Deck 3: Creating and Managing Supplier Relationships

Question 1

A comprehensive SRM strategy would likely include dedicated supplier managers, processes that would help in establishing standardized best practices, and the utilization of tools that would help gather and evaluate results.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

An effective supplier certification program will increase time spent on incoming inspections.

Question 5

One result of an effective supplier certification program is an increase in the supplier base.

Question 6

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

Question 7

In order to maintain a shared vision, the buyer alone should establish the objectives of the partnership, which must then be fulfilled by the actions of the supplier.

Question 8

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

Question 9

The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as TCO, which stands for total cost of ownership.

Question 10

Evaluating supplier performance can help companies identify supplier strengths and weaknesses and improve supplier communication.

Question 11

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

Question 12

Successful supplier relationships involve equal decision-making control.

Question 13

In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs.

Question 14

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

Question 15

Interpersonal relationships are not necessarily relevant to supplier relationships.

Question 16

When using a weighted-criteria evaluation system with five or more categories, vendors should be ranked based on their score in the two highest weighted categories, the others should be discarded.

Question 17

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 suppliers to follow.

Question 18

When evaluating suppliers for supplier certification, personal visits may be made to the prospective supplier to observe operations first hand.

Question 19

When evaluating a supplier it is not possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to inventory.

Question 20

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 21

Which of the following is TRUE?

A)SRM software modules are very affordable (less than $50,000) and can be implemented with a week.
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)Continuous improvement and change management are both keys to building successful partnerships.

Question 22

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

A)Developing performance metrics
B)Developing efficient processes that will remain unchanged for the duration of the partnership
C)Investigating the capabilities and core competencies of the supplier
D)Open lines of communication that both promote sharing and secure confidentiality

Question 23

The process of certifying a new supplier is considered what type of major cost category?

A)Pretransaction Cost
B)Supplier-Development Cost
C)Transaction Cost
D)Turnover Cost

Question 24

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses: Quality (0.25)
Responsiveness (0.10)
Delivery (0.20)
Cost (0.25)
Technology (0.20)
Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(90), Delivery(80), Cost(80), Technology(90).What is their total score?

A)87.0
B)85.5
C)86.0
D)86.5

Question 25

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 26

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 27

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 28

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 consumer
B)The weights for all dimensions must sum to 1
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 29

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses: Quality (0.30)
Responsiveness (0.20)
Delivery (0.20)
Cost (0.20)
Technology (0.10)
Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(80), Delivery(80), Cost(90), Technology(90).What is their total score?

A)87.0
B)85.5
C)86.0
D)84.0

Question 30

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

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

Question 31

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 32

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 performance-related results
D)Understandable, quantitative, focused on quality-related results

Question 33

Direct benefits of ISO 14000 include:

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

Question 34

The combination of the purchase price of a good and additional costs incurred before or after product delivery can be referred to as:

A)Total cost of acquisition
B)Total cost of ownership
C)Purchase requisition cost
D)Total procurement cost

Question 35

Benefits of implementing an effective supplier certification program include all or the following EXCEPT:

A)Building long-term relationships
B)Reducing time spent on incoming inspections
C)Increasing supplier base
D)Recognizing excellence

Question 36

According to the textbook, which of the following companies utilizes a supplier development program called Supplier Continuous Quality Improvement (SQDI) focused on improving the quality of the goods and services purchased and minimize the time needed to inspect incoming products?

A)Target
B)Boeing
C)Intel
D)General Motors

Question 37

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 38

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.20), Cost(0.50).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(80), Cost(80)
C)Company B: Quality(70), Delivery(90), Cost(80)
D)All companies scored the same.

Question 39

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

A)Commitment by top management
B)Interpersonal 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 40

Which third party certification was adopted by the European Union in 1992 that caused US suppliers wanting to stay competitive in European Union countries to get certified?

A)ISO 14000
B)ISO 9000
C)European Supplier Certification Initiative (ESCI '92)
D)EU Third Party Initiative

Question 41

The acronym SRM refers to:

A)Supplier Requisition Monitoring
B)Supplier Relationship Management
C)Shipment Response Monitoring
D)Supply chain Relationship Management

Question 42

The Buyer Company buys their supplies from Company X that presently has a supplier score of 85.0.They are now considering buying from Company Y.Based on supplier score should they buy from Company X or Company Y?
Use the data below to calculate this supplier's score:
Performance measure
Rating
Weight
Quality
80
0.50
Delivery
90
0.20
Cost
90
0.20
Responsiveness
95
0.10

Question 43

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 44

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

A)ISO 9000
B)ISO 14000
C)SRM
D)SCSS

Question 45

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 46

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

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

Question 47

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

Question 48

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.Internal supplier certification
d.Supplier development programs
e.Supplier recognition programs

Question 49

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.