APP Supplier Evaluation & Performance Management 3

Question 1

A Corrective Action Plan (CAP) in supplier management is typically initiated when:

Accepted Answer

A supplier consistently fails to meet established performance standards

Answer

A new supplier is added to the approved vendor list

Answer

Annual contract renewals are being processed

Answer

A supplier requests a price increase

Question 2

Which supplier evaluation method provides the most direct verification of a supplier's actual operational capabilities?

Accepted Answer

On-site facility audit

Answer

Reference checks from other buyers

Answer

Review of submitted financial statements

Answer

Analysis of the supplier's quoted pricing structure

Question 3

In quality management, PPM stands for:

Accepted Answer

Parts Per Million

Answer

Purchase Price Management

Answer

Procurement Process Metrics

Answer

Product Performance Monitoring

Question 4

When a company relies on a single supplier for a critical component, the primary risk is:

Accepted Answer

Increased supply chain vulnerability if that supplier experiences disruption

Answer

Reduced pricing negotiation leverage

Answer

Difficulty scheduling supplier performance audits

Answer

Higher transaction processing and administrative costs

Question 5

Benchmarking in supplier evaluation is used primarily to:

Accepted Answer

Compare a supplier's performance against industry standards or best-in-class performers

Answer

Set minimum order quantities for each supplier

Answer

Calculate the average lead time across all active suppliers

Answer

Determine the optimal number of suppliers for each spend category

Question 6

'Supplier rationalization' refers to the strategic process of:

Accepted Answer

Reducing the supply base to a smaller number of preferred suppliers for improved efficiency and leverage

Answer

Explaining purchasing decisions to senior management

Answer

Evaluating suppliers using a rational, structured scoring model

Answer

Setting reasonable payment terms for supplier invoices

Question 7

A spider chart (radar chart) is used in supplier performance management to:

Accepted Answer

Visualize a supplier's performance across multiple dimensions simultaneously

Answer

Track the renewal timeline for all active supplier contracts

Answer

Map the geographic locations of suppliers in the supply chain

Answer

Calculate weighted average scores from competitive bids