CSCP Sourcing and Supplier Management Questions and Answers Flashcards

What is a key risk of a reverse auction when it is used for a strategic, highly customized component?

Answer: It may harm supplier relationships and overlook total value beyond price

Reverse auctions focus on price, which can damage collaboration on complex, strategic items.

In a make-versus-buy decision, which factor MOST strongly favors making the item in-house?

Answer: The item is a core competency or protects proprietary technology

Companies usually keep core competencies and proprietary processes in-house to protect competitive advantage.

Which statement BEST describes supplier certification?

Answer: A supplier's processes have been verified so incoming inspection can be reduced or eliminated

Certified suppliers have shown consistent quality, which lets buyers skip or reduce receiving inspection.

A company uses two suppliers for a critical part, giving each a share of the volume. What is the main benefit?

Answer: Lower supply disruption risk while keeping competitive pressure

Dual sourcing hedges against disruption at one supplier and keeps both suppliers competitive.

Under the U.S. Dodd-Frank Act, publicly traded companies must disclose their use of which materials from the Democratic Republic of the Congo region?

Answer: Conflict minerals (tin, tantalum, tungsten, and gold)

Section 1502 of Dodd-Frank requires disclosure of 3TG conflict minerals sourced from the DRC and neighboring countries.

Category management in procurement is BEST described as which of the following?

Answer: Managing groups of related purchases as business units with tailored strategies

Category management groups similar spend and builds a dedicated sourcing strategy for each category.

A buyer receives a gift of significant value from a supplier during an active bidding process. According to professional ethics guidelines, what should the buyer do?

Answer: Decline it and report it according to company policy

Accepting significant gifts during sourcing creates a conflict of interest and must be declined and disclosed.