Deck 3: Creating and Managing Supplier Relationships

Question 1

Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for other suppliers to follow.

Answer 1

True

Question 2

In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to more than 1.00 and less than 100.

Answer 2

False

Question 3

It is critical that buyers and suppliers develop stronger relationships and partnerships based on a tactical rather than a strategic perspective.

Answer 3

False

Question 4

ISO 14000 is a family of international standards for environmental management.

Question 5

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.

Question 6

Successful supplier relationships involve equal decision-making control.

Question 7

Building Trust, Shared Vision and Objectives, Personal Business Relationships, Mutual Benefits and Needs are key factors that contribute to a lasting supplier partnership.

Question 8

Unless an organization has a firm grasp of the key issues surrounding supplier relationships, it cannot reap the benefits of such relationships.

Question 9

Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception.

Question 10

The development of relationships with suppliers brings about changes that must be managed for a company to stay focused on their core businesses.

Question 11

It is illegal for corporations to provide their suppliers appreciation banquets to award performance.

Question 12

Transactional SRM, allows the company to analyze the complete supplier base.

Question 13

China, which has the largest number of ISO 9001 certificates, issued over 292,000 as of 2017, representing 28.3 percent of the total certificates issued worldwide.

Question 14

As companies outsource more and more parts, it becomes easier to achieve cost savings internally.

Question 15

A seven-step approach to supplier development might include identifying critical suppliers not meeting performance requirements.

Question 16

A SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization.

Question 17

When developing successful partnerships, it is best to avoid inter-personal business relationships between buyers and suppliers.

Question 18

According to the text, only about half of companies recognize excellent performance with supplier awards and appreciation banquets.

Question 19

If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease.

Question 20

In a Total Cost of Ownership system, certification and training of suppliers would be considered post-transaction costs.

Question 21

Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as:

A) Pre-transaction costs
B) Post-transaction costs
C) Transaction costs
D) All of these

Question 22

Costs associated with investigating alternative suppliers and investigating alternative delivery options can be classified as:

A) Pre-transaction costs
B) Post-transaction costs
C) Transaction costs
D) All of these

Question 23

The benefits of implementing an effective supplier certification program include all of the following EXCEPT:

A) Building long-term beneficial relationships
B) Increasing supplier base
C) Improving responsiveness
D) Recognizing excellence

Question 24

According to the textbook, Supplier Recognition Programs:

A) Are generally not very effective
B) Are used by 90% of companies
C) Encourage suppliers to keep their performance high
D) Are difficult to implement

Question 25

In general, European companies prefer suppliers:

A) Who employ the most people
B) Whose headquarters are in a developing county
C) Who are in the United States
D) Who have ISO 9001 certifications

Question 26

Which of the following is TRUE?

A) Performance metrics and personal business relationships are both keys to building successful partnerships.
B) ISO 75000 is the supplier award given to the highest rated supplier in Japan.
C) The key to successful partnerships is developing performance measures with weights greater than 3.50.
D) SRM software modules are very affordable (less than $50,000) and can be implemented with a week.

Question 27

According to the text, the goal of a good performance evaluation system is to provide metrics that are:

A) Understandable, easy to measure, focused on value-added results
B) Understandable, quantitative, focused of cost-related results
C) Understandable, qualitative, focused on short-term results
D) Understandable, quantitative, focused on quality-related results

Question 28

The Hormel company awards their Hormel Food Corporation's No.1 Award to their top supplier.How often do they give this award?

A) Every year
B) Every 6 months
C) Every 5 years
D) Every 10 years

Question 29

According to the SCM profile Honda ___________ based on a supplier relations index developed by Planning Perspectives.

A) Ranked lower in 2015 than 2014
B) Ranked near the bottom in 2015
C) Ranked near the top in 2015
D) Ranked fifth in 2015

Question 30

Direct benefits of ISO 14000 include:

A) Reduced defect rates
B) Improved on-time delivery rates
C) Reduction of pollution emissions
D) All of these

Question 31

Which of the following is NOT important in developing a successful strategic alliance?

A) Developing performance metrics
B) Developing cross-functional team capabilities externally and within the company
C) Developing efficient processes that will remain unchanged for the duration of the partnership
D) Open lines of communication that both promote sharing and secure confidentiality

Question 32

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses:
Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(90), Delivery(80), Cost(80), Technology(85).What is its total score?

A) 81.0
B) 82.5
C) 83.0
D) 84.5

Question 33

What type of major cost category is considered in the cost associated with placing and receiving the order?

A) Turnover Cost
B) Supplier-Development Cost
C) Transaction Cost
D) Pre-transaction Cost

Question 34

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT:

A) Personal relationships
B) Performance metrics
C) Mutual benefits and needs
D) Individualized objectives

Question 35

Which of the following is NOT a reason for supplier recognition programs?

A) To help suppliers' reputation in the marketplace
B) To select the best suppliers
C) To encourage suppliers to be more innovative
D) To reward suppliers for excellent performance

Question 36

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT:

A) Select the key dimensions of performance based on what is important to the end consumer
B) The weights for all dimensions must sum to 1 or 100%
C) Evaluate each of the performance measures on a rating between zero and one-hundred
D) Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score

Question 37

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as:

A) Quality Systems Certification
B) Supply Management
C) Supplier Inspection
D) Supplier Certification

Question 38

Which of the following is important in developing successful relationships in a partnership?

A) Commitment by top management
B) Interpersonal business relationships between employees of the companies
C) Mutual/compatible needs that result in a win-win situation for the partners
D) All of these

Question 39

According to the text, one of the most basic and successful approaches to protecting trade secrets is:

A) Threat of litigation
B) Working with law makers to increase fines and sentences for those that steal trade secrets
C) Requiring employees and vendors to sign non-disclosure agreements
D) Requiring employees and partners to get ISO 9000 certified

Question 40

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.40), Cost(0.30). The scores for each category are shown below.Which of the following companies has the highest total score?

A) Company A: Quality(90), Delivery(80), Cost(60)
B) Company C: Quality(70), Delivery(95), Cost(60)
C) Company B: Quality(70), Delivery(80), Cost(80)
D) All companies scored the same.

Question 41

Blaize Manufacturing Company is using a weighted criteria evaluation system to certify suppliers.
a.Determine the total weighted score for the supplier shown below.
b.Based on the evaluation system and weights used by this firm, what is their purchasing objective?
c.Give an example of a real company that might be using this type of strategy.
d.If Blaize Mfg.classifies their vendors based on the following scores, how well is this supplier doing?
-Unacceptable (less than 50)
-Conditional (between 50 and 70)
-Certified (between 70 and 90)
-Preferred (greater than 90)

Question 42

Summers, Inc.needs to generate a list of good/services purchased per supplier.Which type software program can the manager consult to obtain this information?

A) ISO 9000
B) MRP
C) SRM
D) SCSS

Question 43

The TCO as defined in the textbook adds "all costs associated with the acquisition, use, and maintenance of a good or service."
The TCO is then broken up into three major cost categories.List the three cost categories, provide a definition of each, and then provide two examples of each of the three types of costs.

Question 44

According to the textbook, SRM software varies based on capabilities offered.AMR research has identified 5 areas of distinction for an SRM system.Provide three of these key tenets of SRM and explain how it is used.

Question 45

Provide a list of four ways companies can motivate their suppliers to improve.

Question 46

Which of the following is NOT a key tenant of an SRM system?

A) Automation
B) Lean operations
C) Visibility
D) Integration

Question 47

What are the two external certification programs discussed in the text? What does each certification attempt to certify?

Question 48

SRM software should be capable of:

A) Automating transactional processes
B) Making information flow between partners more visible
C) Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally
D) All of these

Question 49

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders.After SRM implementation buyers spent about:

A) 10% of their time on expediting orders
B) 20% of their time on expediting orders
C) 30% of their time on expediting orders
D) None of the these

Question 50

A company using a weighted-criteria evaluation system has established these 4 categories and the appropriate weight in parentheses: Technology(0.25), Quality(0.30), Environmental (0.20), Cost(0.25).Currently they use supplier ABC that presently has a supplier score of 85.Calculate supplier XYZ's total score and decide (based on supplier score) if the company should change suppliers.
The scores for supplier XYZ are shown below for each category.

Question 51

For each of the following programs, processes, certifications, etc.explain how they can be useful in improving supplier relationships and motivating business partners to provide the best possible products and services.
a.ISO 9000
b.TCO
c.Supplier development programs
d.Supplier recognition programs

Question 52

Suppose your organization is attempting to set up a new strategic alliance with a supplier.You are considered the key manager from your organization to manage this alliance.What would be your goals for the planning stages of this proposed alliance? What would be your goals for the first few months of the alliance? What would be your long-term goals for the alliance?

Question 53

SRM software can automate procurement activities that lead to significant cost savings as purchasing professionals move toward:

A) Collaborative planning
B) Diversifying their hiring
C) Improving capacity
D) Expediting each order

Question 54

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as:

A) CRM
B) SRM
C) ISO 9000
D) SCSS