CIM CIM Procurement & Purchasing Management 2 — Questions and Answers
Question 1: Vendor qualification in procurement involves:
- Training suppliers on the buyer's internal systems
- Evaluating and approving suppliers against capability and reliability criteria (Correct answer)
- Negotiating lower prices with existing vendors
- Ranking vendors by fastest average delivery speed
Correct answer: Evaluating and approving suppliers against capability and reliability criteria
Vendor qualification is a formal assessment process that verifies a supplier meets defined standards for quality, financial stability, capacity, and delivery before they enter the approved supplier list.
Question 2: A 'three-way match' in accounts payable verifies that:
- Three quotes from different suppliers are compared
- The purchase order, receiving report, and supplier invoice all agree (Correct answer)
- Three inventory costing methods produce the same result
- Three authorized approvers have signed off on a purchase
Correct answer: The purchase order, receiving report, and supplier invoice all agree
The three-way match compares the PO, goods receipt, and vendor invoice to confirm quantities and prices are consistent before releasing payment.
Question 3: What is 'maverick spending' in a procurement context?
- High-volume purchasing to maximize volume discounts
- Unauthorized purchases made outside established procurement processes (Correct answer)
- Emergency purchases requiring expedited board approval
- Purchasing from overseas suppliers to reduce unit costs
Correct answer: Unauthorized purchases made outside established procurement processes
Maverick spending occurs when employees bypass approved procurement channels or use non-contracted suppliers, resulting in higher costs and compliance failures.
Question 4: Which document does a supplier send to confirm acceptance of a buyer's purchase order?
- Commercial invoice
- Packing slip
- Order acknowledgment (Correct answer)
- Bill of lading
Correct answer: Order acknowledgment
An order acknowledgment is the supplier's formal response confirming they have received, reviewed, and accepted the terms of the buyer's purchase order.
Question 5: A supplier scorecard is used primarily to:
- Record supplier banking and contact details
- Systematically evaluate supplier performance on KPIs like quality, delivery, and cost (Correct answer)
- Calculate supplier payment terms and discount schedules
- Rank products by their contribution margin
Correct answer: Systematically evaluate supplier performance on KPIs like quality, delivery, and cost
A supplier scorecard tracks and quantifies supplier performance against agreed metrics, enabling fact-based reviews, corrective action, and sourcing decisions.
Question 6: Just-in-time (JIT) purchasing is designed to:
- Purchase large quantities in advance to secure lower unit prices
- Receive materials only when needed for production to minimize inventory (Correct answer)
- Purchase items ahead of anticipated price increases
- Maintain maximum buffer stock at all stocking locations
Correct answer: Receive materials only when needed for production to minimize inventory
JIT purchasing synchronizes material receipts with production schedules to eliminate excess on-hand inventory and reduce carrying costs.
CIM CIM Procurement & Purchasing Management 2
Vendor qualification in procurement involves: