324 hw questions
High-performing cross-functional supply teams: A. concentrate most of the work at the front-end of the process. B. concentrate most of the work at the back-end of the process. C. rely on a sequential process across functions. D. are useful for every type and dollar value of purchase. E. require close supervision by senior management.
A
The return on assets effect (ROA) quantifies and measures: A. the indirect contribution of supply management to profitability. B. any increase in sales that occurs at a greater rate than the cost of assets. C. reduction in the allocations to the operating budget of the supply department. D. the impact of supply actions on inventory and the balance sheet. E. the effect on profitability of reduced spend compared to a sales increase.
D
The three main inputs of a material requirements planning (MRP) system are: A. a bill of material, a master production schedule, and the inventory record. B. inventory records, annual sales forecast, and a master production schedule. C. required human resources and machine resources, and available resources. D. required manufacturing and human resources, and master production schedule. E. Pareto analysis results, inventory records and a master production schedule.
A
When selecting freight carriers, buyers are most concerned with: A. ability to deliver on-time with no damages. B. types of equipment available. C. intermodal capabilities. D. shipment security. E. geographic coverage.
A
The real costs of quality: A. rise significantly as defects increase in the finished product. B. are easily identified by the accounting department. C. are frequently overstated in an organization. D. are incurred in the quality control department. E. tend to rise significantly with the cost of prevention.
A. rise significantly as defects increase in the finished product.
In FOB Origin: A. the buyer gains title of the goods when the carrier signs at point of destination. B. the buyer gains title of the goods when the carrier signs at point of origin. C. the seller has the responsibility for selecting the carrier. D. the seller has the responsibility for filing any damage claims during transit. E. the carrier holds title of the goods during transit.
B
Subcontracting refers to the practice of: A. an organization hiring a contractor to perform a task it has been doing in house. B. a prime contractor bidding out part of a job to another contractor. C. a prime contractor hiring substitute labor during a strike. D. an organization hiring substitute labor to cover for a supplier's labor shortage. E. a prime contractor bidding on another contractor's incomplete jobs.
B
Overall, the objectives of supply management focus on: A. tactical, transactional and daily activities in the organization. B. operational and strategic issues. C. price, supply availability, and inventory levels. D. internal supply processes and relationships with key suppliers. E. organizational competitive position and profitability.
B
Transportation rates: A. typically decrease as delivery speed increases. B. are established primarily through negotiation. C. typically do not change when smaller shipments are consolidated. D. are lower for LTL than TL shipments. E. are established primarily by government regulation.
B
When the carrying cost of inventory is expressed as a percentage: A. the lower it is, the lower the economic order quantity. B. it is multiplied by the material unit cost to calculate the per unit carrying cost. C. it usually exceeds 57.5 percent per year. D. it must exclude the insurance cost of inventory. E. it is usually the same as the borrowing cost of the organization.
B
In statistical process control (SPC), special or assignable causes of variation: A. have everything to do with the underlying process and can only be eliminated by changing the process. B. are outside and nonrandom problems such as the breakdown of machinery, material variation, or human error. C. are of secondary importance in quality control procedures used to detect and eliminate variation. D. can be present in a process that is fully capable of meeting specifications consistently. E. are intrinsic to the process and will always be there unless the process is changed.
B. are outside and nonrandom problems such as the breakdown of machinery, material variation, or human error.
The size and activities of the supply function in a single business unit organization will depend on: A. the size of the company B. the nature of the company's business. C. the size of the company and the nature of the company's business. D. the preference of the owner or president of the business. E. the preference of the supply manager.
C
When a commercial janitorial service company predicts demand for janitorial services using commercial building permits issued, office leasing and vacancy rates, this is an example of: A. a qualitative forecasting technique. B. a time series forecasting technique. C. a causal model. D. a repetitive pattern modeling tool. E. a deterministic model.
C
When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of: A. a causal model. B. a deterministic model. C. a qualitative model. D. a time series forecasting technique. E. a repetitive pattern technique.
D
A mode of transportation is: A. a transportation provider that moves goods and/or passengers. B. the means by which tangible goods gain mobility. C. a private business that trucks goods from point A to B. D. Burlington Northern Santa Fe Railway (BNSF). E. the means by which people, freight or information gain mobility.
E
Outsourcing of service is: A. decreasing because buyers are dissatisfied with most third party service providers. B. increasing because it is easy to define service requirements and measure quality. C. unrealistic because of the difficulty in measuring service providers' performance. D. realistic because of the ease in measuring service providers' performance. E. realistic if service requirements and quality expectations can be clearly defined.
E
Supply can provide an uninterrupted flow of materials, supplies and services by: A. holding large inventories. B. holding small inventories. C. standardizing capital equipment, materials, MRO and services. D. b and c E. a and c
E
Determination of the "best buy" is based on: A. technical considerations only. B. a balance between price and quality. C. suitability for a given use. D. the internal user or specifier's perceptions. E. trade-offs among stakeholders (e.g., marketing, operations, and supply.)
E. trade-offs among stakeholders (e.g., marketing, operations, and supply.)
The degree of purchasing centralization is reflected by: A. the number of engineers with purchasing authority. B. the number of supply professionals dispersed throughout the organization. C. the percentage of spend managed or controlled by corporate supply. D. the percentage of spend managed or controlled by business units. E. the amount of spend that is outsourced.
C
Non-core competencies of an organization are typically: A. flexible and easily changed depending on who is in charge. B. dependent on the staff performing the tasks. C. the same for companies in the same industry. D. the first things to be outsourced to access supplier expertise. E. seldom outsourced because they contribute to competitive advantage.
D
Internal business partnerships between supply and other functional areas such as marketing/sales, finance/accounting, operations and engineering are: A. easily developed because all functional areas share goals and metrics. B. difficult to develop because supply has little impact on organizational goals. C. desirable because of the interdependencies between and among functions. D. unimportant because one area has no impact on the others. E. not worth the time it takes to develop them.
C
Anticipation inventories are carried: A. to permit activities on either side of a major process. B. to stock the distribution pipelines. C. to protect against uncertainties in supply and demand. D. to cover a well-defined future need. E. to protect against machine breakdown.
D
Decreasing logistics costs may be attributed to: A. deregulation of the transportation sector. B. technology advances and e-commerce. C. an increase in global supply chains. D. A and B. E. B and C.
D
In FOB Destination, Freight Collect and Allowed: A. the buyer gains title at point of destination, and buyer pays and bears the freight charges. B. the seller holds title of the goods during transit, and buyer pays and bears the freight charges. C. the carrier holds title of the goods during transit, buyer pays and seller bears the freight charges. D. the seller holds title of the goods during transit and bears the freight charges, but buyer pays the freight charges. E. the buyers gains title at point of origin, and pays the freight charges, but seller bears the freight charges.
D
Outsourcing is: A. a low risk venture because global suppliers have almost unlimited capabilities. B. a high risk venture because the decision makers' reputations are at stake. C. a low risk venture because the costs of reversing the decision are low. D. a high risk venture because the costs of reversing the decision are often high. E. a moderate risk venture because it is easy to determine core competencies.
D
Some of the concerns about outsourcing are: A. supply's ability to provide the required inputs at the right quality and price. B. losing long-term buyer-supplier relationships and cost advantages. C. transitioning from supplier's operations to internal operations. D. layoffs, exposure to supplier's ricks, and loss of control. E. loss of a lean enterprise as the supply base grows.
D
A transportation strategy should include consideration of: A. safety on the ground, in the air and on water. B. environment factors such as pollution. C. consolidation of freight. D. alternative transport modes. E. all of the above.
E
Deciding what represents a core competency in an organization is: A. always the same for companies in the same industry. B. a decision best left to the organization's Board of Directors. C. a decision best left to the Chief Executive Officer. D. a fairly easy decision once organizational goals and objectives are known. E. often a fairly complex decision and a function of many factors.
E
One of the most fundamental and critical decisions in any organization is, should we: A. have a single source or multiple for a specific purchase? B. form a strategic partnership with a single source or split the order to foster competition? C. order small quantities to avoid carrying costs or large quantities for volume discounts? D. source locally or globally? E. make or buy the needed good or service?
E
Organizations operating under a just-in-time system, require: A. international coverage. B. heightened security. C. real-time package tracking. D. lowest price. E. on-time deliveries.
E
Supply may contribute to the containment of the costs of poor quality by addressing: A. appraisal costs. B. internal costs. C. external costs. D. prevention costs. E. all of the above.
E. all of the above.
For an organization with revenue of $60,000,000, purchases of $40,000,000, and profit of $5,000,000 before tax, a 10 percent reduction in purchase spend would result in an increase in profit of: A. 80% B. 75% C. 50% D. 35% E. 10%
A
A material requirements planning (MRP) system: A. requires explosion of the bill of material as the basis of planning. B. is easily carried out without technology. C. minimizes the use of data. D. maximizes inventory. E. controls the "A" items
A
Demand for buttons and zippers at a sportswear manufacturer is an example of: A. scheduled demand. B. independent demand. C. Dependent/ derived demand. D. buffer demand. E. anticipated demand.
C
A third party logistics (3PL) services provider: A. a subcontractor working with a prime logistics services provider. B. is a separate entity that provides management of inbound and outbound goods. C. handles only administrative tasks such as auditing and billing. D. is a separate company from the buyer's and supplier's organizations. E. handles physical movement of goods, but does not perform administrative tasks.
D
Which of the following is not the reason to make? A. To reduce risk. B. To preserve technological secrets. C. The purchase option is too expensive. D. Lack of production capacity. E. To avoid sole-source dependency.
D
Outsourcing: A. is a low risk venture because the firm can always revert back to performing the function in-house at low cost. B. decisions are based on financial factors that most organizations can easily access through their accounting system. C. may reduce or control operating costs, improve focus on core competencies, and gain access to world-class capabilities. D. usually results in increased hiring to attain expertise that the organization does not already possess. E. occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing.
C
Supply has the potential to contribute to A. profitability. B. profitability and competitive position. C. profitability, competitive position and corporate social policy. D. competitive position and corporate social policy. E. none of the above.
C
When a team decides that a task or function currently performed by company employees is a noncore competency, the team is likely to recommend: A. continuing to make B. insourcing C. outsourcing D. privatizing E. continuing to buy
C
Which statement is most accurate when thinking about deciding how much to buy: A. forecasts of future demand, lead times, and prices are usually fairly accurate. B. the costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy. C. balancing price, volume, carrying cost, and the cost of stockouts is key to successfully determining how much to buy at any point in time. D. managers seldom make purchase decisions until they are absolutely sure of the volume required. E. the price premium to attain the desired quantity is usually less than the costs of not having materials available when needed.
C
A six sigma (6σ) approach to quality: A. has no connection to the concept of zero defect. B. means there are no more than 6 defects per million opportunities C. focuses on preventing defects by using data to reduce variation and waste. D. has soft goals such as happier customers and employees. E. was developed by Japanese companies in the 1950s.
C. focuses on preventing defects by using data to reduce variation and waste.
An external failure cost is: A. returns to suppliers. B. lost labor. C. warranty costs. D. scrap and rework costs. E. all of the above.
C. warranty costs.
On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $130. If the inventory carrying cost is 20 percent per year and assuming no ordering costs: A. buying 100 at a time will save the company $2,130 per year. B. buying 100 at a time will lose the company $840 per year. C. buying 100 at a time will save the company $2,260 per year. D. buying 100 at a time will save the company $3,600 per year. E. buying 100 at a time will save the company $1,260 per year.
A
ISO 9001:2008 provides a tested framework for a systematic approach to consistently delivering product that satisfies customers' expectations by: A. providing a set of standardized requirements a quality system must meet. B. assuming all national cultures will meet quality requirements the same way. C. dictating scope and flexibility for quality system implementation. D. assuming all business sectors will meet quality requirements the same way. E. dictating how quality requirements should be met in every organization.
A. providing a set of standardized requirements a quality system must meet.
Which of the following techniques are used for continuous improvement? A. Pareto charts. B. Cause-and-effect diagrams. C. Process control charts. D. All of the above.
D. All of the above.
Total quality management (TQM) tools include A. vendor-managed inventory. B. statistical process control (SPC). C. quality function deployment (QFD). D. B and C. E. A, B, and C.
D. B and C.
Which of the following statements about process quality control is NOT true? A. An observation outside the control limits is an example of a special cause of variation. B. Assignable cause variation is also referred as special cause variation. C. The control limits will include 99.74% of the population under the normal probability distribution assuming that the process is in control. D. Common cause variation can be eliminated from the process by removing the potential causes.
D. Common cause variation can be eliminated from the process by removing the potential causes.
Company image may be directly influenced by: A. treating suppliers in a fair and equitable manner. B. complying with regulatory requirements C. labor, environmental, and ethical practices of suppliers. D. none of the above. E. a, b and c.
E
Outsourcing or using third party logistics services has: A. become increasingly popular with small organizations, but not larger ones. B. declined in popularity due to declining service provider performance. C. declined as transportation has been re-regulated. D. remained flat due to increased challenges of international logistics. E. increased as organizations focus on core competencies.
E
Decoupling inventories are carried: A. to cover a well-defined future need. B. to protect against machine breakdown. C. to protect against uncertainties in supply and demand. D. to permit activities on either side of a major process. E. to stock the distribution pipelines.
d