Supplier Relationship Management Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Supplier Relationship Management flashcards as text
A supplier requests a price increase citing rising raw material costs. The buyer's best first step is to:
Answer: Request a cost breakdown and verify the claimed cost drivers with market data
Requesting a detailed cost breakdown and validating claimed cost drivers with market data ensures the price increase is justified before any agreement.
Which performance indicator measures the percentage of purchase orders fulfilled completely and on time in a single shipment?
Answer: Perfect order rate
Perfect order rate measures the percentage of orders delivered complete, on time, undamaged, and with accurate documentation in a single delivery.
In SRM, a 'preferred supplier' designation typically entitles the supplier to:
Answer: Priority consideration for new business and streamlined procurement processes
Preferred supplier status rewards consistent performance with priority consideration for new business opportunities and more efficient procurement interactions.
Which approach involves a buyer and supplier jointly investing in process improvements that reduce costs, then sharing the resulting savings?
Answer: Gain sharing
Gain sharing is a collaborative arrangement where buyer and supplier split cost savings achieved through joint process improvement efforts.
A supplier's financial health assessment reveals declining liquidity ratios over four quarters. The buyer should primarily be concerned about:
Answer: The risk of supply disruption due to potential supplier insolvency
Declining liquidity signals increasing insolvency risk, which could disrupt supply continuity and require the buyer to find alternative sources on short notice.
Which SRM practice involves embedding a buyer's representative at a supplier's facility to improve communication and coordination?
Answer: Supplier co-location or resident engineer program
Co-location or resident engineer programs place a buyer's representative on-site at the supplier to facilitate real-time communication, problem-solving, and collaboration.
When measuring supplier sustainability performance, which standard provides a globally recognized framework for environmental management systems?
Answer: ISO 14001
ISO 14001 is the international standard for environmental management systems, providing a framework for suppliers to manage environmental impacts.