Strategic sourcing MCQs in Supply Chain

MCQs on Strategic Sourcing in Supply Chain

1. What is the primary objective of strategic sourcing?
   • a) To find the lowest cost suppliers
   • b) To develop long-term relationships with suppliers
   • c) To reduce the number of suppliers
   • d) To streamline the procurement process
   • Answer: b) To develop long-term relationships with suppliers
2. Which of the following is NOT a step in the strategic sourcing process?
   • a) Spend analysis
   • b) Market research
   • c) Supplier negotiation
   • d) Product innovation
   • Answer: d) Product innovation
3. What is the purpose of a spend analysis in strategic sourcing?
   • a) To forecast future market trends
   • b) To identify areas where cost savings can be achieved
   • c) To assess supplier performance
   • d) To evaluate employee performance
   • Answer: b) To identify areas where cost savings can be achieved
4. Which of the following best describes total cost of ownership (TCO) in strategic sourcing?
   • a) The initial purchase price of goods or services
   • b) The sum of all costs associated with the purchase, use, and disposal of a product
   • c) The cost of raw materials
   • d) The cost of labor
   • Answer: b) The sum of all costs associated with the purchase, use, and disposal of a product
5. What is a key benefit of strategic sourcing?
   • a) Reduced need for supplier audits
   • b) Improved supplier relationships and collaboration
   • c) Increased number of suppliers
   • d) Shorter procurement cycles
   • Answer: b) Improved supplier relationships and collaboration
6. Which of the following strategies is commonly used in strategic sourcing to manage risk?
   • a) Single sourcing
   • b) Dual sourcing
   • c) Increasing inventory levels
   • d) Reducing supplier lead times
   • Answer: b) Dual sourcing
7. What does the term “supplier consolidation” refer to in strategic sourcing?
   • a) Increasing the number of suppliers for each product
   • b) Reducing the number of suppliers by selecting the best ones
   • c) Merging with suppliers to form a single entity
   • d) Diversifying the supplier base to mitigate risks
   • Answer: b) Reducing the number of suppliers by selecting the best ones
8. Which of the following is an essential component of a strategic sourcing plan?
   • a) Product lifecycle management
   • b) Supplier selection criteria
   • c) Market segmentation
   • d) Customer relationship management
   • Answer: b) Supplier selection criteria
9. What is the role of cross-functional teams in strategic sourcing?
   • a) To handle day-to-day procurement tasks
   • b) To develop and implement sourcing strategies
   • c) To manage supplier payment processes
   • d) To monitor inventory levels
   • Answer: b) To develop and implement sourcing strategies
10. Which of the following best describes a reverse auction in strategic sourcing?
    • a) A process where suppliers bid against each other to offer the lowest price
    • b) A method of selling surplus inventory at discounted prices
    • c) A strategy to increase the number of suppliers
    • d) A negotiation tactic used to extend payment terms
    • Answer: a) A process where suppliers bid against each other to offer the lowest price