Supply Chain- Exam 2

Which Lean related process can be described as a strategy to increase the level of services to consumers through close cooperation among retailers, wholesalers, and manufacturers?

Efficient consumer response

In the context of total cost manufacturing (TCM), in general terms, procurement, manufacturing, and transportation per unit costs each go down as volume goes up

True

A key suppliers activities to help the buyer's company reduce cost, improve quality and reduce new product development time beginning with the initial design phase, are known as

Value engineering

The application of ethical principles in business situations is known as

business ethics

The best supplier candidates for supplier relationship management include all of the following except

developmental suppliers that need to make improvements

If you want to develop strong supplier relationships, you would choose?

Single supplier

The manufacturing strategy in which the product is designed, engineered, and built to specifications only after the order has been received is called what? It is used when products are unique and extensively customized for the specific needs of individual customers.

Engineer-to-order (ETO)

Cost associated with investigating the need for a purchased material

Pre-transaction cost

Cost for a site visit to qualify a new supplier

Pre-transaction cost

An arrangement where a representative of the supplier is embedded in the buyer's purchasing group to forecast demand, monitor inventory, and place orders.

Supplier co-location

A strategic partnership with a supplier:

is a commitment over an extended period to work together to the mutual benefit of both parties

In which sourcing category would an item typically be classified, if it is considered to be high value, low risk, and there are multiple potential suppliers?

Leverage

If you want to create transportation economies, you would choose?

Single supplier

Which one of the following is NOT one of the seven tools of quality control

Hysterical Charts

Which of the following is NOT one of the keys to successful strategic partnerships?

Building independent objectives

If you want to reduce the risk of a supply disruption, you would choose?

Multiple suppliers

If you wanted to obtain the most information, you would choose?

Multiple suppliers

Cost for replacing defective finished goods

Post-transaction cost

This type of inventory is generally used for a very specific purpose or future event, and for a defined period of time.

Strategic stock

Cost associated with a late delivery

Transaction cost

Cost for closing out the purchase order

Transaction cost

Cost to transport purchased materials

Transaction cost

payment for the purchased materials

Transaction cost

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

True

Forward vertical integration refers to a company acquiring one or more of their customer organizations

True

Candidates for a supplier certification program include suppliers who meet one of more of the following criteria, EXCEPT

A supplier who has a minimal number of significant negative quality related incidents for a specified time period

Which manufacturing strategy is described as a manufacturing strategy where products ordered by customers are produced quickly and are customizable to a certain extent?

Assemble to order

The term used to describe a debt secured by a bidder for the purpose of providing a guarantee that the successful bidder will accept the contract once awarded, is known as

Bid bond

Item B is low value, high risk, and there are a small number of alternative suppliers

Bottleneck

In which item category would be the sourcing strategies of maintaining safety/strategic stocks, developing contingency plans, strengthening relationships, and searching for alternatives, be appropriate?

Bottleneck items

Reorder point

Calculation = Demand of 750 per month divided by 30 days in a month = 25 units per day Demand of 25 units per day x 50 days of supplier lead time = 1,250 units to cover demand during the supplier lead time to deliver (i.e., replenish inventory). 1,250 units to cover demand during supplier lead time + 625 units of safety stock = reorder point of 1,875 units

Lean is a disciplined, statistical-based, data-driven methodology for identifying and removing the causes of defects and minimizing variability in manufacturing and in business processes

False

Item A is high value, low risk, and there are multiple potential suppliers

Leverage

What is the term for starting the production of finished goods only after a customer's order is received?

Make-to-order

Item D is low value, low risk, and there are lots of potential suppliers

Non-critical

This type of inventory is in the transportation network and the distribution system, being held by wholesalers, distributors, retailers, and consumers.

Pipeline inventory

Cost of warranty repairs

Post-transaction cost

Cost to understand suppliers needs and operations

Pre-transaction cost

A sourcing technique where pre-qualified suppliers enter a website and at pre-designated time and date, and try to underbid competitors to win the buyer's business

Reverse auction

In which sourcing category would an item typically be classified, if it is considered to be high value, high risk, and there are few suppliers, but they are excellent?

Strategic

Suppliers directly manage buyer inventories to reduce the buyer's inventory carrying costs and avoid stockouts for the buyer

Vendor managed inventory

Which sourcing concept involves a supplier directly managing the buyer's inventories to reduce the buyer's inventory carrying costs and avoid stockouts

Vendor managed inventory

when using a 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

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as?

strategic sourcing

When a company utilizes a "make to stock" strategy, the company is also said to be using a "pull" business model

False

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

LEAN layouts

one of the main reasons to consider purchasing from an international global source is the opportunity to improve quality, cost, and delivery performance

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 leverage purchases

False

Which of the following new technologies can improve supplier selection and increase the effectiveness of supplier relationship management

Artificial intelligence

A type of inventory system that issues an order whenever a withdrawal is made from inventory.

Base level stock system

An arrangement where a specific quantity of an item is stored at the buyer's location. Once the inventory is used, the item is replaced by the supplier, with the full knowledge and approval of the buyer

Co-managed inventory

This type of inventory depletes gradually as customer orders are received, and is replenished cyclically when supply orders are received.

Cycle stock

All of the following are reasons for making an item in your own company operations, EXCEPT for which one?

Due to insufficient capacity in your company operations

Duties, taxes, or customs imposed by the host country for imported or exported goods, are known as tenders.

False

ISO 14000 certification is a series of management and quality standards in design, development, production, installation, and service

False

The purchasing function is one of the most value-enhancing functions in any organization, and therefore, it is not necessary to periodically monitor the purchasing function's performance against a set of standards or industry benchmarks

False

In which item category would the sourcing strategies of consolidating volumes as a negotiation tool, using the competitive marketplace to reduce costs, and automating supplier interfaces to minimize process related costs, be appropriate?

Leverage items

If your purchase volume is very small, you would choose?

Single supplier

performance measures should be S.M.A.R.T which is an acronym that means

Specific, Measurable, Achievable, Relevant, Time-oriented

Item C is high value, high risk, and there are a few suppliers, but they are excellent

Strategic

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 Certification

Which of the following is NOT one of the primary goals of purchasing?

Increase the supplier base

A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers.

Linear barcode

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

Obtain a price reduction on the items they are buying

Which quality expert is credit with introducing the concepts of zero defects

Philip Crosby

The inventory control tool that does not require direct line of sight to read the tag on a product(s).

Radio frequency identification

The purchasing tool described as "A standard business process whose purpose is to collect written information about the capabilities of various suppliers" is known as?

Request for information

Backward vertical integration refers to a company acquiring one or more of their sources of supply

True

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

Understandable, quantitative, and focused on real value-added results

The concept of distributive negotiations refers to both sides work together to maximize the outcome or create a win-win result

false

If a company's' net income (i.e., profits before taxes) is $8.1 billion US Dollars and it has total assets of $135.0 Billion US Dollars, the Return on Assets (expressed as a percentage) is

6%

This type of inventory is needed to run the manufacturing operations and the business, but does not end up as part of the finished product.

Maintenance, Repair, and Operating (MRO) supplies

Cost associated with the loss of customer goodwill

Post-transaction cost

This type of inventory is above and beyond what is actually needed to meet anticipated demand, and is maintained o protect against fluctuations in demand or supply

Safety stock