Supply Chain Management Chapter 3: Creating and Managing Supplier Relationships

Which of the following is a criteria generally found in certification programs: a. No incoming nonproduct rejections over a specified time b. Non-disclosure agreements c. Planned order releases d. No negative income

a. No incoming nonproduct rejections over a specified time

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

a. Performance metrics and personal business relationships are both keys to building successful partnerships.

One of the most basic and successful approaches for protecting trade secrets is to: a. Require employees and vendors to sign a nondisclosure agreement b. Increase the supplier base c. Contribute to innovations d. All of these choices are correct.

a. Require employees and vendors to sign a nondisclosure agreement

A benefit to the firm for utilizing a supplier recognition program would be: a. The award recipients can serve as role models for a firm's other suppliers b. It will increase the supply base c. It will lead to the silo-effect d. Suppliers are more likely to lower their product costs

a. The award recipients can serve as role models for a firm's other suppliers

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

a. True

SRM software can automate procurement activities that lead to significant cost savings as purchasing professionals move toward: a. Expediting each order b. Collaborative planning c. Diversifying their hiring d. Improving capacity

b. Collaborative planning

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. Supplier Certification c. Supplier Inspection d. Supply Management

b. Supplier Certification

All of the following are important capabilities offered by SRM software EXCEPT: a. Visibility b. Automation c. Human Resource Management d. Optimization

c. Human Resource Management

When evaluating supplier performance, the cost of certifying and training suppliers, is part of which major cost category? a. Post-transaction costs b. Transaction costs c. Pre-transaction cost d. All of these choices are correct.

c. Pre-transaction cost

Transactional SRM: a. Focuses on long-term procurement strategies b. Provides answers to questions such as: Which suppliers would make the company more profitable? c. Tends to focus on short-term reporting and is event driven d. Helps organizations assess where they want to go in the future to meet their strategic purchasing goals

c. Tends to focus on short-term reporting and is event driven

Hormel Food Corporation's No. 1 Award program differs from other programs because: a. Qualification for the award include green recovery criteria b. They provide cash incentives to the recipients c. The award is given out once every five years d. The award is given out bi-annually

c. The award is given out once every five years

What type of major cost category is considered in the cost associated with placing and receiving the order? a. Turnover Cost b. Pre-transaction Cost c. Transaction Cost d. Supplier-Development Cost

c. Transaction Cost

ISO 9000 certification is described best by which of the following? a. A series of purchasing standards developed by Toyota in the 1970s b. A prerequisite for obtaining ISO 14000 certification c. Developed by the International Organization for Standardization for environmental compliance d. A series of management and quality assurance standards in design development, production, installation and services

d. A series of management and quality assurance standards in design development, production, installation and services

Benefits for organizations that successfully implement supplier relationship management can include: a. Improved quality b. Increased speed to market c. Reduced costs d. All of these choices are correct.

d. All of these choices are correct.

SRM software should be capable of: a. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally b. Making information flow between partners more visible c. Automating transactional processes d. All of these choices are correct.

d. All of these choices are correct.

Successful partnerships have the potential to: a. Create a competitive advantage for the firm b. Improve material flows between buyers and suppliers c. Contribute to innovations d. All of these choices are correct.

d. All of these choices are correct.

SRM software allows buyers to focus on more strategic and value-added activities such as: a. Risk pooling b. Simplification c. Time utility d. Collaborative planning

d. Collaborative planning

Customers and suppliers must develop stronger relationships and partnerships based on: a. A strategic perspective b. The profit leverage effect c. Simplification d. A tactical perspective

a. A strategic perspective

When evaluating supplier performance, the cost of certifying and training suppliers, is part of which major cost category? a. Pre-transaction cost b. Transaction costs c. Post-transaction costs d. All of these choices are correct

a. Pre-transaction cost

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about: a. 30% of their time on expediting orders b. 20% of their time on expediting orders c. 10% of their time on expediting orders d. None of these choices are correct.

c. 10% of their time on expediting orders

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. SCSS b. CRM c. SRM d. ISO 9000

c. SRM

Which of the following is NOT important in developing a successful supplier partnership? a. Creating value for all participants b. Mutual/compatible needs that result in a win-win situation for the partners c. Open communication and information exchange d. Annual sales knowledge of the supplier

d. Annual sales knowledge of the supplier

Which of the following is NOT a key factor for developing a successful supplier partnership? a. Developing efficient processes that will remain unchanged for the duration of the partnership b. Personal relationships c. Information sharing and lines of communication d. Shared vision and objectives

a. Developing efficient processes that will remain unchanged for the duration of the partnership

Which of the following is NOT important in developing a successful strategic alliance? a. Developing efficient processes that will remain unchanged for the duration of the partnership b. Developing cross-functional team capabilities externally and within the company c. Developing performance metrics d. Open lines of communication that both promote sharing and secure confidentiality

a. Developing efficient processes that will remain unchanged for the duration of the partnership

A program used to celebrate the achievements of the best suppliers is: a. The Supplier Recognition Program b. The Evaluation and Certification Program c. The Supplier Development Program d. The Top Quality Management Program (TQM)

a. The Supplier Recognition Program

Which of the following is NOT a reason for supplier recognition programs? a. To select the best suppliers b. To reward suppliers for excellent performance c. To encourage suppliers to be more innovative d. To help suppliers' reputation in the marketplace

a. To select the best suppliers

Which of the following do organizations use in supplier evaluation and certification processes? a. Tracking service quality b. Logistics c. Consumer sales d. Inventory turnover ratio

a. Tracking service quality

Which of the following is NOT a key factor for developing a successful supplier partnership? a. Shared vision and objectives b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Personal relationships d. Information sharing and lines of communication

b. Developing efficient processes that will remain unchanged for the duration of the partnership

It is illegal for corporations to provide their suppliers appreciation banquets to award performance. a. True b. False

b. False

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT: a. Personal relationships b. Individualized objectives c. Performance metrics d. Mutual benefits and needs

b. Individualized objectives

According to the text, one of the most basic and successful approaches to protecting trade secrets is: a. Threat of litigation b. Requiring employees and vendors to sign non-disclosure agreements c. Requiring employees and partners to get ISO 9000 certified d. Working with law makers to increase fines and sentences for those that steal trade secrets

b. Requiring employees and vendors to sign non-disclosure agreements

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Evaluate each of the performance measures on a rating between zero and one-hundred b. Select the key dimensions of performance based on what is important to the end consumer c. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score d. The weights for all dimensions must sum to 1 or 100%

b. Select the key dimensions of performance based on what is important to the end consumer

____________ involves streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively. a. Corporate Social Responsibility b. Supplier Relationship Management c. Supplier Certification Program d. Performance Measurement

b. Supplier Relationship Management

According to the textbook, Supplier Recognition Programs: a. Are generally not very effective b. Are difficult to implement c. Are used by 90% of companies d. Encourage suppliers to keep their performance high

d. Encourage suppliers to keep their performance high

For continuous improvement to succeed, employees must first: a. Understand transaction costs b. Be compensated for making suggestions c. Identify areas that are not working d. Identify areas that are working

d. Identify areas that are working

Which of the following is NOT a key tenant of an SRM system? a. Lean operations b. Visibility c. Automation d. Integration

a. Lean operations

According to the text, which of the following is TRUE? a. About 50% of companies recognize excellent performance with supplier awards and appreciation banquets b. One of the most basic and successful approaches to protecting trade secrets is threat of litigation c. About 75% of companies recognize excellent performance with supplier awards and appreciation banquets d. One result of an effective supplier certification program is an increase in the supplier base

a. About 50% of companies recognize excellent performance with supplier awards and appreciation banquets

According to the text, the goal of a good performance evaluation system is to provide metrics that are: a. Understandable, quantitative, focused on quality-related results b. Understandable, qualitative, focused on short-term results c. Understandable, easy to measure, focused on value-added results d. Understandable, quantitative, focused of cost-related results

c. Understandable, easy to measure, focused on value-added results

In general, European companies prefer suppliers: a. Who are in the United States b. Whose headquarters are in a developing county c. Who have ISO 9001 certifications d. Who employ the most people

c. Who have ISO 9001 certifications

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 choices are correct.

d. All of these choices are correct.