SUPPLY CHAIN TEST BANK

Companies that lack internal expertise in a specific functional area would likely consider insourcing

F

Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.

T

Costs associated with supplier certification, investigating alternative suppliers, and investigating alternative delivery options can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

A

On occasion, firms assist suppliers, new or old, to improve their processing capabilities, product or service quality, delivery effectiveness, and cost performance by providing the required technical and financial assistance. This is referred to as: a. Supplier development b. Outsourcing c. Centralized purchasing d. Supplier hybridization

A

Which of the following would be a good reason to outsource (buy) versus making? a. A firm lacks the technology or expertise to produce an item b. To utilize existing capacity within a company's own firm c. To have more direct control over the deign and production of an end item d. No competent supplier presently produces the needed item

A

Benchmarking is: a. A system of performance metrics that seeks to motivate suppliers to perform better. b. A practice where companies attempt to learn and apply the best practices of other companies. c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

B

Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

B

Which of the following statements is FALSE? a. More than 50% of each sales dollar typically goes towards covering supply chain costs b. Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents c. Electronic procurement systems can aid a company in saving both time and money d. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing.

B

Which of the following statements is TRUE? a. Supply chain management was invented by the auto manufacturing industry b. Strategic partnerships are seen as one of the foundations of supply chain management c. Purchasing is seen as the final and most difficult step in the supply chain d. Service response logistics is the digital distribution of services

B

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.20), Cost(0.50). The scores for each category are shown below. Which of the following companies has the highest total score? a. Company A: Quality(90), Delivery(80), Cost(60) b. Company C: Quality(70), Delivery(80), Cost(80) c. Company B: Quality(70), Delivery(90), Cost(80) d. All companies scored the same.

C

Direct benefits of ISO 14000 include: a. Reduced defect rates b. Improved on-time delivery rates c. Reduction of pollution emission d. All of these

C

Successful modern supply chain management typically includes the practice of: a. Keeping high inventories throughout the supply chain b. Always purchasing materials with the lowest per unit cost c. The sharing of information between supply chain partners d. Leadership through the practice of issuing ultimatums to your supply chain partners

C

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Classify supplier items as either innovative or functional b. Define the goals of the supply chain and check for consistency with products and firm strategy c. Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development d. Identify and evaluate the capabilities of suppliers and then identify areas which could be improved

C

Which of the following is a reason that single sourcing is considered risky/bad? a. The buyer's required ordering quantities are very low b. Larger orders make quantity discounts more likely c. The limited (finite) capacity of one supplier d. Decreases the item to item quality variability of items purchased

C

A certain supply chain is made up of: 1. Raw Materials Supplier 2. Components Manufacturer 3. A firm that manufacturers Sub-assemblies 4. End Item Manufacturer 5. Wholesale Distributor 6. Local Retail Chain Warehouse Who is considered the End Item Manufacturer's second tier supplier? a. Raw Materials Supplier b. Wholesale Distributor c. The final end item consumer d. Components Manufacturer e. Local Retail Chain Warehouse

D

Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers? a. Lower levels of quality from their suppliers b. Lower levels of service from their suppliers c. Deteriorating buyer-supplier relationships d. All of these

D

The management of the firm's external resources through identification and selection of suppliers, management of supplier relationships, and monitoring and rewarding supplier performance in an effort to support the long-term goals of the organization is called: a. Buyer-supplier integration b. Acceptance sampling c. Procurement rationalization d. Strategic sourcing

D

Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria? a. Allows firm to screen out poor performing suppliers in its present supplier base. b. Allows firm to screen out undesirable suppliers that they may be considering for future purchases. c. Allows firm and its suppliers to develop a better corporate relationship d. All of these

D

Which of the following documents is considered the buyer's offer to purchase products or services from a supplier, is legally binding once the supplier accepts it, and usually has the terms and conditions of purchase preprinted on the back of the document? a. Purchase requisition b. Planned order release c. Material requisition d. Purchase order

D

Which of the following is important in developing successful relationships in a partnership? a. Commitment by top management b. Interpersonal 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

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base.

F

Centralized 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.

F

Effective supply chain management relies on competitive bidding, corporate privacy, and contracts based on short-term performance.

F

If the break-even point in a typical make-buy scenario is 24,000 units and 8,000 units are required, than the firm should choose to make.

F

The WTO is a trade organization seeking to establish trade barriers that will protect member countries by excluding nations that pose an economic threat.

F

The bullwhip effect is the result of companies producing excessive defective products; defective items are whipped back from the end customer toward the manufacturer of the defect.

F

According to the textbook, the keys to successful supply chain management include trust and honest, accurate communications between supply chain partners

T

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.

T

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.

T

Paperless transactions are now possible through e-procurement and Web-based services, these would all be considered sustainable business practices.

T

While Inventory turnovers can be calculated a number of different ways, a common way to calculate inventory turnovers is by dividing the cost of goods sold by the average inventory at cost.

T