Which sourcing technique involves pre-qualified suppliers entering a website at a designated time to underbid others to win the buyer's business?

Which sourcing technique involves pre-qualified suppliers entering a website at a designated time to underbid others to win the buyer's business?

• A. Reverse Auctions
• B. Vendor-Managed Inventory (VMI)
• C. Corporate Social Responsibility (CSR)
• D. Ethical Sourcing

Answer: (A)

This question tests understanding of a reverse auction, where pre-qualified suppliers are invited to bid within a set time window on a buyer’s website to offer the lowest price and win the contract. The process starts by qualifying suppliers to ensure they meet the buyer’s standards, then opening a designated bidding period during which suppliers submit progressively lower bids to secure the business. It’s the classic price-driven competition where the goal is to outbid rivals to win, rather than focusing on inventory management or social/ethical aspects. The other options don’t fit this bidding mechanism. Vendor-Managed Inventory involves the supplier monitoring and replenishing the buyer’s stock, not online price competition. Corporate Social Responsibility and Ethical Sourcing concern the social, environmental, and ethical attributes of suppliers and sourcing choices, not the bidding process or timing of bids.

This question tests understanding of a reverse auction, where pre-qualified suppliers are invited to bid within a set time window on a buyer’s website to offer the lowest price and win the contract. The process starts by qualifying suppliers to ensure they meet the buyer’s standards, then opening a designated bidding period during which suppliers submit progressively lower bids to secure the business. It’s the classic price-driven competition where the goal is to outbid rivals to win, rather than focusing on inventory management or social/ethical aspects.

The other options don’t fit this bidding mechanism. Vendor-Managed Inventory involves the supplier monitoring and replenishing the buyer’s stock, not online price competition. Corporate Social Responsibility and Ethical Sourcing concern the social, environmental, and ethical attributes of suppliers and sourcing choices, not the bidding process or timing of bids.