GSCM 350 exam 1 topic 2

Which certified supplier goods can bypass inspection and go straight to storage or an assembly line? a. Dock-to-stock supplier b. Direct delivery supplier c. Most Trusted Status (MTS) supplier d. Premium supplier e. Platinum supplier

A

Which of the following is a direct material? a. Cardboard for cereal boxes b. Stamping machine in an auto-parts factory c. Copier paper d. Landscaping services for corporate headquarters e. All of the above

A

How does purchasing add value to operations? a. Constant supplier switching keeps operations on its toes b. Lowers costs by choosing suppliers with reasonable prices and high quality c. Choosing highest-cost supplier ensures best quality of delivered material d. Purchasing can shield operations from bad news about the supply market, so morale stays high e. Purchasing adds no value to operations; these are separate functions

B

It is estimated that maverick spend is up to ___% of indirect spend a. 1% b. 2% c. 5% d. 10% e. 25%

B

What is the form of competitive bidding where suppliers bid on the contract on-line in real-time? a. Internet playoff b. Reverse auction c. Virtual free-for-all d. Timed bid event e. Web contest

B

What is unauthorized buying by non-purchasing personnel called? a. Outlaw spending b. Maverick spending c. Illegal spending d. Forbidden spending e. Frozen spending (because it's put on "hold" until a purchasing manager clears it)

B

What is your biggest fear with a bottleneck item? a. The price will never change b. A supply disruption c. Too many potential suppliers d. Your customers will hate it e. The technology is too standardized

B

What PO is used for recurring purchases and covering a longer period of time? a. Transactional PO b. Longitudinal PO c. Blanket PO d. Transfer PO e. Extended PO

C

What happens in sales & operations planning? a. The sales force tells operations what to do b. Operations tells the sales force what to do c. Diverse functions come together to forecast how much the company will sell, and how much it needs to make d. Sales and operations make plans without inputs from any other function e. Government regulators present limits on sales and operations activities

C

Which category is high-importance, but low market complexity? a. Critical b. Routine c. Leverage d. Bottleneck e. Exploitable

C

Why should purchasing personnel pay better attention to MRO purchases? a. Better quality safety goggles can increase productivity over 100% b. The top cause of workplace accidents is poorly-sourced MRO supplies c. When combined, MRO purchases often represent a large dollar spend d. MRO items are always bought by the maintenance department, and someone's got to keep an eye on those guys e. They shouldn't - MRO purchases are a waste of time

C

How do internal customers formally communicate their needs to purchasing? a. Invoice b. Packing slip c. Purchase order d. Purchase requisition e. Receiving report

D

In a complex or uncertain buying scenario, ___________ might be the best supplier selection approach a. coin-flipping b. a reverse auction c. competitive bidding d. negotiation e. random selection

D

Services can be challenging to buy because a. They are intangible b. It's hard to know what you are actually getting or to evaluate quality c. They are hard to classify - can be direct or indirect d. All of the above. e. They are not particularly challenging to buy - it's actually quite easy.

D

The City of Dayton, Ohio uses what policy with regards to disadvantaged suppliers? a. The city bans all special preferences, no advantage is given to any firm. b. The city uses the same guidelines as the Federal government c. Local firms (within city limits) must be awarded 80% of all city contract dollars d. A local, diverse supplier can win a city contract if it is within 10% of the lowest bid e. Only suppliers classified as "disadvantaged" are permitted to win city contacts

D

Which documents must agree for the triple-match? a. PO, requisition, receiving report b. PO, requisition, bill of materials c. PO, invoice, bill of materials d. PO, invoice, and receiving report e. PO, invoice, requisition

D

Which of the following is characteristic of a high importance buying category? a. You spend a lot of money on this purchased input b. There are many suppliers who want to sell you this input c. The input has a large impact on the customer experience d. Both A & C e. None of the above

D

Why is a leverage item called a leverage item? a. This item is typically purchased through debt financing b. The supply market is incredibly complex c. Suppliers can basically force you to accept their terms d. Your purchasing power and multiple supplier options means you can demand (and get) the best deals from suppliers e. You spend very little money on it

D

What is one challenge in buying capital goods? a. They don't cost much, so you get no credit for buying them well b. You are constantly buying them, it's hard to keep up c. They don't last very long d. You spend very little time planning the acquisition of a capital good e. You often need to speak "engineering" and understand complex specifications

E

What is one risk of using technology to streamline and simplify purchasing? a. All suppliers will submit identical prices for a contract b. The company will end up using the same system as its competitors, losing a vital competitive advantage c. Potential suppliers will be overlooked d. The CEO will ignore purchasing's activities e. Simpler, tech-enabled purchasing systems are somewhat more vulnerable to fraud and abuse

E

What is purchase price variance? a. The difference in "regular" and "holiday" pricing b. The difference in the real price and what you think is fair c. The difference in the price at the store, and what you can buy it for online d. How fast the price goes up over a six-month period e. The price difference between the amount that you pay a supplier to buy a product and the budgeted price for the product

E

Where can you look for information on potential suppliers? a. Your company's database and salesforce b. Industry contacts c. Supplier directories and trade magazines d. The Internet e. All of the above

E

Which of the following would suggest a highly complex buying market? a. Many suppliers who fight for your business b. The purchased input is a highly standardized item c. Your company is very large and sophisticated compared to any potential suppliers d. The risks of buying this input are low e. The technology of the purchased input is constantly changing

E

You've been buying a small amount of standard material from a local supplier for 20 years. The supplier factory suddenly burns down, forcing you to buy the item from a supplier halfway around the world, with whom you have never done business. What just happened? a. Your delivery pipeline just got shorter b. You've just encountered a major technological shift c. You now have less risk in your supply market d. Quality will definitely decrease e. Your routine item has probably become a bottleneck

E

As a purchasing professional, you should spend a lot of time managing routine buys

false

Capital goods are small, frequently purchased, low-dollar buys.

false

A requisition communicates internal need, a PO is a request made to external suppliers

true

Buying a larger quantity than you need to get a price break might cause additional problems, so do this with caution.

true

Not all buys are created equal; you should spend more time and effort on some purchases than others.

true

The purchasing process consists of four key steps: need communication, supplier selection, transaction management, relationship management

true