Purch 7/8

Deming's 14 points stress the importance of: a. incoming inspection in quality assurance. b. top management in quality control. c. annual rating or merit systems. d. minimizing total cost with a single source. e. specialized education for high potential employees.

D

"C" items in ABC analysis are: a. reviewed frequently. b. ordered frequently. c. often managed by the supplier. d. normally carried in small quantities. e. particularly critical in financial terms.

c. often managed by the supplier.

Anticipation inventories are carried: a. to stock the distribution pipelines. b. to permit activities on either side of a major process. c. to protect against machine breakdown. d. to cover a well-defined future need. e. to protect against uncertainties in supply and demand.

d. to cover a well-defined future need.

Demand for buttons and zippers at a sportswear manufacturer is an example of: a. derived demand. b. buffer demand. c. anticipated demand. d. independent demand. scheduled demand.

a. derived demand.

Closed-loop MRP: a. is a system which closes the loop between the supplier and the purchaser. b. provides a feedback loop between capacity and the master production schedule. c. requires a feedback loop between purchasing and accounting. d. requires a check between the master production schedule and inventory. allows a unit manager to sequence jobs done in that department.

a. is a system which closes the loop between the supplier and the purchaser.

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 $3,600 per year. b. buying 100 at a time will save the company $2,260 per year. c. buying 100 at a time will save the company $2,130 per year. d. buying 100 at a time will save the company $1,260 per year. buying 100 at a time will lose the company $840 per year.

c. buying 100 at a time will save the company $2,130 per year.

The real costs of quality: a. are frequently overstated in an organization. b. are incurred in the quality control department. c. rise significantly as defects increase in the finished product. d. tend to rise significantly with the cost of prevention. are easily identified by the accounting department.

c. rise significantly as defects increase in the finished product.

If a process is stable and predictable: a. the process averages a varying number of standard deviations. b. common causes have been eliminated through process change. c. it produces the same exact result each time the activity is performed. d. random causes have been detected and eliminated. e. the probability of it meeting customer specifications can be predicted

e. the probability of it meeting customer specifications can be predicted

In statistical process control (SPC), special or assignable causes of variation: a. are outside, nonrandom problems such as breakdown of machinery, material variation, or human error. b. are intrinsic to the process and will always be there unless the process is changed. c. have everything to do with the underlying process and can only be eliminated by changing the process. d. are of secondary importance in quality control procedures used to detect and eliminate variation. e. can be present in a process that is fully capable of meeting specifications consistently.

a. are outside, nonrandom problems such as breakdown of machinery, material variation, or human error.

Managing the consumption of services organizationwide: a. is easy because organizationwide services spend data is readily accessible. b. is of little concern because annual spend for services is declining in most organizations. c. is difficult because multiple contracts may exist at varying prices and terms with the same suppliers. d. is easy because supply management has historically had responsibility for managing services spend. is easy because forecasting aggregate demand for services is typically more reliable than forecasting demand for goods.

c. is difficult because multiple contracts may exist at varying prices and terms with the same suppliers.

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 causal model. b. a repetitive pattern modeling tool. c. a time series forecasting technique. d. a deterministic model. e. a qualitative forecasting technique.

a. a causal model.

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. it is multiplied by the material unit cost to calculate the per unit carrying cost.

A supplier certification program: a. adds cost to the supplier, but provides few benefits to the supplier. b. may enable the buyer and seller to lower costs and improve quality. c. may improve quality, but at best will not raise costs. d. always improves quality, but usually at a higher purchase price. typically cost more to implement than the value of the quality improvement.

b. may enable the buyer and seller to lower costs and improve quality.

A sampling technique in which every element in the population has an equal chance of being selected is called: a. additive sampling. b. random sampling. c. sequential sampling. d. 100 percent testing. cumulative sampling.

b. random sampling.

The three main inputs of a material requirements planning (MRP) system are: a. required human resources and machine resources, and available resources. b. required manufacturing and human resources, and master production schedule. c. a bill of material, a master production schedule, and the inventory record. d. Pareto analysis results, inventory records and a master production schedule. inventory records, annual sales forecast, and a master production schedule.

c. a bill of material, a master production schedule, and the inventory record.

A six sigma (6σ) approach to quality: a. means there are no more than 6 defects per million opportunities. b. was developed by Japanese companies in the 1950s. c. focuses on preventing defects by using data to reduce variation and waste. d. has no connection to the concept of zero defects. has soft goals such as happier customers and employees.

c. focuses on preventing defects by using data to reduce variation and waste.

Determination of the "best buy" is based on: a. suitability for a given use. b. a balance between price and quality. c. trade-offs among stakeholders (e.g., marketing, operations, and supply). d. technical considerations only. the internal user or specifier's perceptions.

c. trade-offs among stakeholders (e.g., marketing, operations, and supply).

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 price premium to attain the desired quantity is usually less than the costs of not having materials available when needed. c. managers seldom make purchase decisions until they are absolutely sure of the volume required. d. balancing price, volume, carrying cost, and the cost of stockouts is key to successfully determining how much to buy at any point in time. e. the costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy.

d. balancing price, volume, carrying cost, and the cost of stockouts is key to successfully determining how much to buy at any point in time.

ISO 9001:2008 provides a tested framework for a systematic approach to consistently delivering product that satisfies customers' expectations by: a. dictating how quality requirements should be met in every organization. b. dictating scope and flexibility for quality system implementation. c. assuming all national cultures will meet quality requirements the same way. d. providing a set of standardized requirements a quality system must meet. e. assuming all business sectors will meet quality requirements the same way.

d. providing a set of standardized requirements a quality system must meet.

A formal service quality evaluation process: a. is relatively simple and applicable for all types of services. b. is performed exactly the same as it is for goods. c. impossible to quantify if the service is highly intangible. d. is most easily done on the buyer's premises. e. measures the gap between service expectations and performance perceptions.

e. measures the gap between service expectations and performance perceptions.