SCM 330 Purchasing
Approximately ______ of outsourcing relationships fail.
25-50%
A sourcing philosophy that involves sourcing the majority of components from one supplier and a small amount of components from a second supplier in order to reduce risk is known as
80/20 single sourcing
is a methodology used to determine whether to accept or reject a batch of nonstrategic components or items.
Acceptance sampling
The U.S. trade partner that primarily exports oil, natural gas and energy; and for which using a few words in the local language is greatly appreciated is
Canada
The U.S. trade partner that is the largest economy in the world, and whose current economic plans emphasize increasing innovation and boosting domestic consumption is
China
The largest exporter to the United States is
China
power includes the ability to punish the other party -financially, physically, emotionally, or mentally.
Coercive
arises from incompatibility of actual or desired response.
Conflict
is the exchange of goods for goods in full or partial payment of a sales transaction.
Countertrade
The U.S. trade partner that is extremely cautious in negotiations and prioritizes climate change and sustainability is
Germany
The standard that documents the implementation of a quality program is
ISO 9001
buyers purchase raw materials and component parts for use in production.
Industrial
The U.S. trade partner that primarily exports vehicles, machinery, mineral fuels, and medical instruments; and for which personal relationships are very important is
Mexico
Which of the following statements about power is true?
Nonmediated forms of power can actually help performance.
The effect of Brexit on trade between North American and the United Kingdom was
North American firms are concerned over tariffs, restrictions on labor, political risk, and other factors
means taking advantage of situations and people without evaluating the consequences.
Opportunism
is the behavior of relationship motivated by the maximization of economic self-interest and occasioned loss of the other partners.
Opportunistic behavior
is the extent to which the service provider is inclined to utilize information gained through its relationship with the customer for its own, perhaps unauthorized, benefit should the customer be unable to detect such action.
Poaching
is the ability of one party (buyer or seller) to influence or control the environment around them, including the behavior of others.
Power
in the relationship between supply chain partners will often lead to opportunism and exploitation.
Power asymmetry
is the avoidance of nonconformance in products and services by not allowing errors or defects to occur.
Preventive quality
focuses on how businesses develop high-quality products for their customers.
Quality function deployment (QFD)
power comes from interpersonal appeal based on individual qualities and attributes, such as personality traits.
Referent
is the extent of contentment with the relationship between supply chain partners.
Satisfaction
represents the extent to which a service provider is inclined to deliberately underperform or withhold resources should the customer be unable to detect such action.
Shirking
Which of the following is true about Six Sigma?
Six-sigma standards can be applied to both manufacturing and service firms using the same methodology.
is the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit.
Social capital
is the ability to consistently meet or exceed customer expectations regarding critical performance areas.
Supplier quality
Which of the following is a cost that often increases as a result of outsourcing to a foreign country?
Tariff rates in developed countries are typically higher for lesser developed nations.
Which of the following is true regarding the SRM Scoring System?
The weaker the score, the more often the strategic supplier needs to be evaluated.
Which of the following statements would lead a firm to choose multisourcing over single sourcing?
There are concerns about supplier capacity to meet future demand.
In statistical process control (SPC), the purpose of control charts is
To identify trends in process output and detect quality problems early
The U.S. trade partner that sometimes patronizes the people involved in negotiations, whose firms tend to be overstaffed, and are often impressed with education and degrees is
UK
The incentive for a supplier to participate in TQM initiatives is
a long-term contract
Which of the following is an advantage of single sourcing?
accelerated learning curve
The most common counter traders are in the ______ industry.
aerospace
US-based firms can reduce the risk associated with exchange rate fluctuations by
agreeing to terms of payments in U.S. dollars
The industry for which price markup is the most important criteria for selecting a vendor is the ______ industry.
apparel
Internal production of subassemblies and parts is a form of
backward vertical integration
When switching over to external sources, internal employees must be trained to
become relationship managers rather than technical managers
In statistical process control (SPC), the performance of a manufacturing process compared to its specification limits is tracked using
both "X-bar chart" and "R chart for sample range"
Firms often hire brokers to coordinate global sourcing because
brokers deal with local issues such as ethics and customs
The process of hiring other suppliers to handle specific processes other than manufacturing is
business process outsourcing (BPO)
The type of countertrade agreement in which the original exporter agrees to accept as full or part payment products derived from the original exported product is
buyback
Suppliers to automobile manufacturers often suffer from ______ power influences from the manufacturers.
coercive
The glue that holds together the sourcing relationship is
communication
The form of risk management that includes early warning detection systems is which of the following?
contingency planning
Which of the following steps of strategic outsourcing involves establishing a clearly defined scope of work (SOW)?
contract development
For a supply chain partnership to be successful, ______ needs to be the driver of strategy.
cooperation
Strategic benefits of outsourcing include which of the following?
cost minimization
Which of the following supplier evaluation systems factors in quality, service (delivery), and price?
cost-ratio method
Which of the following supplier evaluation systems factors in the buyer's internal operating costs associated with the quality, delivery, and service elements of the purchase?
cost-ratio method
The type of countertrade agreement in which the seller exchanges products for compensatory amounts of commodities is
counter purchase
In statistical process control using Six Sigma methodology, the width of the control limits of the X-bar chart is determined by
customer demands
One of the costs of quality, the costs of external failure, refers to
damage to reputation when the customer is dissatisfied
When Chrysler developed its LH line, its suppliers became involved from the ______ stage.
development
Some costs that would be incurred when outsourcing to an offshore country that would not be incurred with domestic manufacturing are
duty, customs, and import fees
In the ______ industry, timely deliveries are not a high priority in terms of supplier selection because the inventory holding cost is low.
electronics
The main benefit of outsourcing is that it allows firms to
focus on core competencies
The trend in supply chain partnerships is to
focus on strong relationships with a few key suppliers
Foreign Trade Zones (FTZs) are
for goods to be stored within U.S. boundaries without payment until the goods are passed the buying company
The most common way to improve goal alignment in the outsourcing relationship is to
have a contract with precise performance or service level agreements along with penalty and reward clauses
One of the main drawbacks to sourcing internally is
higher levels of many overhead administrative functions
The method of supplier management that requires suppliers to achieve higher milestones or ratings is the ______ method.
hurdle
The type of countertrade agreement in which offsets occur where products or services transferred in an offset arrangement are unrelated to the specific products referred to in the export agreement is known as
indirect offset
When material costs are reduced,
inventory carrying costs are reduced
In statistical process control (SPC), the upper control limit of an X-bar chart signifies
is the highest fill level expected without causing an error
The type of interfirm relationship that goes further than partnership is a
joint venture
Which of the following supplier evaluation systems is most commonly used?
linear averaging
Chrysler's Supplier Cost Reduction Effort (SCORE) ultimately resulted in
lower inventory levels
Tariffs for goods coming into the United States are
lower than tariffs for goods entering the European Union
Relationship building and coordination activities to maintain external sourcing relationships is referred to as the cost of
managing the supply relationship
For Ford Motor company, manufacturing of tires is an example of a(n)
noncore competency
With ______ power, the supplier knows what the customer wants and has knowledge and expertise in designing new products or services.
nonmediated
The effective exchange rate index composite indicators are based on relative
normalized unit labor costs, value-added deflators, wholesale prices, and export unit values
The risk that the outsourcing supplier may shirk their responsibilities even if the contract is complete is known as
opportunistic renegotiation
Delegation of an organization's production capabilities is known as
outsourcing
A(n) ______ is an after-the-fact, tactical assessment that measures the day-to-day actual performance of the supplying firm.
performance-based evaluation
A(n) ______ is an assessment of the supplier's actual performance on a variety of criteria, such as delivery reliability, cost, quality, and defect rate.
performance-based evaluation
A potential problem with establishing long-term relationships with a few key suppliers is that a supplier may have increasing
power
Suppliers that are important to the buying firm but could be replaced with alternative suppliers if necessary are known as
preferred suppliers
When a buyer conducts an audit at the supplier's site to assess the supplier's capabilities, this is a(n)
process-based supplier evaluation
A(n) ______ involves developing flow charts to identify non-value-added steps in the supplying firm's activities.
processed-based evaluation
A(n) ______ is an assessment of the supplier's production or service process.
processed-based evaluation
The practice of taxing imports as a means of shielding a country's domestic industries from foreign competition is known as
protectionism
An example of ______ power is a supply chain partner working towards its partner's goals due to admiration, respect, or identification with the other firm.
referent
An example of preventive quality is
requiring strategic components to go through a rigorous parts quality assurance
A contract clause that protects transferred employees or stipulates guidelines as to their treatment will likely include a ______ specifying the treatment of resources should the relationship come to an end.
reversibility clause
The form of risk management that includes a detailed analysis the risks that could happen and the probability of these events happening is which of the following?
risk assessment
The form of risk management that includes a detailed analysis of what can be done to reduce or eliminate the probability and severity of these adverse events is which of the following?
risk mitigation
The form of risk management that includes regular supplier assessments and the use of scorecards is which of the following?
risk monitoring
One of the costs of quality, the costs of internal failure, refers to
scrap, rework, and internal downtime
The terms first tier, second tier, third tier in the context of a supply chain refer to
sequence of suppliers or customers that are in the chain but distant from the base company
The sourcing philosophy that gives suppliers the greatest incentives to aid in methods improvement is
single
should generally provide lower per cost unit by reducing the duplication of operations in areas such as setup.
single sourcing
Cross-sourcing hedges risk by
sourcing specific parts from two different suppliers, each of which are capable of producing all parts
A type of interaction that goes beyond the length of time it takes for one discrete transaction is a(n)
special influence transaction
A ______ is a relationship formed between two independent entities in supply channels to achieve specific objectives and benefits.
strategic alliance
A model view of the company as the primary approach for achieving a competitive advantage in a competitive environment is known as a(n)
strategic evaluation
Which of the following steps of strategic outsourcing involve performing a SWOT (strengths, weaknesses, opportunities, threats) analysis and identifying Porter's five key financial figures?
strategic supplier profiles
Suppliers that are most important to the buying firm because their capabilities would be difficult to replace are known as
strategic suppliers
is the management of strategic collaborative relationships between buying and selling organizations.
supplier relationship management (SRM)
Strategic alliances
support the idea that supplier relationships contribute to organizational success
The type of countertrade agreement in which foreign direct investment made by the selling firm in order to establish joint ventures in the buying country is
technology transfer
The quality award that specifically addresses human resource development is
the Malcolm Baldrige National Quality Award
In order for an outsourcing proposal to be attractive, ______.
the cost reduction must be significantly lower than the current direct operating costs
A firm can realize savings through exchange rates when
the dollar is strong compared to the local currency
In a control chart, the line between the LCL and the UCL represents
the process mean or target
The first step in the supplier partnership implementation process is
the strategic verification of the need for a supplier partnership
Tightly coupled or integrated product designs may not be appropriate for outsourcing because
they require higher levels of coordination
The ultimate goal of supplier relationship management (SRM) is
to create supply chain value and minimize risk
The current trend in supply chain partnerships is trending
toward external integration with both suppliers and customers
Suppliers that provide the buying firm with items that are not critical to its core business and that can be easily replaced in a short time are known as
transactional suppliers
In the United States, the trend in number of suppliers has been ______ in recent years.
trending toward fewer suppliers
Cooperative relationships are typically formed between tier ______ suppliers
two
Based on Taguchi's loss function, the biggest enemy to quality is
variation
The assimilation in one company of multiple stages of production normally operated by separate companies is
vertical integration