Doron Ltd Has Just Computed the Supplier Performance Index (SPI)

Doron Ltd has just computed the supplier performance index (SPI) of the company's two suppliers, Xema and Zetta. Xema's SPI is 2.11 and Zetta's SPI is 0.99. Which of the following statements is correct?

A) Xema is a preferred supplier because it has a higher SPI than Zetta.
B) Xema is a preferred supplier because its SPI is greater than 1.0.
C) Both suppliers are considered poor quality suppliers, because their SPI is higher than 0.50.
D) The SPI indices suggest that for every $1 purchase price, Doron has to incur $2.11 supplier activity costs for Xema and $0.99 activity costs for Zetta.

Correct Answer:

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