What is the purpose of an ongoing supplier performance review in supplier evaluation?

• A. To finalize the initial contract
• B. To exclude new suppliers
• C. To eliminate price checks
• D. To monitor supplier performance over time and adjust sourcing decisions

Answer: (D)

Continuous evaluation of supplier performance tracks how a supplier performs over time against agreed metrics and uses that data to shape purchasing decisions. By defining indicators like on-time delivery, quality, defect rates, lead times, responsiveness, and cost stability, collecting regular data, and reviewing it periodically, you can spot trends, trigger corrective actions, and adjust sourcing—perhaps by renegotiating terms or shifting to other suppliers if needed. This ongoing monitoring is what keeps the supplier base aligned with goals and helps manage risk. It’s not about finalizing the initial contract, which happens earlier; nor about excluding new suppliers, which is part of initial selection; nor about eliminating price checks, since price considerations continue to be evaluated over time.