SCM201 COMPREHENSIVE EXAM 2026 QUESTIONS AND
SOLUTIONS GRADED A+
✔✔false - ✔✔T/F: Short-term purchase contracts that award small volumes of business
to multiple suppliers decrease production costs and provide incentive for individual
supplier investments in process improvement.
✔✔false - ✔✔T/F: A single source can never deliver cost and quality improvements over
the life of a contract even if a buyer manages that supplier effectively.
✔✔true - ✔✔T/F: A smaller supplier with limited capacity for growth may need to
eliminate some existing customers to meet the increased requirements of a larger
customer
✔✔true - ✔✔T/F: In an absence of competition situation, a supplier may hold the buyer
hostage by unduly raising prices without justification or becoming too complacent,
particularly when there are higher switching costs
✔✔true - ✔✔T/F: Buyers can minimize supply disruption risk from a single suppler by
selecting a supplier with multiple production facilities.
✔✔false - ✔✔T/F: Buyers cannot move too aggressively when reducing the supply
base.
✔✔false - ✔✔T/F: There is only one common approach to supply base rationalization
and optimization.
✔✔true - ✔✔T/F: A large supply base means the duplication of a wide range of supply
management activities, adding to acquisition cost without a corresponding increase in
value added to the customer
✔✔false - ✔✔T/F: Supplier rationalization and optimization should be a one-time
activity.
✔✔true - ✔✔T/F: Direct involvement in a supplier's operations by buyer personnel is the
most challenging part of any supplier development process
✔✔true - ✔✔T/F: In supplier development, the supplier must be convinced that it is in
the supplier's own best interest to accept the buyer's direction and technical assistance.
✔✔false - ✔✔T/F: All organizations need to pursue supplier development
✔✔false - ✔✔T/F: If a supplier's product or service is deemed routine to the buyer, it
should then be considered for supplier development.
, ✔✔true - ✔✔T/F:The buyer and the supplier must agree on how to divide or share the
costs and benefits from the supplier development project.
✔✔true - ✔✔T/F: Suppliers are sometimes not willing to accept outside help in the form
of supplier development, either because they are too proud to accept help or because
they do not see the value in improving quality or delivery performance.
✔✔false - ✔✔T/F: Pursuing supplier development activities directly with suppliers is
both quick and easy.
✔✔true - ✔✔T/F: Regarding supply base risk, every sourcing decision will be different
and must be carefully evaluated regarding its own particular situation.
✔✔false - ✔✔T/F: Maintaining small quantities of inventory has been the traditional
methods of dealing with supply base risk
✔✔true - ✔✔T/F: Multiple sourcing can add quality variability to the sourced product
because of the use of different materials, manufacturing techniques, and processes.
✔✔false - ✔✔T/F: Scenario analysis is technically considered forecasting and attempts
to explore and prepare for possible future scenarios that may have a significant
negative impact on the costs and operations of an organization.
✔✔false - ✔✔T/F: Scenario planning begins with the creation of viable working
strategies and plans that would allow managers to respond quickly in the event that a
specific risk scenario should actually come about.
✔✔true - ✔✔T/F: The prime reason for hedging is to protect the buyer against major
swings in the value of a future purchase.
✔✔false - ✔✔T/F: All buyers are encouraged to engage in currency hedging activities,
regardless of their level of experience.
✔✔false - ✔✔T/F: Few international shipments of merchandise require insurance
coverage.
✔✔false - ✔✔T/F: Certain risks, such as those arising from war, piracy, and losses
attributable to delays in transit, are generally covered by standard insurance policies
✔✔false - ✔✔T/F: Sustainability reflects only the importance of strategic environmental
practices of an organization's suppliers but not the management of social responsibility
in the supply base.
SOLUTIONS GRADED A+
✔✔false - ✔✔T/F: Short-term purchase contracts that award small volumes of business
to multiple suppliers decrease production costs and provide incentive for individual
supplier investments in process improvement.
✔✔false - ✔✔T/F: A single source can never deliver cost and quality improvements over
the life of a contract even if a buyer manages that supplier effectively.
✔✔true - ✔✔T/F: A smaller supplier with limited capacity for growth may need to
eliminate some existing customers to meet the increased requirements of a larger
customer
✔✔true - ✔✔T/F: In an absence of competition situation, a supplier may hold the buyer
hostage by unduly raising prices without justification or becoming too complacent,
particularly when there are higher switching costs
✔✔true - ✔✔T/F: Buyers can minimize supply disruption risk from a single suppler by
selecting a supplier with multiple production facilities.
✔✔false - ✔✔T/F: Buyers cannot move too aggressively when reducing the supply
base.
✔✔false - ✔✔T/F: There is only one common approach to supply base rationalization
and optimization.
✔✔true - ✔✔T/F: A large supply base means the duplication of a wide range of supply
management activities, adding to acquisition cost without a corresponding increase in
value added to the customer
✔✔false - ✔✔T/F: Supplier rationalization and optimization should be a one-time
activity.
✔✔true - ✔✔T/F: Direct involvement in a supplier's operations by buyer personnel is the
most challenging part of any supplier development process
✔✔true - ✔✔T/F: In supplier development, the supplier must be convinced that it is in
the supplier's own best interest to accept the buyer's direction and technical assistance.
✔✔false - ✔✔T/F: All organizations need to pursue supplier development
✔✔false - ✔✔T/F: If a supplier's product or service is deemed routine to the buyer, it
should then be considered for supplier development.
, ✔✔true - ✔✔T/F:The buyer and the supplier must agree on how to divide or share the
costs and benefits from the supplier development project.
✔✔true - ✔✔T/F: Suppliers are sometimes not willing to accept outside help in the form
of supplier development, either because they are too proud to accept help or because
they do not see the value in improving quality or delivery performance.
✔✔false - ✔✔T/F: Pursuing supplier development activities directly with suppliers is
both quick and easy.
✔✔true - ✔✔T/F: Regarding supply base risk, every sourcing decision will be different
and must be carefully evaluated regarding its own particular situation.
✔✔false - ✔✔T/F: Maintaining small quantities of inventory has been the traditional
methods of dealing with supply base risk
✔✔true - ✔✔T/F: Multiple sourcing can add quality variability to the sourced product
because of the use of different materials, manufacturing techniques, and processes.
✔✔false - ✔✔T/F: Scenario analysis is technically considered forecasting and attempts
to explore and prepare for possible future scenarios that may have a significant
negative impact on the costs and operations of an organization.
✔✔false - ✔✔T/F: Scenario planning begins with the creation of viable working
strategies and plans that would allow managers to respond quickly in the event that a
specific risk scenario should actually come about.
✔✔true - ✔✔T/F: The prime reason for hedging is to protect the buyer against major
swings in the value of a future purchase.
✔✔false - ✔✔T/F: All buyers are encouraged to engage in currency hedging activities,
regardless of their level of experience.
✔✔false - ✔✔T/F: Few international shipments of merchandise require insurance
coverage.
✔✔false - ✔✔T/F: Certain risks, such as those arising from war, piracy, and losses
attributable to delays in transit, are generally covered by standard insurance policies
✔✔false - ✔✔T/F: Sustainability reflects only the importance of strategic environmental
practices of an organization's suppliers but not the management of social responsibility
in the supply base.
