CPP Supplier Evaluation & Selection 2 — Questions and Answers
Question 1: Which tool uses a weighted scoring matrix to compare suppliers across multiple criteria simultaneously?
- Pareto analysis
- Vendor scorecard (Correct answer)
- Kraljic matrix
- Total cost of ownership model
Correct answer: Vendor scorecard
A vendor scorecard applies predetermined weights to criteria such as quality, delivery, and price to produce a comparative numerical score for each supplier.
Question 2: A supplier audit reveals that a vendor's ISO 9001 certification lapsed six months ago. What is the MOST appropriate immediate action?
- Terminate the contract immediately
- Issue a corrective action request and set a recertification deadline (Correct answer)
- Reduce order volumes by 50% as a precaution
- Transfer all orders to a backup supplier without notification
Correct answer: Issue a corrective action request and set a recertification deadline
A corrective action request documents the nonconformance and establishes a timeline for the supplier to restore its certification status.
Question 3: What does 'financial stability analysis' of a supplier typically include?
- Review of the supplier's marketing budget
- Examination of current ratio, debt-to-equity, and cash flow statements (Correct answer)
- Assessment of the supplier's employee satisfaction scores
- Verification of the supplier's trade show participation
Correct answer: Examination of current ratio, debt-to-equity, and cash flow statements
Financial stability analysis examines liquidity ratios, leverage ratios, and cash flow to assess the supplier's ability to fulfill long-term obligations.
Question 4: When evaluating a sole-source supplier, which risk mitigation strategy is MOST effective?
- Increasing safety stock and qualifying an alternative supplier simultaneously (Correct answer)
- Negotiating a lower unit price to offset supply risk
- Requiring the supplier to maintain a dedicated production line
- Extending payment terms to improve supplier cash flow
Correct answer: Increasing safety stock and qualifying an alternative supplier simultaneously
Holding safety stock provides short-term buffer while qualifying an alternative supplier addresses the root cause of single-source dependency.
Question 5: The 'three bids and a buy' policy is designed primarily to ensure:
- The fastest possible procurement cycle
- Competitive pricing through market exposure (Correct answer)
- Preferred supplier relationship loyalty
- Compliance with environmental regulations
Correct answer: Competitive pricing through market exposure
Soliciting at least three competitive bids ensures the buying organization obtains market-rate pricing and demonstrates due diligence.
Question 6: Which supplier evaluation criterion addresses a vendor's ability to scale production in response to demand surges?
- Technical capability
- Financial stability
- Capacity and flexibility (Correct answer)
- Geographic proximity
Correct answer: Capacity and flexibility
Capacity and flexibility evaluates whether a supplier can increase output volumes and adjust scheduling to meet the buyer's peak or variable demand.
Question 7: A cross-functional sourcing team includes engineering, quality, and finance representatives. What is the PRIMARY benefit of this structure?
- It reduces the number of suppliers in the approved vendor list
- It ensures decisions reflect multiple organizational perspectives and requirements (Correct answer)
- It accelerates contract negotiations by distributing tasks
- It limits procurement staff involvement to administrative functions
Correct answer: It ensures decisions reflect multiple organizational perspectives and requirements
Cross-functional teams integrate technical, quality, and financial expertise so that supplier selection decisions satisfy the full range of organizational needs.
CPP Supplier Evaluation & Selection 2
Which tool uses a weighted scoring matrix to compare suppliers across multiple criteria simultaneously?