SCM 460 Exam 1 Study Guide
In reference to SAP structure / hierarchy, a _______ is a self-contained unit in an R/3 system with separate master records and its own set of tables (database).
Client
General data include all of the following EXCEPT: -Company name -Company insurance data -Company address -Company telephone number
Company insurance data
Which of the following items are not checked during the 3-way match? -Part Number -Date Ordered -Quantity -Price
Date Ordered
The unique number used for a business partner master record can be assigned in which ways? -Internally -Centrally -Externally -Digitally
Internally Externally
Raw materials and semi-finished products are just two examples of the numerous _______________ within SAP.
Material Types
Efficient and effective supply processes are needed because of: -the need for an audit trail. -the large volume of items and dollar value. -severe consequences of poor performance. -the potential contribution to organizational objectives. -all of the above.
all of the above
When a buyer sends a purchase order (PO) out to a vendor, the vendor will turn around and enter that PO into their system as which of the following? -Purchase Order -Purchase Requisition -Invoice -Sales Order -Bill of Lading
Sales Order
The greatest opportunity to affect value in the purchasing process is when: -the supplier(s) is selected. -price and terms are determined. -potential suppliers are analyzed. -needs are recognized and described. -the buyer follows-up and expedites the order.
needs are recognized and described.
The actual contract between the buyer and the seller is known as what? -Request for quote -Purchase requisition -Invoice -Sales order -None of the Above
None of the Above
Quality management is managed at what level? -Plant -Company code -Client -Shipping -Receiving
Plant
A corporation with one set of books (balance sheet and net income) has 4 separate manufacturing locations across the United States. Each of these locations would most likely be set up in SAP as: -Clients -Company codes -Plants -Storage locations
Plants
A strategy is: -an action plan to maximize rewards in the current period in return for big risks. -a vision of the future of an organization. -an action plan to achieve specific long-term goals and objectives. -a procedure for allocating resources among functions in the organization. -an action plan to achieve specific operational and tactical goals.
-an action plan to achieve specific long-term goals and objectives.
Place the following procurement cycle process flow phases in the correct order:
1. Determination of requirement 2. Source determination 3. Vendor selection and comparison of quotations 4. Purchase order processing 5. Purchase order follow-up 6. Goods receiving and inventory management 7. Invoice verification
Place in order the following documents/processes as they flow through the buyer and seller interaction.
1. Purchase requisition 2. Purchase order 3. Sales order 4. ERP processing 5. Bill of landing 6. Receiving report
Once a purchase requisition is visible to the buyer there are a few steps that are taken before the seller gets involved. Arrange the following steps in the order the buyer would follow.
1. Review the requisition 2. Find a qualified vendor 3. Negotiate price 4. Create the purchase order
Data within the material master can be divided into two (2) categories. For example, if you had a "Red Gas Can" that was 1ft x 2ft x 1ft and weighed 1 lb. 15 ounces, what category does this fit under? -Data that cannot be changed -Data that the system uses to perform a control function -Data that is purely descriptive -Data that has no value
Data that is purely descriptive
When creating plants within SAP, you can number them in a non-consecutive manner. -True -False
False
Company code data is MOST relevant to which functional area? -Logistics -Purchasing -Financial Accounting -Sales and Distribution
Financial Accounting
Which of the following actions, results in a reduction in warehouse stock? -Goods receipt -Goods issue -Lead time adjustment on material master
Goods issue
If you are a bicycle manufacturer, which of the following is direct material (as opposed to indirect material)? -Handle bars -Office computer -Supplies (paper, pens, etc.) -Safety glasses
Handle bars
Supply strategies (answer found in chapter TWO) that are based on changes in demand and supply are known as: -risk-management strategies. -assurance-of-supply strategies. -cost-reduction strategies. -environmental-change strategies. -supply chain support strategies.
assurance-of-supply strategies.
Once the goods have been received into stock and the proper quantity is visible within a company's ERP system, what is the next step? -The purchase order is closed -The purchase order is deleted -The purchase order is reused -None of the Above
The purchase order is closed
When goods are moved within the SAP system there are a chain of events that happen. Which of the follow IS NOT one of those events? -Material document is generated -Stock quantities are updated -Stock values within the material master are updated -The purchase order is deleted
The purchase order is deleted
A movement type is a three-digit number you must use when you enter a goods movement into the system. -True -False
True
A vendor has the same account number in all company codes. -True -False
True
The SAME material master (part number) can exist in multiple plants? -True -False
True The same material master (part number) can be purchased (or manufactured) in many different plants. In this case, each plant would have its own plant-specific data associated with the material. An example of plant specific data would be maximum order quantities, lead times, etc.
Application software for the procurement process is available: -only through an enterprise resource planning (ERP) system. -only from a systems developer. -only from an application software provider (ASP). -from an ERP system or systems developer, but not from an ASP. -from an ERP system, a systems developer, or an ASP.
from an ERP system, a systems developer, or an ASP.
The current business-to-business e-marketplace business model focuses on: -price discovery and clearing. -buying and selling consumer services. -providing supply chain services. -providing an electronic forum for posting RFx. -providing an electronic arena for open auctions.
providing supply chain services.
Corporate purchasing cards are issued to: -internal customers to purchase high-dollar, production materials of a highly technical nature. -internal customers to purchase low-dollar, high-volume goods and services. -supply department personnel to speed up the acquisition of rush orders and small value orders. -internal customers to purchase either high or low dollar, high or low-volume, production or non-production goods and services. -supply department personnel to eliminate purchase orders and individual invoices.
internal customers to purchase low-dollar, high-volume goods and services.
On average, the dollars spent with suppliers as a percent of revenues is: -greater in service organizations than in manufacturing. -about equal in service organizations and manufacturing. -is greater in manufacturing than in service organizations. -depends on the type of manufacturing process. -depends on the type of service.
is greater in manufacturing than in service organizations.
Indirect spend is: -often managed differently than direct spend. -any input that goes into the end product. -typically managed the same as direct spend. -usually more of the focus of supply than direct spend. -of little importance from a spend management perspective.
often managed differently than direct spend.
A change from a decentralized supply structure to a centralized one: -is easily done as long as the CEO mandates the change. -typically has few implications for supply talent. -often requires information technology not already in use. -is solely the decision of the existing chief supply officer. -requires a consensus among existing supply management professionals.
often requires information technology not already in use.
The objectives of supply management focus on: -operational issues such as price, supply availability, and inventory levels. -internal supply processes and relationships with key suppliers. -strategic issues only, such as competitive position and profitability. -operational and strategic issues. -supply's contribution to strategic players in the organization.
operational and strategic issues.
The impact of supply management actions on the inventory asset base and the balance sheet is measured by the: -profit leverage effect (PLE). -inventory turnover (IT). -return on assets (ROA) effect. -return on investment (ROI). -return on inventory (ROI).
return on assets (ROA) effect.
Which of the following is one of the five major supply strategy areas: -price-reduction strategies. -performance-improvement strategies. -engineering-support strategies. -risk-management strategies. -new-product design strategies.
risk-management strategies.
When stock items that are bought externally have a different valuation price than ones that are produced in-house they are said to have a ___________ valuation.
split
The question: "How can supply and the supply chain contribute effectively to organizational objectives and strategy?" is a key question in: -strategic supply management. -supplier relationship management. -tiered supplier management -supplier network management. -organizational strategic management.
strategic supply management.
In manufacturing companies: -supply and operations coordination is not essential to operational excellence. -supply and operations coordination is essential to operational excellence. -most purchases are for resale. -purchases may represent a small percentage of total expenditures. -production purchasing is outsourced and expertise in non-production purchasing is developed in house.
supply and operations coordination is essential to operational excellence.
The ratio of purchased material and services compared to total costs or income, has a major influence on: -the size of the supply base. -supply's reporting level in the organization -the credentials of the existing supply personnel. -the nature of the products or services acquired.
supply's reporting level in the organization
Normally, most organizational objectives can be summarized as: -survival, growth, financial, and environmental. -marketing, management, finance, and operations. -survival, market share, earnings per share, and return on investment. -profitability, return on investment, liquidity, and earnings per share. -growth, maintenance, new products, and asset management.
survival, growth, financial, and environmental.
When developing supply strategies related to "how to buy," decisions must be made about: -systems and procedures -goals and objectives -make or buy -large or small inventories -none of the above
systems and procedures
Three major challenges facing the supply executive when setting supply objectives and strategies are: -(1) Should we have a centralized or decentralized purchasing structure? (2) Should we hire managers trained in supply management or in technical fields? and (3) Should we outsource any or all of the purchasing function? -(1) What is the effective interpretation of corporate objectives and supply objectives? (2) What is the appropriate action plan or strategy to achieve the desired objectives? and (3) How can supply issues be identified and integrated into organizational objectives and strategies? -(1)How many suppliers should we do business with? (2) Which suppliers should we select? and (3) What type of relationship should we have with these suppliers? -(1) Should we precertify suppliers? (2) Should we allow internal users to purchase certain categories of purchases? and (3) Should we increase or decrease the number of suppliers in our supply base? -(1) How can we simultaneously provide uninterrupted supply and minimize inventory? (2) How can we improve quality while reducing our supply base? and (3) How can we increase our involvement in outsourcing decisions?
(1) What is the effective interpretation of corporate objectives and supply objectives? (2) What is the appropriate action plan or strategy to achieve the desired objectives? and (3) How can supply issues be identified and integrated into organizational objectives and strategies?
You have just received goods from a purchase order within SAP. Which of the following would occur as a result of this recent receipt? (Chose all that apply) -Material document would be created -Purchase order would be deleted from the system -Stock quantities are updated -Purchase requisition is deleted -Material master stock values are updated
-Material document would be created -Stock quantities are updated -Material master stock values are updated
Which of the following are documents that are generated by the buyer? -Invoice -Purchase Order -Bill of Lading -Receiving Report -Sales Order
-Purchase Order -Receiving Report The invoice, bill of lading, and sales order are all seller-generated documents.
What is the three digit number for goods receipt for a purchase order? -321 -201 -101 -911 -121
101
Your company currently has four (4) plants. The first plant you entered into the system holds the number 1020 and the last holds the number 1023. What number do the other two plants hold? (Assume that the plants were entered one after another) -1019, 1024 -1021, 1025 -1021, 1022 -1018, 1019
1021, 1022
What is the three digit number for goods issue for a cost center? -321 -101 -201 -121 -911
201
A vendor delivers goods and then sends an invoice for payment. When the invoice is received by the buying company, it will then be processed by which accounting department? -Accounts payable -Accounts receivable
Accounts payable
Why is it important that the PO is referenced when processing a goods receipt (when material is delivered from your vendor)? -Goods receiving can check whether the delivery actually corresponds to the order. -The system can propose data from the purchase order during entry of the goods receipt (for example, the material ordered, its quantity, and so on). This simplifies both data entry and checking (overdeliveries and underdeliveries). -The delivery is marked in the purchase order history. This allows the Purchasing department to monitor the purchase order history and initiate reminder procedures in the event of a late delivery. -The vendor invoice is checked against the ordered quantity and the delivered quantity. -The goods receipt is valuated on the basis of the purchase order price or the invoice price. -All of the above
All of the above
The SAP transaction to create a raw material master is: -MIRO -MB01 -MD04 -MMR1
MMR1
Engineering has just passed down 3 separate CAD (Computer Aided Design) Drawings... Where would be the most logical place to store this information within the SAP system? -Inventory -Material Master -Vendor Master -Purchasing -Accounting
Material Master
A shipment of bicycle spokes has arrived at your warehouse from a new vendor. Upon inspection you notice they were packaged poorly and as a result they were damaged in transit. Which of the following menu paths could you use to return these goods? (Chose all that may apply) -Material document -> Return delivery -Goods receipt -> For purchase order -Material document -> Send back shipment -Goods receipt -> Expedite to vendor
Material document -> Return delivery Goods receipt -> For purchase order
You have posted a goods movement for Item XYZ. Three days later your manager tells you to change the original goods movement document. Is this possible? -Yes -No -Not enough information
No
Which document is not included as part of the purchasing invoice verification (3-way match) process? -Purchase Order -Purchase Requisition -Receipt -Invoice
Purchase Requisition
When a goods receipt is posted, which of the following purchasing data IS NOT updated with regards to the purchase order? -Purchase order history -Purchase order number -Purchase order item
Purchase order number
Which SAP purchasing master data establishes the link between the material and the vendor? -Purchasing info record -Source list -Quota arrangement
Purchasing info record
Which of the following is NOT a hierarchical organizational level associated with material (master) data? -Client - general data -Plant -Storage Location -Purchasing organization
Purchasing organization
The standard material type for a raw material type is: -ROH -HALB -VERP -FERT
ROH
Assuming JIT has not been implemented, supply can improve on the goal to provide an uninterrupted flow of materials, supplies and services by: -holding large inventories. -holding small inventories. -standardizing capital equipment, materials, MRO and services. -b and c. -a and c
a and c
Company image may be directly influenced by: -treating suppliers in a fair and equitable manner. -complying with regulatory requirements. -labor, environmental, and ethical practices of suppliers. -none of the above. -a, b and c.
a, b and c.
Supply's contribution to the organization's competitive position depends on its ability to: -reduce costs. -enhance revenues. -manage assets. -a and c. -a, b and c.
a, b and c.
Effectively and efficiently applying technology to the supply management process will result in: -increased clerical effort because there is more data entry than in a manual system. -damaged buyer-supplier relationships because of the impersonal nature of electronic communication. -an ability to reduce the total cost of doing business by enabling just-in-time systems, bar-coding applications, integrated manufacturing, and electronic funds transfers. -poorer negotiation planning and preparation because of the time spent accessing and analyzing data. -a decline in operating performance because of the volume of information to be analyzed and considered before making a decision.
an ability to reduce the total cost of doing business by enabling just-in-time systems, bar-coding applications, integrated manufacturing, and electronic funds transfers.
The payment process: -should always be owned and managed by accounts payable. -should always be owned and managed by supply. -and the supply process should be aligned in policy and practice. -must include paper invoices to avoid legal liability. -has little impact on supply management.
and the supply process should be aligned in policy and practice.
A centralized supply structure is designed to: -capitalize on reporting line power. -maximize business unit autonomy. -hide the operating cost of supply management. -support broad job definitions. -spread purchasing power throughout the buying organization.
capitalize on reporting line power.
High-performing cross-functional supply teams: -are useful for every type and dollar value of purchase. -rely on a sequential process across functions. -concentrate most of the work at the back-end of the process. -require close supervision by senior management. -concentrate most of the work at the front-end of the process.
concentrate most of the work at the front-end of the process.
Organizational objectives and supply objectives typically are expressed: -differently, making it difficult to translate organizational objectives into supply objectives. -differently, providing the supply manager multiple opportunities to tap into organizational resources. -the same (survival, growth, financial, and environmental), making it easy to translate organizational objectives into supply objectives. -the same factors (quality, quantity, price, delivery and service), but long-term at the organizational level and short-term at the supply level. -in ways that are very specific to the organization, making it difficult to convey objectives to suppliers.
differently, making it difficult to translate organizational objectives into supply objectives.
Three major challenges exist when setting supply objectives and strategies: -adopting efficient electronic transaction systems, designing effective strategic supply processes, and increasing internal compliance with both. -effectively interpreting corporate and supply objectives, selecting appropriate actions to achieve objectives, and integrating supply information into organizational strategies. -hiring professionals educated specifically in supply management, providing them with technical expertise, and developing leadership skills for the long-term. -emphasizing strategic cost management, involving key suppliers early in the process, and measuring the reduction in total cost of ownership. -identifying internal stakeholders, building consensus among these stakeholders, and selling top management on the results.
effectively interpreting corporate and supply objectives, selecting appropriate actions to achieve objectives, and integrating supply information into organizational strategies.
Linking supply strategy to corporate strategy is: -essential only in manufacturing, and most have the mechanisms to link them.. -essential only in the service sector, and most lack the mechanisms to link them. -essential in all organizations, and most have the mechanisms to link them. -essential in all organizations, and many lack the mechanisms to link them. -non-essential in most types of organizations.
essential in all organizations, and many lack the mechanisms to link them.
The role of supply management is best captured by the following question: -how can supply help suppliers decrease costs? -how can supply and suppliers help decrease costs? -how can supply and suppliers help decrease costs and increase revenues? -how can supply help decrease costs and increase revenues? -how can supply help decrease costs?
how can supply and suppliers help decrease costs and increase revenues?
Small dollar value purchase orders can be efficiently and effectively managed by: -increasing the number of customized items. -implementing an e-procurement application. -putting purchases on separate purchase orders. -entering into contracts for each item. -giving buyers unlimited access to petty cash.
implementing an e-procurement application.
A formal request from a purchasing organization to a vendor to supply a specific quantity of goods to be delivered at a specific point in time: -requisition -purchase order -contract -planned order
purchase order
If the buyer does not have a clear and unambiguous description or specification and wants to find out which suppliers can deliver the best value when and where needed, he or she will typically issue a: -request for quotation (RFQ). -request for proposal (RFP). -request for information (RFI). -request for bid (RFB). -request for suggestions (RFS).
request for proposal (RFP).
The three options for soliciting business from potential suppliers are: -request for information (RFI), request for quotation (RFQ) and request for proposal (RFP). -request for quotation (RFQ), request for proposal (RFP) and request or invitation for bid (RFB or IFB) -request for quotation (RFQ), request for confirmation (RFC) and request for proposal (RFP). -request for information (RFI), request for proposal (RFP), and request or invitation for bid (RFB or IFB) -request for quotation (RFQ), request for price (RFP), and request or invitation for bid (RFB or IFB).
request for quotation (RFQ), request for proposal (RFP) and request or invitation for bid (RFB or IFB)
Close to 70 percent of the value of any given requirement is established when needs are recognized and described. Therefore, the following functions should work together during need recognition and description: -the primary user and specifier. -the primary user and supply. -the primary user, design engineering and supply. -the primary user, design engineering, supply and accounting. -the primary user, design engineering, supply and all other relevant functional areas such as accounting/finance, marketing and operations.
the primary user, design engineering, supply and all other relevant functional areas such as accounting/finance, marketing and operations.
Performance of the supply management function can be viewed in two contexts: -image-building and cost- driven. -price sensitive and hard-nosed negotiating. -trouble causing and reactive. -quality oriented and value- driven. -trouble avoidance and opportunistic.
trouble avoidance and opportunistic.
