Supplier Evaluation & Selection Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Supplier Evaluation & Selection flashcards as text
What does the term 'total cost of ownership (TCO)' encompass that unit price alone does NOT?
Answer: Acquisition, operating, maintenance, and end-of-life disposal costs over the asset's lifetime
TCO aggregates all costs associated with acquiring, using, maintaining, and disposing of a product or service, providing a fuller cost comparison than unit price.
A supplier's key account manager is replaced repeatedly, causing relationship disruptions. This is BEST addressed in future contracts by requiring:
Answer: Key-person continuity provisions with advance notice obligations
Key-person continuity clauses require suppliers to provide advance notice of personnel changes and allow buyers to approve critical replacement contacts.
Which statement BEST describes the difference between supplier qualification and supplier selection?
Answer: Qualification establishes that a supplier can meet requirements; selection chooses the best qualified supplier for a specific need
Qualification is a gate-keeping process confirming minimum capabilities, while selection compares qualified suppliers to choose the optimal source for a given requirement.
A company requires suppliers to submit their conflict minerals declarations under Dodd-Frank Section 1502. This requirement falls under which evaluation domain?
Answer: Regulatory and social compliance
Conflict minerals disclosure is a legal compliance requirement tied to ethical sourcing, placing it within the regulatory and social compliance evaluation domain.
When a buyer discovers that an approved supplier has subcontracted work to an unapproved third party, the FIRST action should be:
Answer: Formally notify the supplier and require disclosure and approval of the subcontractor
Formal notification triggers the contractual remedy process and requires the supplier to either remove the unapproved subcontractor or seek retroactive approval.
Which technique involves visiting a supplier's facility to observe operations, interview staff, and verify quality systems firsthand?
Answer: On-site supplier audit
An on-site supplier audit provides direct, observable evidence of the supplier's operational capabilities, quality controls, and workforce competencies.
A procurement team is evaluating two suppliers with identical unit prices. Supplier A has a 98% OTIF rate; Supplier B has a 91% OTIF rate. Choosing Supplier A PRIMARILY mitigates which type of risk?
Answer: Supply continuity and production disruption risk
Higher OTIF performance reduces the likelihood that late or incomplete deliveries will halt production lines or deplete safety stock.