Exam 1

Purchasing can be broadly classified into two categories: merchants and industrial buyers. a. True b. False

a. True

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries. a. True b. False

a. True

The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers. a. True b. False

a. True

Trucking companies, airfreight shipping companies, and information system providers can all be considered service providers to the supply chain. a. True b. False

a. True

The term Supply Chain Management and the field of study it represents today seems to have emerged in the: a. 1970's b. 1980's c. 1960's d. 1990's

b. 1980's

Reverse logistics has become an important trend in ethical and sustainable sourcing. a. True b. False

b. False

Total Cost of Ownership does NOT consider which of the following factors? a. Tooling costs b. Freight costs c. Payment terms d. Purchase order costs

d. Purchase order costs

A fair trade product refers to one that is manufactured or grown by a disadvantaged producer in a developing country that receives for its goods. a. Freedom of association b. A fair price c. Bitcoin d. An imported product

b. A fair price

Generally, firms outsource noncore activities while focusing on core competencies. a. True b. False

a. True

As companies outsource more and more parts, it becomes easier to achieve cost savings internally. a. True b. False

b. False

Which company is experimenting with the management of the final mile of delivery in some markets, using small aerial drones to deliver shoebox-size packages from fulfillment centers? a. FedEx b. Amazon c. Zappos d. UPS

b. Amazon

If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease. a. True b. False

b. False

In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to more than 1.00 and less than 100. a. True b. False

b. False

It is best for firms to learn through their own experiences the methods and tools that work the best, rather than benchmarking. a. True b. False

b. False

It is considered unethical for a firm to intentionally buy from women-owned businesses. a. True b. False

b. False

It is critical that buyers and suppliers develop stronger relationships and partnerships based on a tactical rather than a strategic perspective. a. True b. False

b. False

It is illegal for corporations to provide their suppliers appreciation banquets to award performance. a. True b. False

b. False

Many large firms are moving to in-house vertically integrated structures where they have more control over each business unit. a. True b. False

b. False

Supply chain management activity includes managing the various compensation and benefit programs within an organization. a. True b. False

b. False

The Total Cost of Ownership Concept does NOT include quantitative factors. a. True b. False

b. False

The foundation elements of supply chain management are Supply. Operations, Customer Service, Logistics. a. True b. False

b. False

Merchants primary task is to purchase raw materials for conversion purposes. a. True b. False

b. False Merchant buyers, includes the wholesalers and retailers who primarily purchase for resale purposes. Generally, merchants purchase their merchandise in volume to take advantage of quantity discounts and other incentives such as transportation economy and storage efficiency. Industrial buyers' primary task is to purchase raw materials for conversion purposes. Industrial buyers also purchase services, capital equipment, and MRO supplies. MRO: Maintenance, Repair, and Operations

Which of the following is NOT a typical strategy for firms to obtain benchmarking data about other companies? a. Collecting published trade information on benchmarking studies b. Hiring former employees from other companies and assessing their knowledge c. Utilizing resources from the Center for Advanced Purchasing Studies d. Discussing sourcing strategies with colleagues at business association meetings

b. Hiring former employees from other companies and assessing their knowledge

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT: a. Performance metrics b. Individualized objectives c. Mutual benefits and needs d. Personal relationships

b. Individualized objectives

Which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers? a. Overseas supplier holding the patent to the product b. Lower shipping rates due to lower tariffs c. Lower product cost d. Better product quality

b. Lower shipping rates due to lower tariffs

According to the textbook, supply chains include raw material suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors, retailers and end-product consumers. a. True b. False

a. True

Cost savings is an advantage of using an e-procurement system. a. True b. False

a. True

Creating strategic supplier alliances benefits firms by increasing the performance and value of suppliers as well as increasing brand awareness. a. True b. False

a. True

Environmental supplier certifications can be used to identify rogue suppliers before they can cause problems. a. True b. False

a. True

Foreign suppliers located farther away may be able to deliver goods faster than domestic suppliers due to more efficient transportation and logistical systems. a. True b. False

a. True

Functional products are characterized by low profit margins, relatively stable demands, and high levels of competition. a. True b. False

a. True

One definition of supply chain management is " Coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers." a. True b. False

a. True

Procurement credit cards can be used for small purchases including meals, lodging, and travel expenses. a. True b. False

a. True

Rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program. a. True b. False

a. True

The procedures for public procurement differ from the private sector. a. True b. False

a. True

The purchase order is NOT a legally binding contract until it is accepted by the supplier. a. True b. False

a. True

A material requisition and a purchase requisition are the same thing. a. True b. False

a. True b. False

Which of the following terms refers to an act that creates the greatest good for the greatest number of people: a. Utilitarianism b. Social sustainability c. Corporate responsibility d. Rights and duties

a. Utilitarianism

The Ethical Trading Initiative (ETI) does NOT include which of the following: a. Workers receive a 30 minute break for an 8 hour shift b. Regular employment is provided c. Freedom of association and the right to collective bargaining are respected d. Working hours are not excessive

a. Workers receive a 30 minute break for an 8 hour shift

Which of the following could be an ethical and environmental certification requirement? a. Forest Stewardship Council (FSC) certification b. Energy Star certification c. Fair Trade certification d. All of these

d. All of these

Which of the following is a trend in ethical and sustainable sourcing? a. Using suppliers who are reducing their carbon footprint b. Discontinuing purchases from firms that use unacceptable labor practices c. Reducing the number of delivery miles traveled d. All of these

d. All of these

Which of the following can happen as a result of the bullwhip effect? a. Increase in defective products b. Decreased levels of safety stock c. Quicker distribution to warehouses d. Excess costs for each firm in a supply chain

d. Excess costs for each firm in a supply chain

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software. a. True b. False

a. True

Supply chain management is concerned about how suppliers' products are designed, produced, and transported. a. True b. False

a. True

Sustainable sourcing takes into account the long-term impact on people, profits, and the planet. a. True b. False

a. True

The bullwhip effect causes an amplification of the variation in the demand pattern along the supply chain. a. True b. False

a. True

One operational method for managing inventory is the implementation of a software system which can be referred to as: a. Demand process reengineering (DPR) b. Inventory sourcing (IS) c. Material requirements planning (MRP) d. Demand capacity tracking (DCT)

c. Material requirements planning (MRP)

Benefits derived from implementing e-procurement systems include all of the following EXCEPT: a. Tracking bids and transactions is easier and faster b. Increases the accuracy in communication between buyers and suppliers c. Allows buyers to submit bids and suppliers to respond to those bids in real time d. Creates numerous additional job opportunities in the purchasing department

d. Creates numerous additional job opportunities in the purchasing department

Expediting

The act of contacting the supplier to speed up an overdue shipment.

More than 50% of each sales dollar typically goes towards covering supply chain costs. (T/F)

True

Encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as: a. Progressive procurement b. Supplier management c. Supply chain performance management d. Right-shoring

b. Supplier management

Sustainability reporting is ______________ for American companies: a. Required in the U.S. b. Mandated quarterly c. Largely a voluntary effort d. Required every 3 years

c. Largely a voluntary effort

Companies outsource to help them reach their sustainability goals. a. True b. False

a. True

A low ROA suggests that management is capable of generating large profits with relatively small investments. a. True b. False

a. True

Benchmarking is the practice of watching the mistakes other businesses do and trying to avoid the same mistakes. a. True b. False

b. False

Benchmarking is: a. A practice where companies attempt to learn and apply the best practices of other companies. b. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A system of performance metrics that seeks to motivate suppliers to perform better.

a. A practice where companies attempt to learn and apply the best practices of other companies.

According to the textbook, a supply chain's end customers are the only true source of income for all supply chain organizations. a. True b. False

a. True

The main benefit(s) from benchmarking sourcing practices is/are: a. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies. b. Savings in energy consumption and materials, lower distribution costs, and improved corporate image among regulators, customers and community. c. Larger market for products, economies of scale in purchasing and production, and lower labor costs. d. Lower prices of goods and services, use of fewer buyers and lower administrative costs

a. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies.

According to the textbook, conditions which must be present for successful supply chain management include: a. Cooperation among firms b. Corporate contracts regarding performance expectations c. Short-term company focused performance d. Vertical Integration

a. Cooperation among firms

If the break-even point in a typical make-buy scenario is 19,000 units and 10,000 units are required by the firm, then the firm should choose to make the units. a. True b. False

a. False

According to the textbook, the order of product & service flow is as follows: a. Raw material supplier, component manufacturer, end product manufacturer, wholesale distributor, retailer, end-product consumer b. Raw material supplier, retailer, component manufacturer, wholesale distributor, end product manufacturer, end-product consumer c. Component manufacturer, raw material supplier, retailer, wholesale distributor, end product manufacturer, end-product consumer d. Raw material supplier, component manufacturer, retailer, wholesale distributor, end product manufacturer, end-product consumer

a. Raw material supplier, component manufacturer, end product manufacturer, wholesale distributor, retailer, end-product consumer

Summers, Inc. needs to generate a list of good/services purchased per supplier. Which type software program can the manager consult to obtain this information? a. SRM b. SCSS c. ISO 9000 d. MRP

a. SRM

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Select the key dimensions of performance based on what is important to the end consumer b. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score c. Evaluate each of the performance measures on a rating between zero and one-hundred d. The weights for all dimensions must sum to 1 or 100%

a. Select the key dimensions of performance based on what is important to the end consumer

Which of the following statements is TRUE? a. Strategic partnerships are seen as one of the foundations of supply chain management b. Purchasing is seen as the final and most difficult step in the supply chain c. Service response logistics is the digital distribution of services d. Supply chain management was invented by the auto manufacturing industry

a. Strategic partnerships are seen as one of the foundations of supply chain management

Which of the following activities allows buyers to assume the supplier will meet certain product quality and service requirements? a. Supplier certification b. Distribution network c. Right-shoring d. Business process reengineering

a. Supplier certification

ISO 14000 may play a role in a firm's. a. Supplier certification program b. Negotiated pricing program c. Manufacturing flexibility program d. Customer certification program

a. Supplier certification program

Convincing your supplier to cutting back on packaging, fuel, or electricity is an example of: a. Sustainable sourcing b. Ethical sourcing c. Sole sourcing d. Global sourcing

a. Sustainable sourcing

A practice aimed at ensuring that purchased products or materials meet environmental objectives of the organization is referred to as green purchasing. a. True b. False

a. True

According to the text, supply chain management will involve cultural change among most or all of the participants. a. True b. False

a. True

The continuing cycle of erratic demand causing forecasts to include safety stock which in turn magnify supplier forecasts and cause production planning problems is known as: a. Back-shoring b. Bullwhip effect c. Process integration d. Supply chain management

b. Bullwhip effect

SRM software can automate procurement activities that lead to significant cost savings as purchasing professionals move toward: a. Diversifying their hiring b. Collaborative planning c. Improving capacity d. Expediting each order

b. Collaborative planning

Which of the following is NOT important in developing a successful strategic alliance? a. Developing performance metrics b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Open lines of communication that both promote sharing and secure confidentiality d. Developing cross-functional team capabilities externally and within the company

b. Developing efficient processes that will remain unchanged for the duration of the partnership

According to the textbook, environmental and social impacts are considered outside of supply chain management. a. True b. False

b. False

As described in the text, a "fair trade product" refers to selling and purchasing products without a cash transaction. a. True b. False

b. False

Which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance? a. Participating in value engineering/value analysis efforts b. Lowering inventory turnover rates c. Creating supplier alliances d. Improving time to market

b. Lowering inventory turnover rates

Some businesses refer to sustainability in terms of supporting the three P's. This stands for: a. Planet, people, price b. People, planet, profit c. People, place, price d. Place, price, promotion

b. People, planet, profit

Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

b. Post-transaction costs

Which of the following refers to the measurement of the impact of change in purchase spend on a firm's profit before taxes, assuming gross sales and other expenses remain unchanged? a. Direct Offset b. Profit-Leverage Effect c. Break-Even Analysis d. Leveraging Purchase Volume

b. Profit-Leverage Effect

According to the SCM profile Honda ___________ based on a supplier relations index developed by Planning Perspectives. a. Ranked lower in 2015 than 2014 b. Ranked near the top in 2015 c. Ranked fifth in 2015 d. Ranked near the bottom in 2015

b. Ranked near the top in 2015

Inventory Turnover can be calculated by: a. Ratio of average inventory cost over cost of goods sold b. Ratio of cost of goods sold over average inventory cost c. Ratio of average inventory cost over inventory days in stock d. Ratio of inventory days in stock over average inventory cost

b. Ratio of cost of goods sold over average inventory cost

When a product is purchased which is complicated or highly technical a ______________may be issued instead of a request for quotation. a. Purchase order b. Request for proposal c. Sales order d. Contract for sale

b. Request for proposal

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as: a. Supply Management b. Supplier Certification c. Quality Systems Certification d. Supplier Inspection

b. Supplier Certification

Which of the following can be defined as "The ability to meet the needs of current supply chain members without hindering the ability to meet the needs of future generations". a. Enterprise resource planning b. Sustainability c. Strategic partnerships d. Reverse logistics

b. Sustainability

According to the text, the goal of a good performance evaluation system is to provide metrics that are: a. Understandable, qualitative, focused on short-term results b. Understandable, easy to measure, focused on value-added results c. Understandable, quantitative, focused of cost-related results d. Understandable, quantitative, focused on quality-related results

b. Understandable, easy to measure, focused on value-added results

Supply chain management includes the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes: a. Human resources and job design b. Program evaluation and review techniques. c. Coordination and collaboration with channel partners d. Selling and marketing products

c. Coordination and collaboration with channel partners

Promoting diversity by intentionally buying from small firms or ethnic minority businesses is an example of: a. Sustainable sourcing b. Supply base rationalization c. Ethical sourcing d. Supply base sourcing

c. Ethical sourcing

Customer relationship management, distribution network, transportation management, and service response logistics are all important issues that are most closely related to: a. Purchasing b. Integration c. Logistics d. Manufacturing

c. Logistics

Which of the following is a reverse logistics activity: a. Managing the quality of products b. Delivering finished goods to your customer c. Recycling products and components d. Developing a collaborative relationship with your supplier

c. Recycling products and components

Which of the following is a reason for favoring single sourcing? a. Encourages competition among suppliers b. Reduces information about new processing technologies c. Reduces variabilities in quality levels d. Spreads the risk of supply interruption

c. Reduces variabilities in quality levels

Which of the following is NOT a potential challenge for global sourcing? a. Labor and legal problems b. Long delivery lead times c. Relaxed trade barriers d. Costs involved in selecting foreign suppliers

c. Relaxed trade barriers

Why do firms assess their sourcing capabilities? a. They are looking for ways to reduce their employee headcount b. They can easily spot suppliers who are not practicing sustainable sourcing practices c. They can gauge their success in improving their own value-enhancing contributions to the firm d. All of the above

c. They can gauge their success in improving their own value-enhancing contributions to the firm

What type of major cost category is considered in the cost associated with placing and receiving the order? a. Pre-transaction Cost b. Turnover Cost c. Transaction Cost d. Supplier-Development Cost

c. Transaction Cost

Which of the following is TRUE? a. 3PL stands for Third Party Leverage b. 3PL stands for Three Point Logistics c. VMI stands for Vendor Managed Inventory d. VMI stands for Vertically Managed Inventory

c. VMI stands for Vendor Managed Inventory

Successful strategic supplier alliances can result in which of the following? a. Better market penetration. b. Access to new technologies and knowledge c. Higher return on investment d. All of these

d. All of these

Which of the following can be used as a punishment for suppliers that perform poorly? a. Elimination of future business with the focal firm b. Downgrade the supplier's status c. Billback penalty d. All of these

d. All of these

Which of the following is important in developing successful relationships in a partnership? a. Commitment by top management b. Interpersonal business relationships between employees of the companies c. Mutual/compatible needs that result in a win-win situation for the partners d. All of these

d. All of these

Leading companies practicing sustainable sourcing and seeking to reduce costs would NOT use which of the following strategies? a. Rethink transportation and distribution systems b. Avoid use of noncompliant suppliers c. Increase resource efficiencies d. Backward integration to purchase suppliers

d. Backward integration to purchase suppliers

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT: a. Global population growth b. Increasing environmental awareness c. Consumers' desires for better corporate responsibility d. Legislation requiring corporate ethical and sustainable sourcing

d. Legislation requiring corporate ethical and sustainable sourcing

According to the text, one of the most basic and successful approaches to protecting trade secrets is: a. Threat of litigation b. Working with law makers to increase fines and sentences for those that steal trade secrets c. Requiring employees and partners to get ISO 9000 certified d. Requiring employees and vendors to sign non-disclosure agreements

d. Requiring employees and vendors to sign non-disclosure agreements

Which of the following is a reason that single sourcing is considered risky/bad? a. Decreases the item to item quality variability of items purchased b. It could establish close relationships with the supplier c. Larger orders make quantity discounts more likely d. There could be supplier interruptions due to political instability

d. There could be supplier interruptions due to political instability

Which of the following is NOT a reason for supplier recognition programs? a. To help suppliers' reputation in the marketplace b. To reward suppliers for excellent performance c. To encourage suppliers to be more innovative d. To select the best suppliers

d. To select the best suppliers

Sustainable sourcing policies should include which of the following? a. Use of minority workers b. Use of child labor c. Fair working conditions d. Use of renewable energy

d. Use of renewable energy

The use of ethical and environmental certifications for suppliers is decreasing. a. True b. False

b. False

The total cost analysis demonstrates how other costs besides the unit cost can affect purchase decisions. a. True b. False

a. True

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about: a. 10% of their time on expediting orders b. None of the these c. 30% of their time on expediting orders d. 20% of their time on expediting orders

a. 10% of their time on expediting orders

Which of the following would be considered a third party provider? a. A firm that leases storage warehousing b. An end product manufacturer c. A Raw materials supplier d. An intermediate component manufacturer

a. A firm that leases storage warehousing

For a large company with many strategic supplier alliances, what would be the best way to manage them? a. Create an alliance board to oversee alliances b. Reduce the number of supplier alliances to less than five c. Hire an outside firm to manage them d. All of the above

a. Create an alliance board to oversee alliances

Which of the following activities would fall under the foundational element of operation? a. Demand management b. Third-party logistics services c. Distribution network d. Supplier management

a. Demand management

The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier. How often do they give this award? a. Every 5 years b. Every 6 months c. Every year d. Every 10 years

a. Every 5 years

While most public procurement is focused on goals like those of purchasing departments in the private sector, U.S. federal government purchases must comply with the: a. Federal Acquisition Regulation b. Services and Materials Acquisition Act c. Fair Standards and Equitable Purchases Act d. Federal Code of Conduct for Procurement

a. Federal Acquisition Regulation

The use of environmental supplier certification programs assists companies by which of the following? a. Identifying strategic alliance candidates b. Identifying companies who are the most popular with consumers c. Helping communities who are in jeopardy of plant closures d. All of the above

a. Identifying strategic alliance candidates

Costs associated with investigating alternative suppliers and investigating alternative delivery options can be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

a. Pre-transaction costs

An internal or external event that causes a disruption or failure of supply chain operations is an example of a. Bull-whip effect b. Six Sigma quality management c. Supply chain risk d. Back-shoring

a. Supply chain risk

A seven-step approach to supplier development might include identifying critical suppliers not meeting performance requirements. a. True b. False

a. True

According to the text, only about half of companies recognize excellent performance with supplier awards and appreciation banquets. a. True b. False

a. True

Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception. a. True b. False

a. True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs. a. True b. False

a. True

Developing a collaborative negotiation infrastructure includes four steps: build a preparation process, develop a negotiation database, design a negotiation launch process, and institute a feedback mechanism. a. True b. False

a. True

Firms assess their sourcing capabilities because the sourcing function is one of the most value-enhancing functions in an organization. a. True b. False

a. True

Highly valued customers with large purchasing budgets who achieve moderate supply chain management success have been known to lower purchasing and inventory carrying costs, and create better quality products with higher levels of customer service. a. True b. False

a. True

ISO 14000 is a family of international standards for environmental management. a. True b. False

a. True

It is important for firms to addresses the impact of ethical and sustainable sourcing on other facets of the organization and its trading partners. a. True b. False

a. True

Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for other suppliers to follow. a. True b. False

a. True

The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered elements of operations. a. True b. False

a. True

There are two approaches to deciding whether or not an action is ethical. The first approach is utilitarianism. The second approach is rights and duties. a. True b. False

a. True

Unless an organization has a firm grasp of the key issues surrounding supplier relationships, it cannot reap the benefits of such relationships. a. True b. False

a. True

Which of the following would be a good reason to outsource (buy) versus making? a. To utilize existing capacity within a company's own firm b. A firm lacks the technology or expertise to produce an item c. To have more direct control over the design and production of an end item d. No competent supplier presently produces the needed item

b. A firm lacks the technology or expertise to produce an item

When a particular item is in short supply accompanied by rising prices, a firm might find it beneficial to: a. Discontinue buying the product and focus more on cheaper products. b. Align itself with one of the suppliers to ensure a continued supply of the scarce item. c. Purchase the item from a manufacturer who cuts corners and provides a product below market price. d. All of these

b. Align itself with one of the suppliers to ensure a continued supply of the scarce item.

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Develop a performance measurement system b. Certify suppliers as ISO 9001 compliant c. Prioritize items based on ethical and sustainability opportunities and ease of implementation. d. Establish corporate ethical and sustainable sourcing policies

b. Certify suppliers as ISO 9001 compliant

According to the textbook, Supplier Recognition Programs: a. Are difficult to implement b. Encourage suppliers to keep their performance high c. Are generally not very effective d. Are used by 90% of companies

b. Encourage suppliers to keep their performance high

A SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization. a. True b. False

b. False

According to the textbook, in the 1950's and 1960's, mass production techniques focused on creating supplier partnerships, improving process design and flexibility, and improving product quality. a. True b. False

b. False

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier. a. True b. False

b. False

The universally accepted definition of supply chain management is "the management and integration of the parties involved in producing the end items coveted by consumers." a. True b. False

b. False

There are just a small number of resources available for firms seeking to learn about and implement successful sourcing practices. a. True b. False

b. False

Trends in supply chain management include expansion of the supply chain and decreasing supply chain visibility. a. True b. False

b. False

When developing successful partnerships, it is best to avoid inter-personal business relationships between buyers and suppliers. a. True b. False

b. False

Transactional SRM, allows the company to analyze the complete supplier base. a. True b. False

b. False (Analytical SRM)

Sustainable sourcing practices include promoting diversity by intentionally buying from ethnic minority businesses. a. True b. False

b. False (Ethical Sourcing)

In a Total Cost of Ownership system, certification and training of suppliers would be considered post-transaction costs. a. True b. False

b. False (Pre-transactional cost)

Which of the following is NOT a form of countertrade? a. Barter b. Kaizen blitz c. Offset d. Counterpurchase

b. Kaizen blitz

Petty cash is being phased out in favor of: a. A blank check b. P-card c. Score-carding d. Hard cash

b. P-card

Firms can use total cost analysis to: a. See how efficiently management is using its total assets to generate profits b. Select the most cost-effective supplier c. Brainstorm and isolate the causes of a problem d. Show how many times a firm's inventory is utilized and replaced over an accounting period

b. Select the most cost-effective supplier

Which of the following is a reason small value purchases are handled differently? a. To give the buyer additional supplier choices b. To control unnecessary administrative costs c. To have better tracking of material usage d. To obtain a higher quality product

b. To control unnecessary administrative costs

In designing an ethical and sustainable strategy a firm might make use of which of the following? a. Hire more supervisors to address problems quickly b. Use performance measures to identify weaknesses c. Create many short term relationships with suppliers d. All of these

b. Use performance measures to identify weaknesses

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.40), Cost(0.30).The scores for each category are shown below. Which of the following companies has the highest total score? a. Company A: Quality(90), Delivery(80), Cost(60) b. Company B: Quality(70), Delivery(80), Cost(80) c. All companies scored the same. d. Company C: Quality(70), Delivery(95), Cost(60)

c. All companies scored the same. (the computer thinks Company C is the correct answer.. don't know what to think of that.)

The following is an example of the bullwhip effect: a. Barkley's produces a defective product and thus realizes an excessive increase in consumer returns b. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers d. Barkley's products are so successful that it adds a new retailer for distribution

c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers

According to the text, which of the following is considered a current trend in supply chain management? a. Using supply chain analytics b. Increasing supply chain visibility c. Both A and B d. None of these

c. Both A and B

Which of the following is TRUE? a. SRM software modules are very affordable (less than $50,000) and can be implemented with a week. b. The key to successful partnerships is developing performance measures with weights greater than 3.50. c. Performance metrics and personal business relationships are both keys to building successful partnerships. d. ISO 75000 is the supplier award given to the highest rated supplier in Japan.

c. Performance metrics and personal business relationships are both keys to building successful partnerships.

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as: a. Purchase requisition b. Material requisition c. Planned order release d. Traveling requisition

c. Planned order release

Direct benefits of ISO 14000 include: a. Reduced defect rates b. Improved on-time delivery rates c. Reduction of pollution emissions d. All of these

c. Reduction of pollution emissions

The following strategy is usually employed by lean organizations in an effort to ensure continued quality compliance among suppliers and with internal production facilities: a. CAPS b. 3PL c. Six Sigma d. MRP II

c. Six Sigma

Which of the following is an advantage of a centralized purchasing department? a. Closer contact between buyer and user b. Less bureaucracy c. Specialization d. More frequent shipments

c. Specialization

According to the text, the FOUR important elements of the supply chain are: a. Supply, operations, manufacturing, distribution b. Purchasing, manufacturing, transportation, retail stores c. Supply, operations, logistics, integration d. Purchasing, manufacturing, logistics, transportation

c. Supply, operations, logistics, integration

Which of the following acronyms is NOT paired with its correct "translation?" a. TQM − Total Quality Management b. ERP − Enterprise Resource Planning c. TLS − Third-party Logistics Services d. JIT − Just-in-Time

c. TLS − Third-party Logistics Services (3PLs)

Which type of requisition is used for materials and standard parts that are requested on a recurring basis? a. Open requisition b. Blanket requisition c. Traveling requisition d. Recyclable requisition (Cyc-Rec)

c. Traveling requisition

A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as: a. Optimal review period b. DMAIC improvement cycle c. Win-win negotiations d. Distributive negotiations

c. Win-win negotiations

SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these

d. All of these

Which of the following is true of today's purchasing staff members? a. They are viewed as strategic internal suppliers of the organization b. They are expected to generate cost savings for the organization c. They are expected to generate service and quality enhancements for the organization d. All the above

d. All the above

Developed in the 1990's as a popular way of developing radically new business processes in an effort to reduce waste and increase performance is referred to as: a. Process integration b. Vertical integration c. Benchmarking d. Business process reengineering

d. Business process reengineering

Which of the following statements is FALSE? a. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing. b. Electronic procurement systems can aid a company in saving both time and money. c. More than 50% of each sales dollar typically goes towards covering supply chain costs. d. Centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions.

d. Centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions.

The primary goals of purchasing include all EXCEPT: a. Improve the quality of finished goods produced b. Maximize customer satisfaction c. Secure materials at the lowest cost d. Ensure the highest quality raw materials are purchased

d. Ensure the highest quality raw materials are purchased

The purchasing department at Bighorn Sheep Corporation decided to intentionally increase purchases from small, underdeveloped nations. This decision can be considered: a. Unethical b. Utilitarianism c. Illegal d. Ethical Sourcing

d. Ethical Sourcing

The benefits of implementing an effective supplier certification program include all of the following EXCEPT: a. Improving responsiveness b. Building long-term beneficial relationships c. Recognizing excellence d. Increasing supplier base

d. Increasing supplier base

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as: a. ISO 9000 b. SCSS c. CRM d. SRM

d. SRM

The total cost of ownership for Supplier A is $2,670,000. The total cost of ownership for Supplier B is $1,750,000. The total cost of ownership for Supplier C is $2,990,000. Using Total Cost Analysis, it will be more cost-effective to use: a. Cannot be determined b. Supplier A c. Supplier C d. Supplier B

d. Supplier B

One standard which is measured in environmental supplier certification is: a. Technology investment by the supplier b. The number of trucks owned by the supplier c. The number of on-time deliveries d. The suppliers' recycled content

d. The suppliers' recycled content

Lean production is typically associated with which of the following company's production systems? a. Kraft b. Proctor and Gamble c. Samsung d. Toyota

d. Toyota

A service where key customers ask suppliers to take on the job of store level replenishment planning is called: a. Purchase spend reduction forecasting b. Early supplier involvement scheduling c. Strategic inventory planning d. Vendor managed inventory

d. Vendor managed inventory

A follow-up is considered a reactive approach to speed up an overdue shipment. a. True b. False

b. False

Criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments. a. True b. False

a. True

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: a. Early supplier involvement b. Manufacturer certification programs c. Supplier certification programs d. Total Cost of Ownership initiatives

a. Early supplier involvement

According to the textbook, third-party logistics providers (3LPs) do not offer assistance with helping products clear customs. a. True b. False

b. False

When calculating Return on Investment, current assets include: a. Accounts Receivable, Equipment, and Real Estate b. Cash, Accounts Receivable, and Equipment c. Equipment, Buildings, and Real Estate d. Cash, Accounts Receivable, and Inventory

d. Cash, Accounts Receivable, and Inventory

According to the textbook, the keys to successful supply chain management include trust, cooperation, collaboration and honest, accurate communications between supply chain partners. a. True b. False

a. True

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization. a. True b. False

a. True

Building Trust, Shared Vision and Objectives, Personal Business Relationships, Mutual Benefits and Needs are key factors that contribute to a lasting supplier partnership. a. True b. False

a. True

China, which has the largest number of ISO 9001 certificates, issued over 292,000 as of 2017, representing 28.3 percent of the total certificates issued worldwide. a. True b. False

a. True

Which of the following illustrates Forward Vertical Integration? a. Ford automotive buying additional machines for production b. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses c. Microsoft starting a new division that designs and manufactures clothing d. Subway sandwich company buying a bakery to make the bread for their sandwiches.

b. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses