Supplier Identification, Evaluation, and Selection

Introduction

Supplier selection is a consequential international business decision. A supplier affects not only purchase price but also product quality, continuity of supply, innovation, regulatory compliance, reputation, and working-capital requirements. These effects become more difficult to evaluate when suppliers operate across different legal systems, currencies, logistics networks, and cultural environments.

Effective selection therefore involves more than comparing quotations. It is a staged process combining supplier discovery, prequalification, due diligence, capability assessment, financial analysis, audits, multicriteria evaluation, and governance. The objective is not to identify the supplier with the lowest quoted price, but the supplier or supplier portfolio offering the best risk-adjusted value.

Learning Objectives

After completing this chapter, students should be able to:

1. Conduct structured domestic and international supplier discovery.
2. Design prequalification criteria and distinguish mandatory requirements from preferences.
3. Perform commercial, legal, financial, operational, ethical, and sustainability due diligence.
4. Assess supplier capacity, process capability, quality, delivery, and resilience.
5. Interpret financial ratios while recognizing their limitations.
6. Plan and evaluate supplier audits.
7. Apply weighted-score models and multicriteria decision analysis.
8. Evaluate supplier diversity without weakening performance or compliance standards.
9. Use sensitivity analysis and governance controls to improve selection decisions.

1. The Supplier Selection Process

Supplier selection should operate as a controlled funnel. Broad discovery is followed by progressively more demanding evaluation. This avoids spending audit and negotiation resources on clearly unsuitable candidates.

Figure: A staged supplier selection process supported by cross-cutting governance.

Although presented sequentially, the process is iterative. An audit may reveal information requiring rescoring, while negotiations may expose capacity or financial constraints. Selection also differs from contracting: a preferred supplier should not receive an award until commercial terms, approvals, and contractual protections are complete.

2. Supplier Discovery and Market Intelligence

Supplier discovery creates a defensible long list of potential providers. The search should begin with a clear business requirement specifying technical, commercial, regulatory, logistics, and service needs. Poor specifications produce unsuitable candidates and quotations that cannot be compared.

2.1 Discovery sources

Common sources include:

• existing supplier databases and enterprise resource planning records;
• trade fairs, industry associations, and chambers of commerce;
• government export agencies and supplier-development programs;
• commercial databases and electronic sourcing platforms;
• professional networks, technical publications, and patent databases;
• referrals from customers, logistics providers, and engineering advisers;
• regional industrial clusters and certified supplier directories;
• requests for information issued to the market.

Search coverage should not be confused with search quality. An internet listing establishes only that an organization claims to supply an item; it does not verify legal identity, capability, ownership, or performance.

2.2 Market mapping

A category market map identifies supplier concentration, geographic clusters, substitute technologies, capacity conditions, entry barriers, and exposure to geopolitical or natural hazards. For strategic inputs, buyers should also investigate upstream dependencies. Two apparently independent suppliers may rely on the same sub-tier producer, port, or raw-material source.

An RFI gathers general information before detailed bidding. An RFQ is most suitable when requirements are standardized and price comparison is central. An RFP is appropriate when suppliers may propose different technical or service solutions.

3. Prequalification and Eligibility Gates

Prequalification determines whether a supplier meets minimum conditions for further evaluation. It reduces workload and prevents attractive commercial offers from obscuring unacceptable risks.

Typical criteria include legal registration, relevant licenses, minimum insurance, technical certifications, capacity, geographic coverage, cybersecurity controls, acceptance of the buyer's code of conduct, and absence from applicable sanctions or debarment lists.

Criteria should be separated into three categories:

A mandatory requirement should be objectively related to the procurement need. Excessive qualification thresholds can exclude innovative small suppliers and reduce competition. For example, demanding annual revenue ten times the likely contract value may be unjustified unless continuity risk requires that scale.

Prequalification evidence should be current and independently verifiable. Certificates must be checked for issuing body, scope, covered site, and expiry date. A quality certificate for one factory does not automatically apply to another factory in the same corporate group.

4. Supplier Due Diligence

Due diligence tests whether supplier representations are accurate and whether material risks are acceptable. Its depth should reflect spend, criticality, data access, geographic exposure, and potential harm.

4.1 Corporate and legal diligence

The buyer should verify:

• legal name, registration number, address, and operating status;
• parent companies, subsidiaries, and beneficial owners;
• authority of representatives to contract;
• material litigation, insolvency proceedings, and debarment;
• intellectual-property ownership and licensing;
• permits, insurance, and sector-specific approvals.

Beneficial ownership matters because a supplier's formal name may conceal sanctioned parties, public officials, competitors, or undisclosed conflicts of interest.

4.2 Integrity and regulatory diligence

International sourcing may trigger anti-bribery, sanctions, export-control, competition, customs, privacy, and modern-slavery obligations. A risk-based review examines ownership, politically exposed persons, intermediaries, government relationships, adverse media, previous enforcement actions, and the supplier's compliance system.

Sanctions screening is not a one-time exercise. Ownership and control can change after onboarding. High-risk suppliers require periodic rescreening and contractual notification duties.

4.3 Human-rights and environmental diligence

Responsible sourcing increasingly requires investigation beyond the direct supplier. Relevant concerns include forced labor, child labor, unsafe working conditions, excessive hours, unlawful recruitment fees, pollution, deforestation, and unverified environmental claims.

Evidence can include worker interviews, payroll and time records, grievance mechanisms, environmental permits, emissions data, traceability records, and corrective-action history. An audit alone does not prove the absence of abuse; falsified records and coached interviews are recognized limitations.

4.4 Cybersecurity and information diligence

Suppliers that access systems, personal data, designs, or operational technology should be assessed for access control, encryption, incident response, vulnerability management, subcontractor controls, backup, and breach-notification capability. The assessment must be proportionate: a cleaning contractor and a cloud-platform provider do not create the same information risk.

5. Capability and Performance Assessment

Capability assessment asks whether a supplier can repeatedly meet requirements under normal and disrupted conditions.

5.1 Capacity and utilization

A basic utilization measure is:

where U is utilization, Q is actual output during a stated period, and C_e is effective capacity for the same period. Both quantities must use the same units, such as units per month. Effective capacity reflects realistic downtime and product mix; it is normally lower than theoretical design capacity.

If a plant produces 84,000 units per month and effective capacity is 100,000 units per month, utilization is 84,000 ÷ 100,000 × 100% = 84%. High utilization may improve unit economics but leave insufficient capacity for demand surges or equipment failure.

Capacity evidence should examine bottleneck operations, labor availability, maintenance, tooling, changeover times, yield, committed customer volumes, and expansion lead time. Reported total factory capacity may be irrelevant if the required specialized process is the bottleneck.

5.2 Process capability

For a stable process with approximately normally distributed output and two-sided specification limits, process capability may be estimated using:

Here, USL and LSL are upper and lower specification limits, μ is the process mean, and σ is the within-process standard deviation. All four variables must use the same measurement unit. The formula assumes statistical stability; a high value calculated from an unstable process is misleading. Capability expectations depend on product risk and customer requirements.

Suppose a shaft diameter has LSL = 9.90 mm, USL = 10.10 mm, μ = 10.02 mm, and σ = 0.02 mm. Then:

The upper limit is the constraining side. The result does not eliminate the need to inspect sampling methods, measurement-system accuracy, and process stability.

5.3 Quality, delivery, and service indicators

Useful historical indicators include defect rates, returns, warranty claims, corrective-action closure, schedule adherence, and responsiveness. One common delivery measure is:

where N_on-time is the number of orders delivered according to the agreed definition and N_due is the number due during the period. The buyer must define whether “on time” refers to shipment, arrival, or acceptance and whether partial orders qualify.

Performance figures are comparable only if definitions, time windows, product complexity, and data quality are comparable. Self-reported averages may conceal severe variation among sites or customers.

5.4 Resilience and scalability

Resilience assessment examines business continuity plans, alternate sites, tooling ownership, emergency communications, inventories, recovery times, sub-tier visibility, and exposure to single points of failure. Buyers should test plans through scenarios rather than merely confirm that a document exists.

Scalability differs from current capacity. It concerns the ability to expand output while maintaining quality, workforce competence, financing, and compliance.

6. Financial Analysis of Suppliers

A financially distressed supplier may cut maintenance, buy inferior materials, demand advance payment, or cease operating. Financial analysis should therefore assess liquidity, leverage, profitability, cash generation, and trends.

6.1 Core ratios

Ratios are dimensionless except margins, which are percentages. Definitions must be applied consistently. Negative equity makes debt-to-equity difficult to interpret, while negligible interest expense can produce a very high coverage ratio without proving overall strength.

6.2 Worked financial interpretation

Assume a supplier reports current assets of $2.4 million, current liabilities of $1.5 million, interest-bearing debt of $3.0 million, and equity of $2.0 million.

The supplier has $1.60 of current assets for each $1.00 of current liabilities and $1.50 of interest-bearing debt for each $1.00 of equity. Neither ratio independently proves safety. The analyst should examine trends, cash-flow timing, inventory quality, loan maturities, contingent liabilities, customer concentration, and industry norms.

Privately held suppliers may provide limited or unaudited statements. Alternatives include bank references, credit reports, tax filings where lawful, payment histories, parent guarantees, and management interviews. Buyers should protect confidential financial information and limit access to authorized personnel.

7. Supplier Audits

A supplier audit is a systematic examination of controls, evidence, and practices against defined criteria. Audits may be conducted remotely or on site and may be first-party, second-party, or independent third-party assessments.

7.1 Audit planning

A sound audit specifies scope, criteria, sites, auditors, timing, sampling approach, confidentiality, and reporting rules. Audit teams should possess relevant technical, language, and regulatory competence. Conflicts of interest must be disclosed.

Typical areas include:

• production and quality-management systems;
• worker health, safety, and labor conditions;
• environmental controls and permits;
• cybersecurity and data handling;
• traceability and sub-tier management;
• continuity planning and physical security.

7.2 Findings and corrective action

Findings are often classified as critical, major, or minor, but definitions must be established in advance. Critical issues such as forced labor, deliberate falsification, or imminent safety danger may require suspension or exclusion. Other findings may permit a time-bound corrective-action plan.

A corrective action should identify the root cause, responsible owner, deadline, evidence, and verification method. Closing a finding because the supplier submitted a policy is inadequate if operating practice has not changed.

Audits provide sampled evidence from a particular time and place. Announced visits can encourage staged compliance, while unannounced visits may be restricted by law, safety, or contract. Audit results should therefore be combined with performance data, worker voice, document verification, and continuing monitoring.

8. Total Cost of Ownership

Quoted price is only one component of economic value. A simplified total cost of ownership model is:

where P is purchase price, L is logistics cost, D is duties and nonrecoverable taxes, Q is expected quality-related cost, A is administrative and transaction cost, R is risk-related expected cost, and V is recoverable residual value or credits. All terms must cover the same volume, time horizon, and currency basis.

If annual purchase price is $1,000,000, logistics is $80,000, duties are $50,000, expected quality cost is $40,000, administration is $10,000, and no residual value or separately quantified risk cost is included, annual TCO is $1,180,000.

Expected monetary risk cost may be estimated as:

where p is the estimated probability of the defined event during the analysis period and I is its monetary impact. This approach is useful for comparable, quantifiable events but can create false precision when probabilities are poorly supported. Catastrophic legal or human-rights risks should not be treated merely as costs that can be offset by price savings.

9. Weighted-Score Evaluation

A weighted-score model combines multiple criteria into one ranking:

where S_i is the total score of supplier i, w_j is the weight of criterion j, r_ij is supplier i's normalized rating on criterion j, and m is the number of criteria. Weights must be nonnegative and normally sum to 1. Ratings must use a common scale, such as 0–100.

For a positive cost value where lower cost is preferred, a simple ratio normalization is:

where c_i > 0 is supplier i's comparable cost and c_min is the lowest positive cost. This method is unsuitable if costs can be zero or negative and may overreward a very low outlier. Normalization rules should be determined before bids are opened.

Weighted scoring is compensatory: a weak rating on one criterion can be offset by strength elsewhere. Mandatory legal, safety, or ethical requirements should therefore be applied as gates rather than ordinary weighted criteria.

Good scoring rubrics use observable anchors. For example, a resilience score of 100 might require qualified alternate production, tested recovery procedures, and sub-tier visibility; a score of 20 might indicate an untested single site with no documented recovery plan.

10. Multicriteria Decision Analysis

10.1 Analytic Hierarchy Process

The Analytic Hierarchy Process (AHP) derives priorities from pairwise comparisons. Decision makers compare criterion i with criterion j, creating a positive reciprocal matrix A, where a_ji = 1 ÷ a_ij and a_ii = 1. Priorities can be estimated from the principal eigenvector or normalized row geometric means.

For three criteria—quality, cost, and resilience—consider:

This perfectly consistent matrix corresponds to priorities in the ratio 6:2:1. Normalized weights are therefore:

For a pairwise matrix of order n ≥ 3, judgment consistency may be assessed using:

Here, λ_max is the matrix's principal eigenvalue, CI is the consistency index, and RI_n is the average random index for matrices of order n. For the exact matrix above, λ_max = 3, so CI = 0 and, using RI₃ = 0.58, CR = 0.

The standard consistency ratio formula is restricted to n ≥ 3. For a two-item reciprocal comparison, RI₂ = 0, so dividing by it is undefined; moreover, a 2 × 2 reciprocal matrix is perfectly consistent by construction. A commonly used practical guideline treats CR ≤ 0.10 as acceptable for larger matrices, but this is a diagnostic convention rather than a universal law.

AHP improves transparency but does not remove subjectivity. Group judgments can be affected by hierarchy design, dominant participants, and inconsistent interpretation of comparison scales.

10.2 TOPSIS and outranking approaches

The Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) favors alternatives close to an ideal point and far from a worst point. It requires normalization, weighting, construction of ideal and anti-ideal values, and distance calculation. Results can change with the normalization method and the alternatives included.

Outranking methods compare whether one supplier is sufficiently better than another while considering veto thresholds. They are useful when serious weakness on one criterion should prevent compensation by strengths elsewhere. However, their threshold choices can be difficult to explain to nontechnical stakeholders.

No MCDA technique converts poor evidence into a reliable decision. Model choice, criteria, data definitions, and governance matter more than computational sophistication.

11. Supplier Diversity Assessment

Supplier diversity seeks meaningful participation by enterprises owned or controlled by historically underrepresented groups, small businesses, local enterprises, social enterprises, or other categories recognized in the relevant jurisdiction. Definitions vary internationally and must not be transferred uncritically between countries.

Assessment should verify ownership and control using credible certification or lawful documentation. Diversity status should not replace technical, ethical, or commercial requirements. Instead, buyers can reduce unnecessary entry barriers, divide large contracts where efficient, provide accessible bidding information, and include qualified diverse suppliers in discovery.

A basic spend metric is:

where DSS is diverse-supplier spend share, S_d is eligible spend with verified diverse suppliers, and S_e is total eligible spend during the same period. Pass-through spending should be excluded where a nominal diverse supplier adds no substantive value.

Other indicators include number of active suppliers, bid participation, award rate, retention, development outcomes, and tier-two spend. Counting registrations alone can exaggerate impact because registered firms may receive no meaningful business.

12. Illustrative Case: Selecting an Electronics Supplier

Background

This fictional case concerns Meridian Devices, a European producer of industrial monitoring equipment. It needs an annual supply of control modules for factories in Europe and Southeast Asia. Supply interruption could halt final assembly.

Problem

Twelve firms were discovered through market databases, a trade fair, and industry referrals. Five passed prequalification. Due diligence excluded one firm because it could not establish lawful ownership of essential software, while another withdrew. Three finalists—A, B, and C—were audited and scored on a 0–100 scale.

Analysis

The weighted scores are:

Supplier B ranks first, mainly because of resilience, cost, and diversity performance. Supplier C has the strongest quality and delivery ratings but relies on one production site.

Sensitivity analysis

Supplier B leads C by 3.05 points. If weight is transferred from resilience to quality while other weights remain unchanged, B's advantage changes by (−12 − 35)x = −47x, because B trails C by 12 quality points but leads by 35 resilience points. The approximate switching value is:

Thus, transferring about 0.065 of weight from resilience to quality would produce a near tie. This reveals that the recommendation depends materially on the strategic value assigned to resilience.

Approach and proposed outcome

Meridian selects B as the primary supplier, subject to closure of two minor audit findings and successful production validation. It qualifies A as a secondary source because A uses a different logistics corridor. The contract includes capacity reservation, change notification, audit rights, cybersecurity obligations, continuity testing, and quarterly performance reviews.

Learning points

• Mandatory legal issues should be resolved before weighted scoring.
• TCO and resilience can materially change a price-led decision.
• Sensitivity analysis identifies which assumptions drive the outcome.
• The highest-ranked supplier need not receive all volume; portfolio design can reduce concentration risk.
• Contract controls and post-award monitoring remain necessary after selection.

13. Governance, Technology, and Contemporary Practice

Procurement governance should separate requirement definition, evaluation, approval, and payment responsibilities where practicable. Evaluators should disclose conflicts of interest, preserve bidder confidentiality, use common scoring evidence, and document deviations from the approved process. Gifts, side communications, and undisclosed commissions undermine fair competition and may violate anti-bribery laws.

Digital platforms can automate discovery, screening, document expiry alerts, score consolidation, and performance monitoring. Artificial intelligence can summarize audit records, identify adverse-media patterns, translate documents, and detect anomalies. However, automated outputs may contain false matches, outdated information, or bias against firms with limited digital footprints. Human verification, lawful data use, model monitoring, and an appeal process remain essential.

Contemporary practice increasingly emphasizes continuous monitoring rather than periodic onboarding checks. Relevant signals include ownership changes, cyber incidents, financial deterioration, sanctions updates, environmental events, labor disputes, and sub-tier disruptions. Monitoring intensity should remain proportionate to supplier criticality.

14. Challenges and Best Practices

Supplier evaluation is limited by incomplete data, inconsistent definitions, deliberate misrepresentation, cultural and language differences, model uncertainty, and rapidly changing risk. A precise score may create an illusion of objectivity even when evidence is weak.

Best practice includes:

1. Define requirements and scoring rules before receiving bids.
2. Separate nonnegotiable gates from compensatory criteria.
3. Verify important claims through independent evidence.
4. Evaluate the specific legal entity and production site, not only the corporate brand.
5. Use cross-functional evaluators from procurement, finance, operations, quality, compliance, and sustainability.
6. Assess TCO, resilience, sub-tier dependencies, and implementation risk.
7. Document assumptions and conduct sensitivity analysis.
8. Apply proportionate due diligence and protect supplier information.
9. Link selection findings to contractual controls and corrective actions.
10. Reassess suppliers throughout the relationship.

Chapter Summary

Supplier identification and selection is a structured risk-and-value decision rather than a simple price comparison. Discovery and market mapping create a credible long list, while prequalification removes candidates that fail mandatory requirements. Due diligence verifies legal identity, ownership, integrity, compliance, human-rights, environmental, and cybersecurity conditions.

Capability assessment considers effective capacity, process stability, quality, delivery, scalability, and resilience. Financial ratios provide useful indicators but require trend, industry, and cash-flow interpretation. Audits provide sampled evidence and must be followed by verified corrective action.

TCO analysis captures costs beyond purchase price. Weighted scoring and MCDA methods such as AHP support transparent comparison, but their outputs depend on sound evidence, assumptions, and governance. In AHP, the standard consistency ratio applies only to matrices of order three or greater; two-item reciprocal comparisons are consistent by construction and have no defined standard consistency ratio because the random index is zero. Supplier diversity should expand meaningful opportunity while preserving capability and compliance standards. Final decisions should be sensitivity-tested, documented, contractually controlled, and continuously monitored.

Key Terms

Analytic Hierarchy Process (AHP): A method that derives priorities from pairwise comparisons.

Beneficial Owner: The natural person who ultimately owns or controls an organization.

Capability Assessment: Evaluation of whether a supplier can repeatedly meet operational requirements.

Consistency Ratio: An AHP diagnostic for judgment consistency, defined using the random index for matrices of order three or greater.

Corrective Action: Action addressing the root cause of a verified nonconformity.

Due Diligence: Risk-based investigation and verification of a potential or current supplier.

Effective Capacity: Realistic maximum output after normal operating constraints are considered.

Eligibility Gate: A mandatory condition that must be satisfied for further consideration.

Multicriteria Decision Analysis: A family of methods for evaluating alternatives across multiple criteria.

On-Time Delivery: The percentage of due orders delivered according to a defined timing rule.

Prequalification: Initial screening against minimum supplier requirements.

Process Capability: The ability of a stable process to produce output within specification limits.

Request for Information: A market inquiry used to collect preliminary supplier information.

Resilience: The ability to prepare for, respond to, and recover from disruption.

Supplier Audit: A systematic examination of supplier controls and practices against defined criteria.

Supplier Diversity: Meaningful sourcing participation by qualifying underrepresented, small, local, or social enterprises.

Total Cost of Ownership: The aggregate relevant cost of acquiring, using, managing, and disposing of a product or service.

Weighted-Score Model: A compensatory model that multiplies criterion ratings by weights and sums the results.

Review Questions

Short Answer Questions

1. Distinguish supplier discovery from supplier prequalification.
2. Why should mandatory compliance conditions not be treated as ordinary weighted criteria?
3. Identify four areas of supplier due diligence.
4. What limitations apply when interpreting a supplier's current ratio?
5. Why does an audit not guarantee continuous supplier compliance?

Long Answer Questions

1. Explain how an international buyer should design a risk-based supplier discovery and prequalification process.
2. Discuss the operational, financial, ethical, and regulatory dimensions of supplier due diligence.
3. Evaluate the advantages and limitations of weighted-score supplier selection models.
4. Explain how supplier audits should be planned, conducted, reported, and followed up.
5. Discuss how supplier diversity can be promoted while maintaining fair competition and performance standards.

Analytical / Application Questions

1. Design a supplier evaluation model for a pharmaceutical packaging category, identifying gates, criteria, weights, evidence, and audit requirements.
2. A supplier reports high total capacity but repeatedly misses deliveries. Analyze the additional operational evidence a buyer should request before making an award.
3. Reassess the Meridian Devices case under a strategy that places substantially greater importance on quality than resilience. Explain how sensitivity analysis affects the recommendation.

Multiple Choice Questions with Answers

Question 1

Which activity should normally occur before detailed supplier audits?

A. Prequalification against minimum requirements

B. Automatic award to the lowest bidder

C. Final invoice approval

D. Contract termination

Correct Answer: A. Prequalification against minimum requirements

Question 2

A supplier produces 72,000 units per month against effective capacity of 90,000 units per month. What is utilization?

A. 72%

B. 80%

C. 90%

D. 125%

Correct Answer: B. 80%

Question 3

Which item is most appropriately treated as a mandatory eligibility gate?

A. A small difference in quoted price

B. A preferred packaging color

C. A legally required operating license

D. A slightly faster response time

Correct Answer: C. A legally required operating license

Question 4

A supplier has current assets of $3 million and current liabilities of $2 million. What is its current ratio?

A. 0.67

B. 1.00

C. 1.50

D. 5.00

Correct Answer: C. 1.50

Question 5

Why may a weighted-score model be inappropriate for handling a critical forced-labor finding?

A. Weighted models cannot include numerical ratings

B. The finding should be treated as a noncompensatory gate rather than offset by strengths elsewhere

C. Forced-labor risk affects purchase price only

D. Weighted models require all criteria to have equal weights

Correct Answer: B. The finding should be treated as a noncompensatory gate rather than offset by strengths elsewhere

Question 6

In standard AHP consistency analysis, why is the consistency ratio not calculated for a 2 × 2 reciprocal comparison matrix?

A. Two criteria cannot be compared

B. The principal eigenvalue is always zero

C. The standard random index is zero, making the ratio undefined, and the comparison is consistent by construction

D. AHP requires at least five criteria

Correct Answer: C. The standard random index is zero, making the ratio undefined, and the comparison is consistent by construction

Question 7

Which statement best describes total cost of ownership?

A. It is identical to the supplier's quoted unit price

B. It includes relevant acquisition, logistics, quality, administrative, and risk-related costs on a consistent basis

C. It excludes duties and logistics costs

D. It measures supplier revenue rather than buyer cost

Correct Answer: B. It includes relevant acquisition, logistics, quality, administrative, and risk-related costs on a consistent basis

Question 8

Which evidence most directly strengthens verification of a supplier's process capability?

A. An undated marketing brochure

B. Stable process data linked to specification limits and a validated measurement system

C. The supplier's corporate logo

D. A list of unrelated customers without performance data

Correct Answer: B. Stable process data linked to specification limits and a validated measurement system

Question 9

What is a key limitation of supplier audits?

A. They cannot examine documents

B. They provide sampled evidence for particular sites and times rather than continuous assurance

C. They are useful only for financial analysis

D. They eliminate the need for corrective action

Correct Answer: B. They provide sampled evidence for particular sites and times rather than continuous assurance

Question 10

A buyer spends $4 million with verified diverse suppliers out of $20 million in eligible spend. What is the diverse-supplier spend share?

A. 5%

B. 16%

C. 20%

D. 80%

Correct Answer: C. 20%