SCM 201 EXAM 1 REVIEW

Given the following make buy information what would be the break even point Make Options $5500; $4 Buy Options $1500; $9

800 units

Which of the following would be a good reason to outsource (buy) versus making?

A firm lacks the technology or expertise to produce an item

Benchmarking is:

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

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

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

When a particular item is in short supply accompanied by rising prices, a firm might finds it beneficial to :

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

Successful strategic supplier alliances can result in which of the following? A) Better market penetration B) Access to new technology and knowledge C) Higher return on investment D) All of these

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

All of these

The main benefits(s) from benchmarking sourcing practices is/are

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

The following is an example of the bullwhip effect

Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popularretailers

Benefits derived from implementing e-procurement system include all of the following EXCEPT

Creates numerous additional job opportunities in the purchasing department

Which of the following is true of today's purchasing staff members? A) They are viewed as strategic internal supplies of the organization B) They are expected to generate cost saving for the organization C) They are expected to generate service and quality enhancements for the organization D) All of the above

D) All of the above

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

Which of the following is NOT important in developing a successful strategic alliance? A) Developing performance metrics B) Developing cross-functional team capabilities externally and within the company C) Developing efficient processes that will remain unchanged for the duration of the partnership

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

According to the textbook, Supplier Recognition Programs:

Encourage suppliers to keep their performance high

The primary goals of purchasing include all EXCEPT

Ensure the highest quality raw materials are purchased

Promoting diversity by intentionally buying from small firms or ethnic minority businesses. This is an example of:

Ethical sourcing

Which of the following can happen as a result of the bullwhip effect

Excess costs for each firm in a supply chain

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

FALSE

T/F Ethical sourcing policies should NOT include determining where all purchased goods come from and how they are made.

FALSE

T/F Many large firms are moving to in-house vertically integrated structure where they have more control over each business unit

FALSE

T/F 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"

FALSE

T/F When developing successful partnerships, it is best to avoid inter-personal business relationships between buyers and suppliers.

FALSE

Sustainable sourcing policies should include which of the following?

Fair working conditions

While most public procurement is focused on goals similar to those of purchasing departments in the private sector, U.S. federal government purchases must comply with the:

Federal Acquisition Regulation

Sustainability reporting is _____ for American companies:

Largely a voluntary effort

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT:

Legislation requiring corporate ethical and sustainable sourcing

Customer relationship management distribution network transportation management and service response logistics are all important issues that are most closely related to

Logistics

Blanket or open-end purchase orders are suitable for buying

Office Supplies

Which of the following is TRUE? A) Performance metrics and personal business relationships are both keys to building successful partnerships. B) ISO 7500 is the supplier award given to the highest rated supplier in Japan. C) They key to successful partnerships is developing performance measures with weights greater than 3.50 D) SRM software modules are very affordable (less than $50,000) and can be implemented within a week.

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

According to the textbook, the order of product and service flow is as follows

Raw materials supplier, component manufacturer, end product manufacturer, wholesale distributor, retailer, end-product consumer

Direct benefits of ISO 14000 include:

Reduction of pollution emission

When a product is purchased which is complicated or highly a technical ______ may be issued instead of a request for quotation

Request for proposal

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:

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

Supplier B

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as:

Supplier inspection

Encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as:

Supplier management

According to the text, FOUR important elements of the supply chain are

Supply, operations, logistics, integration

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"

Sustainability

Convincing your supplier to cut back on packaging, fuel, or electricity is an example of:

Sustainable sourcing

A practice aimed at ensuring that purchased products or materials meet environmental objectives of the organizations is referred to as green purchasing

TRUE

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

TRUE

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

TRUE

Firms assess their sourcing capabilities because the sourcing function is one of the most value-enhancing functions in an organization

TRUE

It is important for firms to addresses the impact of ethical and sustainability sourcing on other facets of the organization and irs trading partners.

TRUE

T/F A reason for making items instead of buying them would include better quality control.

TRUE

T/F 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

TRUE

T/F Blank check purchase orders, Corporate purchasing cards, Petty cash, and Open-end purchase orders are all possible alternatives to dealing with small value purchases such as those for office supplies.

TRUE

T/F Building Trust, Shared Vision and objectives, Personal Business Relationships, Mutual Benefits and Needs are key factors that contribute to a lasting supplier partnership.

TRUE

T/F 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.

TRUE

T/F Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management.

TRUE

T/F ISO 14000 is a family of international standards for environmental management

TRUE

T/F If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease.

TRUE

T/F 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 suppliers to follow.

TRUE

T/F 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.

TRUE

T/F Supply chain analysts can be used along the supply chain to schedule production according to expanded supplier deliveries

TRUE

T/F Supply chain management is concerned about how suppliers products are designed produced and transport

TRUE

T/F The purchase order is NOT a legally binding contract until it is accepted by the supplier

TRUE

T/F Unless an organizations has firm grasp of the key issues surrounding supplier relationship, it cannot reap the benefits of such relationships.

TRUE

One standard which is measured in environmental supplier certification is:

The number of trucks owned by the supplier

Which of the following is TRUE? A) VMI stands for vertically managed inventory B) 3PL stands for Third Party Leverage C) VMI stands for Vendor Managed Inventory D) 3PL stands for Three Point Logistics

VMI stands for Vendor Managed Inventory

The Ethical Trading Initiatives (ETI) does NOT include which of the following:

Workers receive a 30 minute break for an 8 hour shift