CSCP Sourcing and Supplier Management 4 — Questions and Answers
Question 1: A company wants to reduce its supplier base from 300 to 50 vendors. This strategy is known as:
- Supply base rationalization (Correct answer)
- Vertical integration
- Category management
- Demand aggregation
Correct answer: Supply base rationalization
Supply base rationalization is the deliberate reduction in the number of active suppliers to achieve better pricing, quality, and relationship depth.
Question 2: Which metric best measures a supplier's ability to fulfill orders at the correct quantity and specification without requiring a return?
- Perfect order fulfillment rate (Correct answer)
- On-time delivery rate
- Fill rate
- Defects per million opportunities
Correct answer: Perfect order fulfillment rate
Perfect order fulfillment captures on-time, complete, damage-free, and correctly documented delivery in a single composite metric.
Question 3: What distinguishes a Request for Proposal (RFP) from a Request for Quotation (RFQ)?
- An RFP solicits technical approach and solution details, while an RFQ seeks a specific price for defined specifications (Correct answer)
- An RFQ is used for services and an RFP is used for goods only
- An RFP is legally binding immediately upon submission
- An RFQ requires supplier site visits before award
Correct answer: An RFP solicits technical approach and solution details, while an RFQ seeks a specific price for defined specifications
An RFP is appropriate when the buyer wants suppliers to propose how they would meet requirements; an RFQ is used when specs are fully defined and only price is needed.
Question 4: Which practice involves a buyer sharing point-of-sale data with a supplier so the supplier can manage replenishment autonomously?
- Vendor-managed inventory (VMI) (Correct answer)
- Consignment stocking
- Kanban replenishment
- Collaborative planning, forecasting, and replenishment (CPFR)
Correct answer: Vendor-managed inventory (VMI)
In VMI, the supplier uses the buyer's sales data to determine when and how much to replenish, shifting inventory management responsibility upstream.
Question 5: A procurement manager is evaluating whether to make or buy a sub-assembly. Which factor most strongly supports an outsource decision?
- The component is non-core and an external supplier has superior scale and expertise (Correct answer)
- The component contains proprietary technology critical to competitive advantage
- Internal capacity is fully utilized on higher-margin products only marginally
- The supplier's quality record is unknown
Correct answer: The component is non-core and an external supplier has superior scale and expertise
Non-core activities where suppliers have scale advantages are prime outsourcing candidates, freeing internal resources for strategic competencies.
Question 6: In a supply chain context, what is the primary goal of supplier segmentation?
- To allocate management attention and resources proportionally to supplier strategic importance (Correct answer)
- To ensure all suppliers receive identical contract terms
- To reduce the total number of suppliers to a single source per category
- To standardize payment terms across the entire vendor base
Correct answer: To allocate management attention and resources proportionally to supplier strategic importance
Supplier segmentation tailors the level of relationship management, collaboration, and resources to each supplier tier based on risk and strategic value.
Question 7: Which negotiation strategy seeks a mutually beneficial outcome by addressing both parties' underlying interests rather than fixed positions?
- Principled negotiation (integrative bargaining) (Correct answer)
- Distributive bargaining
- Competitive bidding
- Anchoring strategy
Correct answer: Principled negotiation (integrative bargaining)
Principled or integrative negotiation focuses on interests and expanding the value of the deal for both sides rather than splitting a fixed pie.
CSCP Sourcing and Supplier Management 4
A company wants to reduce its supplier base from 300 to 50 vendors.
This strategy is known as: