Supply Chain Exam 2

Which of the following is the best description of a Preferred Supplier

A supplier who best meets your company's overall purchasing requirements

Costs incurred in the process of uncovering defects including testing, evaluating, and inspecting quality is categorized as which of the following?

Appraisal Cost

Why might a company decide to outsource (buy) a product they currently make?

Because they don't have the capacity in their internal factory to meet demand

In a spend analysis, suppliers with Low Value to the Company and a High Level of Supply Risk are considered?

Bottleneck Items

The application of ethical principles in business situations is known as:

Business Ethics

A supplier's financial stability is not an important factor in supplier selection

False

Companies that lack the expertise necessary to produce an item should consider insourcing

False

Industrial buyers purchase raw materials and other components for conversion into additional products but they do not purchase services or capital equipment:

False

The goal of Six Sigma is the elimination of waste and the minimization of the amount of all resources (including time) used in the operation of a company

False

When using weighted-criteria evaluation system with five or more categories suppliers should be ranked based on their score in only the two-highest weighted categories

False

Which of the following is NOT part of the EIGHT wastes identified through LEAN manufacturing?

Insufficient Capacity

A strategic partnership with a supplier

Is a mutual commitment over an extended time to work together to the mutual benefit of both parties

Which manufacturing process can be characterized as creating a custom product for each customer?

Job Shop

The term for a visual signal that authorizes production or the movement of materials to the net workstation is?

Kaban

Which of the following is an advantage of centralized purchasing

Leveraging Purchasing Volume

Which one of the following is NOT an element of Lean Manufacturing

Mass customization

The fastest or most immediate way that a purchasing person can directly impact the profitability of their company is to:

Obtain a price reduction on the items they are buying

The process a pre-qualifying supplier enters a website and at pre-designated time and date to try to underbid competitors is known as?

Reverse Auctions

Total Quality Management (TQM) is an integrated organizational effort to improve quality at every level. Which of the following isn't a part of TQM

Segmenting Customers

If you understand the Total Cost of Ownership (TOC) then you know:

That you need to consider all the related costs over the life of the product

Which one of the following best describes the five S's

These were originally Japanese words relating to industrial housekeeping

Which one of the following is NOT a reason to have a single supplier?

To spread the risk of a supply disruption

A purchase order is legally binding once it is officially issued by the buyer to the supplier

True

Drivers of Strategic Sourcing include, but are not limited to, reducing cots and delivery cycle times, and delivering more innovative products, in less time, and less expensively than competitors

True

In the context of Total Cost of Manufacturing, production per unit costs go down as volume goes up

True

In-sourcing is defined as reverting to in-house production when external quality, delivery, and services do not meet expectations

True

Most companies utilize internal supplier certification such as ISO 9000 rather than using external certification programs or conducting extensive supplier audits

True

Processing cost for small value purchases can be minimized through the use of corporate purchasing cards, blanket purchase orders, and blank checks

True

Supply management is a newer term that encompasses all acquisition activities beyond the simple purchase transaction

True

The practice of Supplier Co-Location involves a supplier's employee being embedded in a buyer's purchasing department to forecast demand, monitor inventory and place orders

True

The process to evaluate a supplier's capabilities , and their capacity to supply a product or service to a buyer is known as Supplier identification

True

products with short life cycles, volatile demand, high-profit margins, and relatively little competition, are known as Innovative products

True

The goal of a good supplier performance evaluation system is to provide metrics that are

Understandable, easy to measure, and focused on real value-added results

Which of the following is NOT part of the seven tools of Quality Control?

Voice of the customer

Which one of the following is NOT a reason for buying or outsourcing?

Lack of procurement personnel

Buying materials and components from suppliers instead of making them in- house, is known as?

Outsourcing

The philosophy that seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes is?

Six Sigma

A high Return on Assets is an indication that a company has a high level of assets compared to a low-profit margin

True

Among other advantages, preferred suppliers may provide capacity for meeting unexpected demand, and also provide cost efficiency due to economies of scale

True

Co-sourcing is the sharing of a process or function between internal staff and an external provider

True

Ethical sourcing policies should include such things as reporting of supplier compliance to stakeholders, and detailing ethical sourcing expectations to suppliers

True

In a Spend analysis, purchases that involve items representing a low percentage of the firm's total spend and having very little supply risk, are categorized as non-critical items

True

One of the issues associated with outsourcing is the burden of managing a manufacturing site

True

One of the sustainable sourcing strategies is to build intangible assets such as social and environmental responsibility

True

Outsourcing creates an opportunity for the company that is outsourcing a product, to reduce their own staffing levels

True

Sourcing Sustainability is described as the ability to meet the current needs of the supply chain without costing the company any additional time or money

True

Strategic Sourcing is a comprehensive approach for locating and sourcing key suppliers, which often includes the business process of analyzing the total-spend by material category

True

Supplier Relationship Management is a term that encompasses many of the activities beyond supplier selection and purchase order execution

True

The purchasing tool described as a "detailed capabilities document" used to determine a supplier's capabilities and interest in the production of the product or service is known as Request for Proposal:

True

The six sigma 5-step plan is referred to as DMAIC stands for:

Define, measure, analyze, improve, control

The primary goal of purchasing includes all of the following EXCEPT?

Develop as many suppliers as possible for each material or service

Sourcing teams purchase raw materials for conversion. They do not purchase services or capital equipment

False

The e-procurement process has many advantages. Which one of those listed below is NOT one of these advantages?

Support for a complex negotiation