C_ARSUM Ariba Supplier Management Practice Question
What is the function of the 'Preferred Supplier' flag in the SAP Ariba Supplier Management system?
⚠ Common exam trap
Candidates often assume the 'Preferred Supplier' flag is an automatic status granted by the system, rather than a strategic designation that requires active management by procurement category owners.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
It identifies suppliers that are strategic partners for specific categories.
The 'Preferred Supplier' flag acts as a critical signal to users across the Ariba network, indicating that a supplier has met the organization's high standards. By highlighting these vendors, the system steers spend toward vetted, strategic partners. This reduces risk, improves supply chain reliability, and ensures that the organization benefits from negotiated rates and favorable terms established through formal, enterprise-wide category management strategies.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
It automatically discounts the supplier's prices by 5% in sourcing events.
Why it's wrong here
The flag is an indicator of status and strategy, not a pricing engine. Automatically applying price discounts would violate accounting principles and procurement ethics. Any price advantages must be negotiated through contracts and reflected in the catalog or event-based pricing models, not through a simple status flag in the supplier profile.
- ✓
It identifies suppliers that are strategic partners for specific categories.
Why this is correct
The flag is specifically intended to signal that a supplier is a preferred choice for given categories. This helps stakeholders identify which vendors the company wants to prioritize for sourcing and procurement, ensuring that purchasing activity is aligned with the broader procurement strategy and negotiated partnership agreements.
- ✗
It hides all other suppliers from the user's search results.
Why it's wrong here
Hiding all other suppliers would severely limit the organization's ability to conduct competitive bidding or find alternative sources during shortages. The flag is a visual cue to guide selection, not a filtering mechanism that restricts the user's ability to search the entire vendor database for available options.
- ✗
It bypasses the mandatory risk assessment for the supplier.
Why it's wrong here
Bypassing risk assessment for any supplier, regardless of status, is a major compliance violation. Even preferred suppliers must maintain their risk profiles and compliance certifications. The flag has no technical impact on the enforcement of security and compliance policies, which are applied consistently across all vendors in the system.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official SAP exam blueprint
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