CPSM Supplier Relationship Management 2

Question 1

The concept of 'supplier segmentation' in SRM is BEST defined as:

Accepted Answer

Categorizing suppliers by spend, criticality, and strategic value to tailor engagement

Answer

Splitting purchase orders across multiple suppliers to reduce risk

Answer

Grouping suppliers by geographic region for logistics efficiency

Answer

Ranking suppliers solely by their price competitiveness

Question 2

A Total Cost of Ownership (TCO) analysis in supplier evaluation includes:

Accepted Answer

Purchase price plus acquisition, ownership, and post-ownership costs

Answer

Only the purchase price of goods or services

Answer

Only defect-related rework and warranty costs

Answer

Transportation and tariff costs only

Question 3

Which communication approach is MOST effective for managing strategic supplier relationships?

Accepted Answer

Regular structured reviews at multiple organizational levels combined with informal dialogue

Answer

Limiting communication to formal written correspondence only

Answer

Communicating only when performance issues arise

Answer

Delegating all communication to the accounts payable team

Question 4

A Supplier Business Review (SBR) is typically conducted:

Accepted Answer

On a scheduled periodic basis (quarterly or annually) to review performance and align on strategy

Answer

Only at contract expiration

Answer

Whenever a supplier submits an invoice dispute

Answer

Once during the supplier onboarding process

Question 5

When a buyer shares its demand forecasts and production schedules with a supplier, this practice is BEST known as:

Accepted Answer

Supply chain visibility and information sharing

Answer

Reverse auctioning

Answer

Open-book accounting

Answer

Consignment stocking

Question 6

In supplier risk management, 'single sourcing' creates vulnerability primarily because:

Accepted Answer

A disruption at one supplier has no alternative to mitigate supply continuity

Answer

Single-source suppliers always charge higher prices

Answer

Single-source contracts violate most procurement policies

Answer

It limits access to diverse supplier pools

Question 7

Which of the following is an example of a supplier incentive used in SRM to drive continuous improvement?

Accepted Answer

Offering preferred supplier status and increased volume awards for hitting improvement targets

Answer

Imposing penalty clauses for every minor deviation

Answer

Reducing payment terms to 90 days to motivate faster delivery

Answer

Mandating suppliers use the buyer's proprietary technology at the supplier's expense