Certification in Supplier Diversity Practice Exam

What defines an approved supplier?

1. A supplier with long-term contracts

2. A supplier who consistently offers the lowest price

3. A supplier that meets selection criteria and is added to the approved list

4. A supplier who provides feedback for future improvements

The correct answer is: A supplier that meets selection criteria and is added to the approved list

An approved supplier is defined as one that meets specific selection criteria and is subsequently added to an approved list. This generally indicates that the supplier has demonstrated the ability to meet the quality, reliability, legal, and compliance requirements necessary to fulfill the needs of the buyer. The approval process often includes assessments of the supplier's capabilities, financial stability, performance history, and adherence to ethical standards. Being on the approved list signifies that the supplier has undergone a vetting process, ensuring that they align with the organization's procurement policies and goals. This can include factors such as product quality, delivery performance, alignment with diversity goals, and responsiveness. Thus, option C reflects the comprehensive evaluation process that suppliers undergo to gain approval, making it the correct definition of an approved supplier. Other options presented do not encompass the complete criteria necessary for determining supplier approval. Long-term contracts, while beneficial, do not inherently mean a supplier is approved; many suppliers may have contracts without meeting the necessary approval standards. Similarly, consistent low pricing does not determine a supplier's overall qualification or approval status, as it might not reflect quality or compliance. Lastly, while feedback for future improvements is valuable, it does not equate to meeting the established selection criteria that define an approved supplier.