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.

Accepted Answer

A comprehensive SRM strategy would indeed include dedicated supplier managers, processes for standardized best practices, and tools to gather and evaluate results.

Question 2

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

Accepted Answer

As companies outsource more parts, they may lose control over quality, experience communication barriers, and face higher transportation costs. This can lead to increased internal costs in terms of managing the outsourcing relationships and ensuring quality. Therefore, outsourcing may not always lead to cost savings internally.

Question 3

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

Accepted Answer

When a company is focusing on its core competencies, it is likely to outsource non-core activities to third-party vendors in order to free up resources to focus on strategic activities.

Question 4

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

Accepted Answer

An effective supplier certification program should actually decrease the time spent on incoming inspections, as there should be more confidence in the quality and consistency of the supplier's products.

Question 5

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

Accepted Answer

An effective supplier certification program will ensure that suppliers meet certain standards and requirements, resulting in a decrease in the supplier base but an increase in the quality and reliability of the remaining suppliers.

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.

Accepted Answer

Developing relationships with suppliers often involves changes in procurement processes, inventory management, and communication channels. These changes need to be managed carefully to ensure that they align with the company's core business objectives and do not cause disruption or inefficiencies.

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.

Accepted Answer

Maintaining a shared vision requires collaboration and communication between both the buyer and the supplier. Both parties should establish and agree on the objectives of the partnership, and work together to fulfill these objectives. It cannot be solely the responsibility of the buyer to establish objectives and expect the supplier to fulfill them without input or buy-in from 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.

Accepted Answer

In a weighted-criteria evaluation system, the weights of all the performance dimensions must add up to exactly 1.00 (or 100%) to ensure that the total weight reflects the entire evaluation proportionately.

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.

Accepted Answer

This statement accurately defines TCO (total cost of ownership).

Question 10

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

Accepted Answer

Evaluating supplier performance can provide insights into areas where suppliers may need improvement or where they excel. This information can be used to strengthen communication and collaboration between the company and their suppliers, leading to better outcomes for both parties.

Question 11

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

Accepted Answer

ISO 14000 is a family of international standards for environmental management. It provides practical tools for organizations looking to identify and control their environmental impact and constantly improve their performance.

Question 12

Successful supplier relationships involve equal decision-making control.

Accepted Answer

The answer of 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.

Accepted Answer

Post-transaction costs refer to the costs incurred after the sale of a product, including repair and warranty costs associated with defective products. These costs are considered in a TCO (Total Cost of Ownership) system to calculate the true cost of a product over its entire life cycle.

Question 14

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

Accepted Answer

In a Total Cost of Ownership (TCO) system, certification and training of suppliers are considered pre-transaction costs, as they occur before the actual purchase or transaction.

Question 15

Interpersonal relationships are not necessarily relevant to supplier relationships.

Accepted Answer

Interpersonal relationships can be relevant to supplier relationships. Building positive personal relationships with suppliers can help to establish trust and open communication, which can improve the overall business relationship. However, it is possible for supplier relationships to be purely transactional with no interpersonal component.

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.

Accepted Answer

When using a weighted-criteria evaluation system, all categories should be considered and vendors should be ranked based on their overall score, not just the two highest weighted categories.

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.

Accepted Answer

Offering an awards program to suppliers is a way to recognize and reward their commitment to excellence and encourage other suppliers to follow their example by implementing their improvement strategies. As a result, this can create a competitive environment where suppliers strive to excel, benefitting both the supplier and the buyer.

Question 18

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

Accepted Answer

Personal visits to prospective suppliers can help verify information provided on paper and allow for firsthand observation of operations, quality control measures, and overall reliability. This can aid in the certification process and ensure that the supplier meets the standards and requirements set by the company.

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.

Accepted Answer

It is possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to inventory when evaluating a supplier. These metrics can help assess a supplier's overall performance and identify areas for improvement.

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.

Accepted Answer

Increased visibility provided by SRM software can lead to a range of benefits, including smoother processes, faster cycle times, reduced new product development, and improved time-to-market.

Quiz 3: Creating and Managing Supplier Relationships