L4M4 practice question 9 of 25

There are a number of models that can be used to appraise suppliers before commencing a full tendering process. Which of the following could be considered when appraising a supplier? Capacity Control Compatibility Commodity

Full set: 293 questions
Answer options
A: 1 and 2 only
B: 2 and 4 only
C: 1 and 3 only Correct answer
D: 2 and 3 only
Correct Answer:
C. 1 and 3 only
Explanation

When appraising suppliers, buyers assess various factors to determine their suitability. Capacity (1) is a critical factor, evaluating whether the supplier has the required resources, equipment, and workforce to meet the buyer's volume and delivery needs. Compatibility (3) is also essential, especially for strategic relationships, as it considers the alignment of cultures, values, and systems between the buyer and supplier, which facilitates a smooth working relationship. Both are fundamental criteria used in pre-tender supplier appraisal models to gauge a supplier's ability to perform and fit with the buying organisation.

Why Incorrect

2. Control, while a valid appraisal criterion (e.g., process control), is often considered alongside other factors. The pairing of Capacity and Compatibility represents two distinct, high-level checks: operational capability and relational fit.
4. Commodity refers to the product or service being purchased; it is a category of spend, not a criterion for appraising a supplier's capabilities.

References

CIPS. (2021). Ethical and Responsible Sourcing L4M4. Stamford, UK: CIPS, pp. 76-78. (Discusses supplier appraisal criteria, including capacity and compatibility as key considerations).

Carter, R. (1995). The 10 Cs of supplier evaluation. The Journal of Purchasing and Supply Management, 1(4), pp. 2-4. (Introduces a model where 'Capacity' and aspects of 'Compatibility' (under Culture and Communication) are key criteria for supplier evaluation). DOI: https://doi.org/10.1016/1478-4092(95)90062-9.

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