CPSM Supplier Relationship Management 3

Question 1

The primary objective of a supplier audit in SRM is to:

Accepted Answer

Verify that the supplier's processes, capabilities, and compliance meet defined requirements

Answer

Renegotiate contract pricing using audit findings as leverage

Answer

Identify opportunities to terminate underperforming contracts

Answer

Satisfy internal financial reporting requirements

Question 2

In the context of SRM, 'collaborative forecasting' between buyer and supplier is designed to:

Accepted Answer

Align supply and demand planning to reduce bullwhip effects and improve forecast accuracy

Answer

Allow the supplier to set pricing based on projected demand

Answer

Give the supplier control over the buyer's inventory levels

Answer

Replace the need for safety stock entirely

Question 3

A buyer wants to measure how well a supplier is improving over time. Which type of performance target is MOST appropriate?

Accepted Answer

Continuous improvement (CI) targets that ratchet upward each performance period

Answer

Static threshold targets set once at contract signing

Answer

Minimum acceptable performance thresholds only

Answer

Targets benchmarked solely against the supplier's historical average

Question 4

Which of the following BEST describes 'gain sharing' in supplier relationships?

Accepted Answer

Both parties share financial benefits realized from jointly implemented cost reductions or innovations

Answer

The supplier shares customer data gains with the buyer

Answer

The buyer receives discounts in exchange for higher volume commitments

Answer

Suppliers share gains from market price reductions triggered by commodity indices

Question 5

Early Supplier Involvement (ESI) in new product development provides the benefit of:

Accepted Answer

Incorporating supplier expertise in design to improve manufacturability, cost, and time-to-market

Answer

Reducing the number of suppliers needed for a product

Answer

Ensuring the supplier takes full liability for product design defects

Answer

Locking in pricing before market conditions change

Question 6

A supply manager is evaluating whether to exit a supplier relationship. Which factor is LEAST relevant to this decision?

Accepted Answer

The supplier's CEO change announced in a press release

Answer

Chronic failure to meet quality or delivery targets after corrective actions

Answer

The supplier's inability to scale capacity to meet future demand

Answer

Availability of qualified alternative suppliers in the market

Question 7

Which ISM (Institute for Supply Management) principle is MOST central to ethical supplier relationship management?

Accepted Answer

Treating suppliers with fairness, transparency, and integrity throughout the relationship

Answer

Maximizing cost reductions in every negotiation regardless of supplier impact

Answer

Preferring domestic suppliers over all foreign alternatives

Answer

Maintaining strict confidentiality about all supplier performance data from the supplier itself