFQ
D. Debt Ratio
23. sourcing risk and maximize value to buyer
A. Low strategic importance to buyer & low capability of suppliers ____
B. 3 primary criteria in evaluating potential suppliers ____
C. Need to select supplier for short or long term?
D. Overall objective of evaluation and selection process is to reduce _______
24. True
A. Is there a "one best way" for evaluation and selection process?
B. High strategic importance to buyer & high capability of suppliers ______
C. T/F
Those 3 elements of performance are generally most obvious and most critical areas that affect purchaser
25. -single vs multiple sourcing

-smaller vs large supplier
-manufacturer or distributor
-short-term vs long-term contracts
-need for design support
-full service vs non-full-service suppliers
-collaboration vs arm's length relationship
A. Identify Potential Sources (step 4 )
B. Determine methods of Supplier Evaluation and selection
C. Conditions demanding negotiation
D. Determine sourcing strategy (step 3)
26. -How well existing suppliers can satisfy cost, quality, and/or other performance variables
-Strategic importance of purchase requirement
-technical complexity of purchase requirements
A. Identify key sourcing requirements (step 2)
D. Supplier evaluation and selection (step 1)
27. 1. identify supplier evaluation categories

2. assign a weight to each evaluation category
3. identify and weigh subcategories
4. define scoring system for categories and subcategories
5. evaluate supplier directly
6. review evaluation results and make selection decision
7. review and improve supplier performance continuously
A. Steps in developing a supplier evaluation and selection survey
C. Determine methods of Supplier Evaluation and selection
D. Reducing supplier evaluation and selection cycle time
28. 1. inventory turnover: low means slow inventory or CF problems

2. Fixed asset turnover: too low means supplier may be inefficient using its fixed assets
3. total asset turnover: too low means supplier may be inefficient using its total asset
4. Days sales outstanding: too high hurt CF; too low shows restrictive credit policy
A. Liquidity Ratios
C. Activity Ratios
D. Debt Ratio
29. <60%
A. 1. Poor
B. Discovery
C. 4. Excellent
T/F
D. The buying company needs to select one or more suppliers from the list of suppliers it evaluated
30. False
For CRITICAL items needing an in-depth analysis of the suppliers capabilities, a more detailed supplier evaluation study is
required
A. 3 primary criteria in evaluating potential suppliers ____
B. For non-critical items needing an in-depth analysis of the suppliers capabilities, a more detailed supplier evaluation study
is required
D. Supplier evaluation and selection (step 1)
31. Request for information: an open enquiry that spans the market seeking broad data and understanding
A. RFP
B. RFI
C. Debt Ratio
D. RFQ
32. 1. net profit margin: represents after-tax return

2. return on asset: represents the return earned on what company owns
3. return on equity: represents return on shareholder investment
A. Prerequisites to bidding
B. Debt Ratio
C. Activity Ratios
D. Profitability ratios
33. Long term
A. Low strategic importance to buyer & high capability of suppliers ______
B. High strategic importance to buyer & low capability of suppliers _____
C. Low strategic importance to buyer & low capability of suppliers ____
D. Need to select supplier for short or long term?
34. -size of purchase

-manufacturer's policies on direct sales
-storage space available at the purchaser's facility
-extent of services required
A. Supplier evaluation and selection (step 1)
B. Single vs multiple sourcing
C. Manufacturer vs. distribution
D. Bidding vs Negotiation
35. - current suppliers

- sales representatives
- information databases
- experience
- professional organizations
- trades journals
- trade directories
- trade shows
- second-party or indirect information
- internet sources
- internet searches
A. Discovery
C. Prerequisites to bidding
D. Identify Potential Sources (step 4 )
36. No
A. Is there a "one best way" for evaluation and selection process?
T/F
B. Those 3 elements of performance are generally most obvious and most critical areas that affect purchaser
C. Low strategic importance to buyer & high capability of suppliers ______
37. >95%
T/F
A. The buying company needs to select one or more suppliers from the list of suppliers it evaluated
B. Survey should
C. 4. Excellent
D. 3. Good
38. 80%-95%
A. 4. Excellent
B. 2. Fair
C. 3. Good
D. 1. Poor
11/11/2020 Test: Chapter 7 - Supplier Evaluation and Selection | Quizlet
NAME
1. International and national suppliers may be able to offer the best price and superior technical service. Alternatively,
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local suppliers are more responsive to the buying firm's changing needs and can economically make frequent smaller
deliveries. The popularity of just-in-time (JIT) and quick-replenishment systems favor using more local suppliers. Local suppliers
also allow the buying firm to build a degree of community goodwill through enhancing local economic activity. International
suppliers provide opportunities to attain dramatic price savings. These savings must be evaluated against the additional
inventory, communication, and logistics costs
A. Use of preferred Certified and partnered Suppliers
B. recognize need to go after new suppliers
C. Local or National or International Suppliers
D. International Suppliers and Countertrade
2. three primary criteria: (1) cost or price, (2) quality, and (3) delivery. These three elements of performance are generally the most
obvious and most critical areas that affect the purchaser. For critical items needing an in-depth analysis of the supplier's
capabilities, a more detailed supplier evaluation study is required.
A. Key Supplier evaluation Criteria
B. Supplier Evaluation and Selection Process
C. Limit Suppliers in Selection Pool
D. Supplier-Provided Information
3. Step 1: Identify Supplier evaluation Categories

Step 2: assign a Weight to each evaluation Category
Step 3: Identify and Weigh Subcategories
Step 4: Define a Scoring System for Categories and Subcategories
Step 5: evaluate Supplier Directly
Step 6: review evaluation results and Make Selection Decision
Step 7: review and Improve Supplier performance Continuously
A. Categorizing Suppliers for Multiple or Single or Sole Sourcing
B. reducing Supplier evaluation and Selection Cycle time
C. Developing a Supplier evaluation and Selection Survey
D. Evaluation of Supplier-Provided Information
4. Dun & Bradstreet's D&B's Supplier Qualifier Report provides purchasers with a web-based tool to help evaluate suppliers and
potential suppliers according to risk, financial stability, and business performance. In the apparel industry several buyers are
using third-party certification sources. Information can be a timely and effective way to gain insight into potential suppliers. For
example, PVH, a German retailer and parent company of Tommy Hilfiger and Calvin Klein called for independent inspections of
buildings to insure safety.
A. Identify potential Supply Sources
B. Third-Party Information
C. Other evaluation criteria
D. Competitors as suppliers
5. Most purchasers are attempting to diversify their supply base by increasing purchases from traditionally disadvantaged
suppliers. These include minority, female, veteran, or handicapped owned businesses. Several organizations are available to
assist the buyer in finding and certifying diverse sources.
A. Large or Small Suppliers
B. Sustainability and Diversity Objectives
C. recognize need to go after new suppliers
D. Supplier Evaluation and Selection Process
6. a purchasing manager might begin the supplier evaluation process in anticipation of a future purchase requirement. Purchasing
may have early insight into new-product development plans through participation on a product development team.
A. Supplier Evaluation and Selection Process
B. Sustainability and Diversity Objectives
D. recognize need to go after new suppliers
7. A purchaser may decide to select suppliers over which it has a relative size advantage. A buyer may simply have greater
influence when it has a relative size advantage over the supplier or represents a larger share of the supplier's total business.
Some buyers track the annual dollar amount of their purchases divided by the supplier's total sales revenue, and this is a factor
in source selection. One firm expects this ratio to be less than or equal to 40 percent.
Alternatively, when a buyer is only a small part of a supplier's business, he/she may get less attention.
A. Risk/Reward Issues
B. Supplier Visits
C. Size Relationship
D. Large or Small Suppliers
8. The decision to select an international supplier can have important implications during the supplier evaluation and selection
process. For one, international sourcing is generally more complex than domestic buying. As a result, the evaluation and
selection process can take on added complexity. It may be difficult to implement JIT with international suppliers, as lead times
are frequently twice or even three times as long as lead times for domestic suppliers. Generally, higher levels of inventories will
be required when selecting an offshore supplier.
Countertrade requirements appear in many international sales contracts. Counter- trade requires the purchaser to source
goods in that country as a condition for selling in that country. Boeing, a producer of commercial aircraft, purchases a portion
of its production requirements in markets where it hopes to do business. An organization involved in extensive worldwide
marketing may have to contend with countertrade requirements before it can sell to international customers, which can have a
direct impact on the supplier evaluation and selection process.
A. Evaluation of Supplier-Provided Information
B. Identify potential Supply Sources
C. Evaluation of Supplier Performance
D. International Suppliers and Countertrade
9. (1) size relationships;

(2) risk/reward issues;
(3) sustainability and diversity objectives;
(4) competitors as suppliers; and
(5) offshore suppliers & countertrade.
A. Evaluate Critical Issues
B. Financial risk management
C. Benefits of single sourcing
D. disqualified suppliers
10. (1) improved assurance of supply;

(2) a check against price increases;
(3) active competition that motivates the suppliers to perform effectively.
A. Benefits of Multiple Sourcing
B. Select Supplier and reach agreement
C. Manufacturer vs Distributor
D. Benefits of single sourcing
11. The choice of buying directly versus from a distributor is usually based on four criteria: (1) the size of the purchase; (2) the
manufacturer's policies regarding direct sales; (3) the storage space available at the purchaser's facility; and (4) the extent of
services required.
Economically speaking, if all else is equal, the lowest unit price will be available from the OEM. The distributor buys from the
OEM and resells, therefore incurring a transaction cost, and it must make a profit. Despite the exchange cost, recent trends
have in- creased the role of distributors in providing the purchaser a low-cost solution. First, many OEMs cannot handle, or
choose not to handle, the large volume of transactions required to sell directly. Second, buyers are requiring more services
from their suppliers and distributors have stepped in to fill this need. Supplier Managed Inventory is a program that distributors
market to manage their customer's inventory for them. Several organizations are using integrated supply where a distributor is
awarded a longer-term contract. Integrated suppliers are given access to the purchaser's demand data and are expected to
maintain certain levels of inventory and customer service on the contracted items.
A. International Suppliers and Countertrade
B. Manufacturer vs Distributor
C. Select Supplier and reach agreement
D. Identify potential Supply Sources
12. Another important issue is the degree to which a buyer is willing to purchase directly from a competitor. Purchasing from
competitors may limit information sharing between the parties. The purchase transaction is usually straightforward, and the
buyer and seller may not develop a working relationship characterized by mutual commitment and confidential information
sharing.
A. Competitors as suppliers
B. Supplier-Provided Information
C. Consider Sourcing Alternatives
D. Other evaluation criteria
13. Map the Current Supplier Evaluation and Selection Process

Integrate with Internal Customers
Data Warehouse Software with Supplier Information
Third-Party Support
Integrating Technology into Organizational Design
Supplier Categorization
Electronic Tools
Predefined Contract Language and Shorter Contracts
A. reducing Supplier evaluation and Selection Cycle time
B. Supplier Evaluation and Selection Process
D. Identify Key Sourcing requirements
14. prequalified or approved supplier

preferred supplier
Certified suppliers
partnered suppliers
disqualified suppliers
After a review of the supplier categories within a specific service or product buy a decision on the optimal number of
suppliers must be made. For example, if the buying category is critical, then a partnered supplier may be chosen as a single
source. Alternatively, if the buying category contains only pre-qualified/approved suppliers, then the decision may be made to
use multiple sources. In cases where a firm's management or technical personnel specify one and only one supplier, the
purchaser is left in a sole supplier situation. Sole supplier means there are no other approved suppliers of the product or
service that the firm will accept. In this case the purchaser has little power and is often at the mercy of the supplier.
B. International Suppliers and Countertrade
D. Determine the Method of Supplier Evaluation and Selection
15. A prospective supplier may have an established performance record with a purchaser. A purchaser may have used a supplier
for a previous purchase requirement, or a supplier may currently provide material to another part of the organization. A
supplier may also have provided other types of commodities or services to the purchaser than those under consideration.
Based on prior experience, a purchasing manager may consider that supplier for a different type of commodity or service.
B. Evaluation of Supplier Performance
C. Developing Critical Supplier List
D. Evaluation of Supplier-Provided Information
16. A team of cross-functional experts may visit potential suppliers. The next section dis- cusses the criteria often used by cross-
functional teams during supplier visits. Although many sources exist to discover information about a potential supplier, visiting
the actual facility provides the most complete way to ensure an accurate assessment of the supplier
A. Supplier Visits
C. entry qualifiers
D. Risk Management
17. The final step of the evaluation and selection process is to select the supplier(s) and reach a contract agreement. The activities
associated with this step can vary widely depending on the purchase item under consideration. For routine items, this may
simply require notify- ing and awarding a basic purchase contract to a supplier. For a major purchase, the process can become
more complex. The buyer and seller may have to conduct detailed negotiations to agree upon the specific details of a
purchase agreement.
A. Select Supplier and reach agreement
B. Manufacturer vs Distributor
D. Identify potential Supply Sources
18. Many purchasers prefer to focus on "capability to do the job" regardless of size. Size does become a factor when one firm
decides to leverage its purchases from one or a few suppliers. In addition, the smaller supplier may not have the necessary
capacity to meet the buyer's total needs. Leveraging also means that the supplier must have wide variety in its product or
service offerings as well as the ability to service multiple geographic locations (in some cases worldwide locations
B. Size Relationship
C. Large or Small Suppliers
D. Sustainability and Diversity Objectives
19. limited to a select group of suppliers who provide critical high value items to the firm. Partnership does not imply a legal
relationship, but one that is built on close relationships between the buying and selling organizations and is usually viewed
from a longer- term perspective
A. preferred supplier
B. partnered suppliers
D. Large or Small Suppliers
20. This information may come from requests for quotes or requests for proposals. Increasingly, companies are also requesting that
suppliers provide a detailed cost breakdown of their quoted price in their response to a request for quote, including details on
cost composition, cost drivers, and justification of fuel surcharges or other added costs.
A. Supplier-Provided Information
B. Consider Sourcing Alternatives
C. Key Supplier evaluation Criteria
D. Competitors as suppliers
21. is the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events
before they occur or reducing the probability they will occur and making contingency plans to mitigate the consequences if
they do occur. Though risk can emanate from many places at the selection stage we will focus on two major risks :
financial and operational.
A. Risk Management
B. Risk/Reward Issues
C. entry qualifiers
D. Supplier Visits
22. consist of suppliers who no longer meet the buying organization's standards and will not be considered for future business until
their problems are corrected
A. prequalified or approved supplier
B. Evaluate Critical Issues
C. Certified suppliers
23. focuses on the continued ability of the supplier's human, intellectual and physical capital to meet the buying firm's requirements
with respect to quality and delivery.
A. Operational risk management
B. Certified suppliers
C. Evaluate Critical Issues
24. No single sourcing strategy approach will satisfy the requirements of all supply managers. Because of this, the purchasing
strategy adopted for a particular item or service will influence the approach taken during the supplier evaluation and selection
process.
Thus the supplier selection and evaluation process and the chosen strategy are very much intertwined. In developing a
sourcing strategy the purchaser must consider his/her sourcing alternatives as well as critical sourcing issues.
A. Determine the Method of Supplier Evaluation and Selection
C. Developing Critical Supplier List
D. Determine Sourcing Strategy
25. Purchasers often perform a first cut or preliminary evaluation of potential suppliers to narrow the list before con- ducting an in-
depth formal evaluation. Several criteria may support the narrowing of the supplier list.
B. Limit Suppliers in Selection Pool
C. recognize need to go after new suppliers
D. Key Supplier evaluation Criteria
26. often determined by internal and external customers within the value chain, can differ widely from item to item. Although
different requirements may exist for each evaluation, certain categories—supplier quality, cost, and delivery performance—are
usually included in the evaluation
A. Identify Key Sourcing requirements
B. Developing Critical Supplier List
C. Key Supplier evaluation Criteria
D. Evaluation of Supplier Performance
27. Buyers often request specific information directly from potential suppliers. Requests for information involve sending a
preliminary survey to suppliers. The buyer uses this information to screen each supplier and to determine if the supplier's
capabilities match the buyer's requirements. Buyers can request information on a supplier's cost structure, process technology,
market share data, quality performance, or any other area important to the purchase decision.
B. Local or National or International Suppliers
C. Evaluation of Supplier-Provided Information
D. Developing a Supplier evaluation and Selection Survey
28. is defined as the continual monitoring of the strength of suppliers' financial condition to insure their ability to meet the
purchaser's performance requirements for products or services.
A. Financial risk management
B. Operational risk management
C. preferred supplier
D. Benefits of single sourcing
29. the basic components that suppliers must possess before they proceed to the next phase of the evaluation and selection
process
Typical qualifiers include: (1) financial strength; (2) proven manufacturing or service capability; (3) capable and supportive
management; (4) adequate facilities; and a (5) skilled professional and technical staff.
A. entry qualifiers
B. Key Supplier evaluation Criteria
D. Risk Management
30. Purchasers always want to select suppliers who are profitable and growing. However, the supplier world is not created equally.
Certain suppliers who may present the lowest price may also present greater risks. For example, a small supplier with a very
competitive price/cost proposal may not have the ability to scale their business quickly enough to satisfy the purchaser's
growing requirements
A. Size Relationship
B. Competitors as suppliers
C. entry qualifiers
D. Risk/Reward Issues
31. 1. recognize need to go after new suppliers

2. Identify key sourcing requirements
3. Identify the potential supply sources
4. determine sourcing strategy
5. limit suppliers in the pool
6. determine the method of supplier evaluation and selection
7. select supplier and reach agreement
A. Identify Key Sourcing requirements
C. Supplier Evaluation and Selection Process
D. reducing Supplier evaluation and Selection Cycle time
32. • Strategic suppliers • Single suppliers • Sole suppliers • Suppliers with parts/services in many product lines or programs •
Suppliers with a high-dollar value of company owned tooling
• Suppliers with long qualification times • Suppliers with a high percentage of business with the company • Key disadvantaged
suppliers
A. Evaluation of Supplier Performance
B. Key Supplier evaluation Criteria
D. Developing Critical Supplier List
33. Management Capability

employee Capabilities
Cost structure
total Quality performance, Systems, and philosophy
process and technological Capability
Sustainability and environmental Compliance
Financial Stability
Scheduling and Control Systems
e-Commerce Capability
Supplier's Sourcing Strategies, policies, and techniques
Longer-term relationship potential
D. Third-Party Information
34. a supplier that has demonstrated its performance capabilities through previous purchase contracts and therefore receives
preference during the supplier selection process
A. partnered suppliers
B. preferred supplier
D. Certified suppliers
35. purchasers often reward their best suppliers in the preferred, certified, or partnered categories. Using these highly capable
suppliers can simplify the evaluation and selection process. A buyer can refer to the purchasing database to determine if there
is a current supplier that can satisfy the purchase requirement. This eliminates the need to perform a time-consuming evaluation.
Buyers can also use their category list of suppliers as an incentive to improve the performance of existing approved suppliers.
Only the best suppliers are awarded preferred, certified, or partnered status.
A. Determine the Method of Supplier Evaluation and Selection
C. Use of preferred Certified and partnered Suppliers
D. Limit Suppliers in Selection Pool
36. Once an initial cut has eliminated suppliers that are not capable, the buyer or commodity team must decide how to evaluate
the remaining suppliers, which may appear to be equally qualified. This requires a finer level of evaluation detail than that used
in the initial process. There are a number of ways to evaluate and select suppliers from the remaining companies in the pool.
These include evaluating supplier-provided information, conduct- ing supplier visits, and using preferred, certified or partnered
suppliers.
B. Developing a Supplier evaluation and Selection Survey
C. Determine the Method of Supplier Evaluation and Selection
D. Use of preferred Certified and partnered Suppliers
37. The degree to which a buyer must search for information or the effort put forth toward the search is a function of several
variables, including how well existing suppliers can satisfy cost, quality, or other performance variables. The strategic
importance or technical complexity of the purchase requirement also influences the intensity of the search.
Might contact:
Existing suppliers
Sales reps
Internet searches and social media
Databases (ERP systems)
Organizational knowledge
Trade journal
Trade directories
Trade shows
Second-party or indirect information
Internal sources
B. Evaluation of Supplier Performance
C. International Suppliers and Countertrade
D. Identify Key Sourcing requirements
38. has met the purchaser's initial screening and is deemed worthy of being considered for business
A. Developing Critical Supplier List
C. prequalified or approved supplier
39. have had their quality systems extensively audited by the buying firm and are capable of consistently meeting or exceeding the
buyer's quality needs
A. Certified suppliers
C. partnered suppliers
40. Once the list of potential and current suppliers is put into a database, it is further refined, considering the type of supplier a firm
may wish to deal with based on the initial sourcing strategy. Major sourcing alternatives include whether to purchase from a (1)
manufacturer or distributor; (2) local or national or international source; (3) large or small suppliers; and (4) multiple, single or
sole supplier(s) for the item, commodity, or servic
C. Competitors as suppliers
D. Determine Sourcing Strategy
41. (1) optimum leverage and power over the supplier; (2) the ability to develop closer relationships; and (3) the development of
value adding programs such as supplier stocking, process improvement and so on.
A. Evaluate Critical Issues
C. Benefits of single sourcing
D. Financial risk management
11/11/2020 Test: Chapter 7: Supplier Evaluation and Selection | Quizlet
NAME
1. the continual monitoring of the strength of suppliers' financial condition to insure their ability to meet the purchaser's
0
performance requirements for products or services
A. operational risk management
B. sustainable supply management (SSM)
C. disqualified supplier
D. financial risk management
2. the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events
before they occur or reducing the probability thy will occur and making contingency plans to mitigate the consequences if they
do occur
A. risk management
B. entry qualifiers
C. sustainability
D. integrated supply
3. where a distributor is awarded a longer-term contract. Integrated suppliers are given access to the purchaser's demand data
and are expected to maintain certain levels of inventory and customer service on the contracted items
A. integrated supply
B. certified supplier
C. preferred supplier
D. partnered supplier
4. a minor departure from an intended level of performance or a nonconformance that is easily resolved and does not materially
affect the required output
A. sole supplier
B. sustainability
C. performance problem
D. deficiency
5. consist of suppliers who no longer meet the buying organization's standards and will not be considered for future business until
their problems are corrected
A. certified supplier
B. prequalified or approved supplier
C. financial risk management
D. disqualified supplier
6. has met the purchaser's initial screening and is deemed worthy of being considered for business
A. sustainable supply management (SSM)
C. disqualified supplier
D. prequalified or approved supplier
7. a suppler who consistently satisfies the performance and service standards defined by the buyer and responds to unexpected
changes
B. partnered supplier
D. certified supplier
8. people, planet, and profit
A. partnered supplier
B. supplier managed inventory
C. triple bottom line (TBL)
9. the basic components that suppliers must possess before they proceed to the next phase of the evaluation and selection
process. Typical qualifiers include: financial strength, proven manufacturing or service capability, capable and supportive
management, adequate facilities, and a skilled professional and technical staff
A. sole supplier
B. entry qualifiers
C. risk management
D. integrated supply
10. limited to a select group of suppliers who provide critical high value items to the firm
A. partnered supplier
C. integrated supply
11. the extent to which supply management incorporates environmental, social, and economic value into the selection, evaluation,
and management of its supply base
A. operational risk management
B. financial risk management
C. sustainability
D. sustainable supply management (SSM)
12. the continued ability of the suppler's human, intellectual and physical capability to meet the buying firm's requirements with
respect to quality and delivery
A. sustainable supply management (SSM)
B. operational risk management
13. no other approved suppliers of the product or service that the firm will accept. purchase has little power and is often at the
mercy of the supplier
A. deficiency
B. sole supplier
C. sustainability
14. have had their quality systems extensively audited by the buying firm and are capable of consistently meeting or exceeding the
buyer's quality needs
A. integrated supply
C. partnered supplier
15. a discrepancy, nonconformance, or missing requirement that will have a significant negative impact on an important area of
concern in an audit statement
B. disqualified supplier
C. certified supplier
D. performance problem
16. a program that distributors market to manage their customer's inventory for them
A. performance problem
B. supplier managed inventory
C. partnered supplier
D. triple bottom line (TBL)
17. is about ensuring a better quality of life now and for generations to come, and it encompasses both social and environmental
responsibility
A. sustainability
C. sole supplier
D. deficiency

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11/11/2020 Test: Ch.

7 Supplier Evaluation and Selection | Quizlet

38 Multiple choice questions

1. cost or price, quality, delivery

B. Need to select supplier for short or long term?

C. High strategic importance to buyer & high capability of suppliers ______

D. 3 primary criteria in evaluating potential suppliers ____

Share of supplier's capacity

A. Large vs small suppliers

B. Manufacturer vs. distribution

D. Single vs multiple sourcing

A. Conditions demanding negotiation

B. Evaluating potential suppliers

C. Identify Potential Sources (step 4 )

4. 1. item is new or technically complex, with only vague specifications

A. Evaluating potential suppliers

B. Steps in developing a supplier evaluation and selection survey

C. Selection and Evaluation Process (7 Steps)

D. Conditions demanding negotiation

A. Manufacturer vs. distribution

C. Single vs multiple sourcing

D. Large vs small suppliers

A. High strategic importance to buyer & high capability of suppliers ______

B. High strategic importance to buyer & low capability of suppliers _____

C. Need to select supplier for short or long term?

D. Low strategic importance to buyer & high capability of suppliers ______

7. -During new product

A. Supplier evaluation and selection (step 1)

B. Selection and Evaluation Process (7 Steps)

C. Identify key sourcing requirements (step 2)

D. Identify Potential Sources (step 4 )

A. High strategic importance to buyer & low capability of suppliers _____

B. Low strategic importance to buyer & high capability of suppliers ______

C. Overall objective of evaluation and selection process is to reduce _______

D. Low strategic importance to buyer & low capability of suppliers ____

10. 1. recognize need for supplier selection

A. Selection and Evaluation Process (7 Steps)

B. Reducing supplier evaluation and selection cycle time

C. Identify key sourcing requirements (step 2)

D. Conditions demanding negotiation

11. 1. dollar value must be large

A. Identify Potential Sources (step 4 )

C. Conditions demanding negotiation

12. 1. be comprehensive and include important performance categories

D. Selection and Evaluation Process (7 Steps)

13. Current Ratio: should be >1

15. 1. evaluation of supplier-provided information

A. Evaluating potential suppliers

B. Determine methods of Supplier Evaluation and selection

C. Selection and Evaluation Process (7 Steps)

D. Reducing supplier evaluation and selection cycle time

16. 1.determined by internal and external customers

A. Selection and Evaluation Process (7 Steps)

B. Conditions demanding negotiation

C. Identify Potential Sources (step 4 )

D. Identify key sourcing requirements (step 2)

A. Reducing supplier evaluation and selection cycle time