SCMN 2150 EXAM 2 QUESTIONS AND ANSWERS 2026
What is a procurement? - Answers - the purchase of merchandise or services at the
optimum possible total cost in the correct amount and quality.
What is strategic sourcing? (Multiple definitions) - Answers - Strategic sourcing is an
institutional procurement process that continuously improves and re-evaluates the
purchasing activities of a company.; An organized and collaborative approach to
leveraging targeted spend across locations with select suppliers that are best suited to
create knowledge and value in the customer-supplier interface.
Explain the differences between traditional purchasing and strategic sourcing. -
Answers - Cost. Traditional sourcing is about sourcing goods at the lowest possible cost
per unit whereas strategic sourcing is creating the best possible value and looking at the
total cost of ownership.
What are the steps in the procurement process and why is it important to follow them? -
Answers - - Identify material & service needs
- Evaluate supplier options
- Select supplier
- Release orders and receive products
- Measure and manage performance
This is important to follow because it ensures that the best quality products are acquired
at competitive prices and under the most favorable terms.
What are the goals of supply management and why is it important? - Answers - Buy
products and services
• At the right price
• From the right source
• At the right specification
• In the right quantity
• For delivery at the righttime
• To the right internal customer
This is important because it gives you the ability to generate a sustainable advantage
through lower costs,higher quality, and better service from our global supply base of
trading partners.
What is a quadrant analysis and why is it important? - Answers - a method that divides
a business into 80 or 20 customers and 80 or 20 products. It can help companies
identify applications that they should be using now and in the future to remain
competitive
, Why is it important to evaluate supplier performance? - Answers - Evaluations are
important because they help you to ensure that your suppliers are meeting your
standards and requirements. They also allow you to identify any potential problems that
could impact your business.
Define and be able to calculate Fill rate, Defect Rate, On time % and Perfect Order % -
Answers - Fill Rate- Total Quantity Received / Total Quantity Ordered
Defect Rate- Total Quantity Defective / Total Quantity Received
On Time %- Orders Received On Time / Total Orders
Perfect Order %- Order arrives on time, without defects, and with perfect documentation
at the right location with correct quantities of all SKUs ordered16
What is a supplier scorecard and how they created and utilized? - Answers - Supplier
scorecards monitor performance across multiple metrics overextended time period, and
they are used to track, manage, and measure vendor performance. This includes
measuring performance against specific metrics, setting targets, and increasing supplier
performance over time.
From readings: What are the 7 steps of strategic sourcing? - Answers - 1. Analyze
product categories used by the business, spending patterns, and the processes and
departments involved.
2. Develop a sourcing strategy based on business goals.
3. Analyze the supplier market and create a supplier portfolio.
4. Define request for proposal criteria and templates.
5. Negotiate with and select suppliers.
6. Integrate suppliers into existing processes, onboarding any new vendors or out
sourcing providers.
7. Track performance metrics and optimize the sourcing plan, as needed.
From readings: What's holding procurement back? - Answers - 1. Lack of KPIs and
metrics to monitor the effectiveness of the performance tomeet the goals of the
relationship. If KPIs do exist, they are generally focused on safety and adherence to
payment terms with a very limited view, if any, on performance and productivity
2. Unwillingness for end-users / operations groups to modify day to day interactions with
suppliers
3. Lack of executive support and commitment to the new operating model developed
through the contracting process
From readings: What types of large-scale changes are companies planning in the
coming out of the pandemic? - Answers - • Expand their supply base (38%)
• Shrink their global supply chain and rely on local suppliers (34%)
• Increase inventory levels (21%)
• Increase financing for key suppliers (9%)
What is a procurement? - Answers - the purchase of merchandise or services at the
optimum possible total cost in the correct amount and quality.
What is strategic sourcing? (Multiple definitions) - Answers - Strategic sourcing is an
institutional procurement process that continuously improves and re-evaluates the
purchasing activities of a company.; An organized and collaborative approach to
leveraging targeted spend across locations with select suppliers that are best suited to
create knowledge and value in the customer-supplier interface.
Explain the differences between traditional purchasing and strategic sourcing. -
Answers - Cost. Traditional sourcing is about sourcing goods at the lowest possible cost
per unit whereas strategic sourcing is creating the best possible value and looking at the
total cost of ownership.
What are the steps in the procurement process and why is it important to follow them? -
Answers - - Identify material & service needs
- Evaluate supplier options
- Select supplier
- Release orders and receive products
- Measure and manage performance
This is important to follow because it ensures that the best quality products are acquired
at competitive prices and under the most favorable terms.
What are the goals of supply management and why is it important? - Answers - Buy
products and services
• At the right price
• From the right source
• At the right specification
• In the right quantity
• For delivery at the righttime
• To the right internal customer
This is important because it gives you the ability to generate a sustainable advantage
through lower costs,higher quality, and better service from our global supply base of
trading partners.
What is a quadrant analysis and why is it important? - Answers - a method that divides
a business into 80 or 20 customers and 80 or 20 products. It can help companies
identify applications that they should be using now and in the future to remain
competitive
, Why is it important to evaluate supplier performance? - Answers - Evaluations are
important because they help you to ensure that your suppliers are meeting your
standards and requirements. They also allow you to identify any potential problems that
could impact your business.
Define and be able to calculate Fill rate, Defect Rate, On time % and Perfect Order % -
Answers - Fill Rate- Total Quantity Received / Total Quantity Ordered
Defect Rate- Total Quantity Defective / Total Quantity Received
On Time %- Orders Received On Time / Total Orders
Perfect Order %- Order arrives on time, without defects, and with perfect documentation
at the right location with correct quantities of all SKUs ordered16
What is a supplier scorecard and how they created and utilized? - Answers - Supplier
scorecards monitor performance across multiple metrics overextended time period, and
they are used to track, manage, and measure vendor performance. This includes
measuring performance against specific metrics, setting targets, and increasing supplier
performance over time.
From readings: What are the 7 steps of strategic sourcing? - Answers - 1. Analyze
product categories used by the business, spending patterns, and the processes and
departments involved.
2. Develop a sourcing strategy based on business goals.
3. Analyze the supplier market and create a supplier portfolio.
4. Define request for proposal criteria and templates.
5. Negotiate with and select suppliers.
6. Integrate suppliers into existing processes, onboarding any new vendors or out
sourcing providers.
7. Track performance metrics and optimize the sourcing plan, as needed.
From readings: What's holding procurement back? - Answers - 1. Lack of KPIs and
metrics to monitor the effectiveness of the performance tomeet the goals of the
relationship. If KPIs do exist, they are generally focused on safety and adherence to
payment terms with a very limited view, if any, on performance and productivity
2. Unwillingness for end-users / operations groups to modify day to day interactions with
suppliers
3. Lack of executive support and commitment to the new operating model developed
through the contracting process
From readings: What types of large-scale changes are companies planning in the
coming out of the pandemic? - Answers - • Expand their supply base (38%)
• Shrink their global supply chain and rely on local suppliers (34%)
• Increase inventory levels (21%)
• Increase financing for key suppliers (9%)
