CPP Supplier Evaluation & Selection 3 ā Questions and Answers
Question 1: What is the purpose of a supplier pre-qualification process?
- To finalize contract terms before RFP issuance
- To screen potential vendors against minimum capability and compliance thresholds before solicitation (Correct answer)
- To calculate the total cost of ownership for each vendor
- To assign preferred supplier status based on historical spend
Correct answer: To screen potential vendors against minimum capability and compliance thresholds before solicitation
Pre-qualification filters out suppliers who cannot meet baseline requirements, ensuring the RFP is sent only to capable and compliant vendors.
Question 2: Which metric BEST measures a supplier's on-time delivery performance?
- Fill rate percentage
- On-Time-In-Full (OTIF) rate (Correct answer)
- Inventory turnover ratio
- Defects per million opportunities (DPMO)
Correct answer: On-Time-In-Full (OTIF) rate
OTIF (On-Time-In-Full) captures both timing and completeness of deliveries, making it the most comprehensive delivery performance metric.
Question 3: During a site visit, a buyer observes excessive work-in-progress inventory and disorganized storage. These observations MOST likely indicate:
- High supplier capacity utilization
- Process inefficiencies that could affect quality and lead times (Correct answer)
- A lean manufacturing environment
- Strong demand for the supplier's products
Correct answer: Process inefficiencies that could affect quality and lead times
Excessive WIP and poor organization are symptoms of poor process control, which can lead to quality escapes and unpredictable lead times.
Question 4: A buyer wants to evaluate the true cost of sourcing from an offshore supplier. Which analytical approach captures freight, duties, and carrying costs beyond unit price?
- Landed cost analysis (Correct answer)
- Benchmarking study
- Activity-based costing
- Economic order quantity model
Correct answer: Landed cost analysis
Landed cost analysis aggregates unit price with transportation, tariffs, insurance, and inventory carrying costs to reveal the total delivered cost.
Question 5: Which of the following BEST describes 'supplier development'?
- The process of adding new suppliers to the approved vendor list
- Collaborative efforts to improve a supplier's capabilities and performance (Correct answer)
- Negotiating lower prices with existing suppliers
- Auditing suppliers for regulatory compliance
Correct answer: Collaborative efforts to improve a supplier's capabilities and performance
Supplier development involves the buying organization investing resourcesātraining, technical support, joint kaizen eventsāto improve a strategic supplier's performance.
Question 6: When using a request for information (RFI), the primary objective is to:
- Obtain binding price commitments from the market
- Gather market intelligence and supplier capabilities before issuing an RFP (Correct answer)
- Qualify suppliers for government contracts
- Establish long-term pricing agreements
Correct answer: Gather market intelligence and supplier capabilities before issuing an RFP
An RFI is a non-binding tool used to collect information about supplier capabilities, technologies, and market conditions prior to a formal solicitation.
Question 7: A supplier's defect rate consistently falls just below the contract's penalty threshold. This pattern MOST likely signals:
- Excellent quality management practices
- Gaming the SLA metrics rather than improving root-cause quality (Correct answer)
- Statistical variation within acceptable control limits
- An overly stringent contractual threshold
Correct answer: Gaming the SLA metrics rather than improving root-cause quality
Consistently hovering just below a penalty threshold suggests the supplier is managing to the metric rather than driving genuine quality improvement.
CPP Supplier Evaluation & Selection 3
What is the purpose of a supplier pre-qualification process?