CPPB Supplier Relationship Management 1 — Questions and Answers
Question 1: What is the primary goal of Supplier Relationship Management (SRM) in public procurement?
- To maximize competitive tension on every purchase
- To build collaborative partnerships that deliver continuous value and performance (Correct answer)
- To reduce the number of approved vendors on the list
- To transfer all contract risk to the supplier
Correct answer: To build collaborative partnerships that deliver continuous value and performance
SRM focuses on developing strategic, collaborative partnerships with key suppliers to achieve ongoing improvements in cost, quality, and service delivery.
Question 2: Which tool is most commonly used to segment suppliers in public procurement SRM programs?
- A spend analysis matrix
- A supplier risk register
- A Kraljic portfolio matrix (Correct answer)
- A vendor scorecard
Correct answer: A Kraljic portfolio matrix
The Kraljic matrix classifies suppliers by supply risk and profit impact, helping agencies decide which relationships warrant strategic investment.
Question 3: A public buyer conducts quarterly business reviews (QBRs) with a strategic supplier. What is the primary purpose of these reviews?
- To renegotiate pricing at every meeting
- To fulfill audit requirements mandated by state law
- To align performance data, address issues, and jointly plan improvements (Correct answer)
- To document complaints for future contract termination proceedings
Correct answer: To align performance data, address issues, and jointly plan improvements
QBRs create a structured forum for sharing performance metrics, resolving problems early, and collaborating on continuous improvement initiatives.
Question 4: Which metric best measures a supplier's on-time delivery performance?
- Spend under management percentage
- On-Time In-Full (OTIF) rate (Correct answer)
- Supplier diversity spend ratio
- Total cost of ownership index
Correct answer: On-Time In-Full (OTIF) rate
OTIF measures the percentage of orders delivered on time and in full, directly capturing delivery reliability.
Question 5: When a sole-source supplier consistently underperforms, what should the public buyer do FIRST?
- Immediately terminate the contract for default
- Issue a cure notice and allow the supplier time to correct the deficiency (Correct answer)
- Waive performance requirements to avoid supply disruption
- Increase payments to incentivize better performance
Correct answer: Issue a cure notice and allow the supplier time to correct the deficiency
A cure notice formally notifies the contractor of the deficiency and provides a reasonable time to remedy it before more drastic actions are taken.
Question 6: What does 'supplier development' mean in the context of public procurement SRM?
- Creating a new RFP to replace an existing supplier
- Investing resources to improve a supplier's capabilities so they can better meet agency needs (Correct answer)
- Expanding the approved vendor list with new entrants
- Transferring intellectual property to the supplier
Correct answer: Investing resources to improve a supplier's capabilities so they can better meet agency needs
Supplier development involves the buyer actively working with a supplier—through training, technical assistance, or joint projects—to improve their performance or capabilities.
CPPB Supplier Relationship Management 1
What is the primary goal of Supplier Relationship Management (SRM) in public procurement?