CSCP Sourcing and Supplier Management 5 — Questions and Answers
Question 1: A buyer requires suppliers to hold a minimum 30-day inventory at their own facility for release on demand. This arrangement is called:
- Consignment or supplier-held buffer stock (Correct answer)
- Safety stock managed by the buyer
- Vendor-managed inventory
- Cross-docking arrangement
Correct answer: Consignment or supplier-held buffer stock
Consignment or supplier-held buffer stock keeps inventory at the supplier's risk until called off, reducing buyer's on-hand investment.
Question 2: Which sustainability practice in procurement requires suppliers to disclose the carbon footprint of their manufacturing processes?
- Scope 3 emissions reporting (Correct answer)
- ISO 14001 certification requirement
- Carbon offset purchasing
- Green procurement labeling
Correct answer: Scope 3 emissions reporting
Scope 3 emissions encompass value chain emissions including those from suppliers, and requiring their disclosure is a key sustainable sourcing practice.
Question 3: What is the primary risk of single sourcing a high-volume, critical component?
- Supply disruption with no immediate alternative if the supplier fails (Correct answer)
- Higher unit cost due to lack of competition
- Longer lead times caused by order splitting
- Reduced quality because the supplier faces no competitive pressure
Correct answer: Supply disruption with no immediate alternative if the supplier fails
Single sourcing concentrates supply risk: any disruption at the sole supplier halts production with no qualified backup available.
Question 4: A company's procurement team implements e-procurement software to automate purchase requisitions and approvals. The MAIN benefit is:
- Reduced maverick spending and faster cycle times through standardized workflows (Correct answer)
- Elimination of all supplier negotiations
- Automatic selection of the lowest-cost supplier for every purchase
- Guaranteed compliance with import/export regulations
Correct answer: Reduced maverick spending and faster cycle times through standardized workflows
E-procurement systems enforce policy-compliant buying channels and streamline approvals, cutting off-contract purchases and reducing transaction processing time.
Question 5: When a buyer includes environmental and social governance (ESG) criteria in a supplier evaluation, the practice is referred to as:
- Responsible sourcing (Correct answer)
- Green logistics
- Ethical auditing
- Demand-side management
Correct answer: Responsible sourcing
Responsible sourcing formally integrates ESG criteria—environmental impact, labor rights, and governance—into supplier selection and monitoring.
Question 6: Which document formally initiates the internal procurement process by identifying a need and requesting authorization to purchase?
- Purchase requisition (Correct answer)
- Purchase order
- Request for quotation
- Goods receipt note
Correct answer: Purchase requisition
A purchase requisition is the internal document that triggers the procurement process by identifying what is needed and seeking management authorization.
Question 7: In supply chain risk management, a 'second-tier supplier' risk refers to:
- Vulnerabilities at the suppliers of your direct suppliers that can cascade upstream to you (Correct answer)
- Risks posed by backup suppliers not yet under contract
- Regulatory risks specific to second-ranked suppliers on your preferred list
- Price volatility from commodity markets affecting tier-two cost structures
Correct answer: Vulnerabilities at the suppliers of your direct suppliers that can cascade upstream to you
Second-tier supplier risk recognizes that disruptions beyond your direct suppliers can propagate up the chain and impact your own supply continuity.
CSCP Sourcing and Supplier Management 5
A buyer requires suppliers to hold a minimum 30-day inventory at their own facility for release on demand.
This arrangement is called: