Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Sourcing Products and Services 1 — Questions and Answers
Question 1: Which sourcing approach involves negotiating with two or three pre-qualified suppliers to maintain competitive pressure while ensuring supply continuity?
- Single sourcing
- Dual/multiple sourcing (Correct answer)
- Spot purchasing
- Vertical integration
Correct answer: Dual/multiple sourcing
Dual or multiple sourcing maintains relationships with a small number of qualified suppliers, balancing competitive pricing pressure with supply reliability — unlike single sourcing (one supplier) or spot purchasing (ad hoc market buys).
Question 2: A supplier scorecard used during the sourcing evaluation process primarily helps an organization:
- Determine the internal manufacturing cost of a product
- Objectively compare suppliers across weighted performance criteria (Correct answer)
- Calculate the break-even point for a make-or-buy decision
- Negotiate payment terms with existing vendors
Correct answer: Objectively compare suppliers across weighted performance criteria
Supplier scorecards assign weighted scores to criteria such as quality, delivery, cost, and responsiveness, enabling objective, side-by-side comparison of competing suppliers during selection.
Question 3: In the context of sourcing, a 'make-or-buy' decision is primarily driven by which analytical framework?
- Economic Order Quantity (EOQ)
- Total Cost of Ownership (TCO) and core competency analysis (Correct answer)
- ABC inventory classification
- Demand sensing and forecasting
Correct answer: Total Cost of Ownership (TCO) and core competency analysis
Make-or-buy decisions compare the full cost and strategic implications of internal production versus outsourcing, incorporating TCO and whether the activity aligns with the firm's core competencies.
Question 4: What is the key distinction between a Request for Information (RFI) and a Request for Quotation (RFQ)?
- An RFI is legally binding; an RFQ is not
- An RFI gathers market and capability data, while an RFQ solicits specific pricing for defined specifications (Correct answer)
- An RFQ is used for services only; an RFI is used for goods only
- An RFI requires a formal contract award; an RFQ does not
Correct answer: An RFI gathers market and capability data, while an RFQ solicits specific pricing for defined specifications
An RFI is an exploratory document used to learn about supplier capabilities and market conditions, while an RFQ requests firm pricing for well-defined products or services and is closer to a formal procurement action.
Question 5: Which contract type places the greatest financial risk on the buyer when actual costs are uncertain?
- Fixed-price contract
- Cost-plus-fixed-fee contract (Correct answer)
- Time-and-materials contract
- Firm-fixed-price with economic price adjustment
Correct answer: Cost-plus-fixed-fee contract
Under a cost-plus-fixed-fee contract, the buyer reimburses all allowable costs plus a predetermined fee, so the buyer bears the risk if costs escalate — the supplier is guaranteed recovery of all costs regardless of efficiency.
Question 6: Early supplier involvement (ESI) in the product development process primarily provides which benefit?
- It shifts all design responsibility to the supplier
- It enables suppliers to contribute technical expertise that reduces cost and lead time during design (Correct answer)
- It eliminates the need for a formal RFP process
- It guarantees a sole-source contract award to the involved supplier
Correct answer: It enables suppliers to contribute technical expertise that reduces cost and lead time during design
ESI brings suppliers into the design phase so their manufacturing knowledge and material expertise can identify cost reduction opportunities and design-for-manufacturability improvements before specifications are finalized.
Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Sourcing Products and Services 1
Which sourcing approach involves negotiating with two or three pre-qualified suppliers to maintain competitive pressure while ensuring supply continuity?