Business Logistics Test 1

Given the following make-buy information, what would be the break-even point? Fixed Costs- Make Option= $7500 Buy Option= $1500 Variable Cost- $ 4 $ 9 A. 1200 units B. 1708 units C. 690 units D. 460 units

A. 1200 units

When calculating Return on Investment, current assets include: A. Cash, Accounts Receivable, and Inventory B. Cash, Accounts Receivable, and Equipment C. Accounts Receivable, Equipment, and Real Estate D. Equipment, Buildings, and Real Estate

A. Cash, Accounts Receivable, and Inventory

While most public procurement is focused on goals similar to those of purchasing departments in the private sector, U.S. federal government purchases must comply with the: A. Federal Acquisition Regulation B. Fair Standards and Equitable Purchases Act C. Federal Code of Conduct for Procurement D. Services and Materials Acquisition Act

A. Federal Acquisition Regulation

Right-shoring refers to: A. An expansion of the supply chain B. Contraction activities within the supply chain C. An increase in the responsiveness of the supply chain D. A decrease in the responsiveness of the supply chain

B. Contraction activities within the supply chain

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. Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents

The primary goals of purchasing include all EXCEPT: A. Secure materials at the lowest cost B. Ensure the highest quality raw materials are purchased C. Improve the quality of finished goods produced D. Maximize customer satisfaction

B. Ensure the highest quality raw materials are purchased

Benefits derived from the implementing e-procurement systems include all of the following EXCEPT: A. Allows buyers to submit bids and suppliers to respond to those bids in real time B. Increases the accuracy in communication between buyers and suppliers C. Creates numerous additional job opportunities in the purchasing department D. Tracking bids and transactions is easier and faster

C. Creates numerous additional job opportunities in the purchasing department

Which of the following is NOT a form of countertrade? A. Barter B. Offset Wh D. Counter-purchase

C. Incoterming

Given the following make-buy information, what would be the break-even point? Fixed Costs- Make Option= $15000 Buy Option= $1250 Variable Cost- $ 5 $ 10 A. 917 units B. 2875 units C. 1083 units D. 2750 units

D. 2750

Which of the following can be classified as a 3PL? A. A company that offers warehousing services B. A company that offers transportation services C. A company that offers customs clearing services D. All of these

D. All of these

Which of the following is a system that aids in controlling inventory? A. MRP B. ERP C. AARP D. Both MRP and ERP

D. Both MRP and ERP

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. Supplier development

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 design and production of an end item D. No competent supplier presently produces the needed item

A. A firm lacks the technology or expertise to produce an item

The hybrid purchasing system, such as the one utilized by Harrah's, includes many benefits. In such a system the regional office preserves four fundamental purchasing rights. Which of the following is NOT one of those rights? A. Allow suppliers to bid for each purchase B. Select the supplier C. Use whichever pricing method is appropriate D. Monitor contacts with potential suppliers

A. Allow suppliers to bid for each purchase

One operational method for controlling and managing inventory is the implementation of a software system which can be referred to as: A. Material requirements planning (MRP) B. Demand capacity tracking (DCT) C. Inventory sourcing (IS) D. Demand process reengineering (DPR)

A. Material requirements planning (MRP)

When a material is not available in the warehouse and there is no current supplier for the item, the buyer must identify a pool of suppliers and issue a: A. Request for Quotation B. Purchase Order C. Contract for Sale D. Sales Order

A. Request for Quotation

If a distribution company that focused on warehousing and distribution of grocery items decided to purchase a chain of grocery stores, the distribution company would be exemplifying: A. Backward vertical integration B. Forward vertical integration C. Backward horizontal integration D. Forward horizontal integration

B. Forward vertical integration

The Uniform Commercial Code governs the purchase and sale of goods in the US except in the state of: A. Hawaii B. Louisiana C. Mississippi D. South Dakota

B. Louisiana

Assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements are all important issues that are most closely related to: A. Purchasing B. Operations C. Integration D. Distribution

B. Operations

According to the text, the FOUR important elements of the supply chain are: A. Purchasing, manufacturing, transportation, retail stores B. Purchasing, operation, logistics, integration C. Purchasing, manufacturing, logistics, transportation D. Purchasing, operations, manufacturing, distribution

B. Purchasing, operation, logistics, integration

Inventory Turnover can be calculated by: A. Ratio of average inventory cost over cost of goods sold B. Ratio of cost of goods sold over average inventory cost C. Ratio of inventory days in stock over average inventory cost D. Ratio of avert inventory cost over inventory days in stock

B. Ratio of cost of goods sold over average inventory cost

Which of the following is strategy usually employed by lean organizations in an effort to ensure continued quality compliance among suppliers and with internal production facilities? A. MRP II B. Six Sigma C. 3PL D. CAPS

B. Six Sigma

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. Strategic partnerships are seen as one of the foundations of supply chain management

Encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as: A. Progressive procurement B. Supplier management C. Right-shoring D. Supply chain performance management

B. Supplier management

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: A. Supplier certification programs B. Manufacturer certification programs C. Early supplier involvement D. Total Cost of Ownership initiatives

C. Early supplier involvement

Which of the following acronyms is NOT paired with its correct "translation?" A. TQM- Total Quality Management B. JIT- Just-in-Time C. MRP- Manufacturing Responsiveness and Planning D. ERP- Enterprise Resource Planning

C. MRP- Manufacturing Responsiveness and Planning

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as: A. Material Requisition B. Purchase Requisition C. Planned Order Release D. Traveling Requisition

C. Planned Order Release

The measurement of the impact of change in purchase spend on a firm profit before taxes, assuming gross sales and other expenses remain unchanged, is referred to as: A. Break-Even Analysis B. Direct Offset C. Profit- Leverage Effect D. Leveraging Purchase Volume

C. Profit- Leverage Effect

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. The limited (finite) capacity of one supplier

Which type of requisition is used for materials and standard parts that are requested on a recurring basis? A. Open requisition B. Blanket requisition C. Traveling requisition D. Recyclable requisition (Cyc-Rec)

C. Traveling requisition

Benefits derived from implementing an e-procurement system include all EXCEPT: A. Time Savings B. Real Time Access C. Trackability D. Decentralized Purchasing

D. Decentralized Purchasing

Which of the following acronyms is NOT paired with its correct "translation?" A. TQM- Total Quality Management B. JIT- Just-In-Time C. MRP-Materials Requirements Planning D. ERP- Estimated Response Parameters

D. ERP- Estimated Response Parameters

According to the textbook, the Las Vegas division of Harrah's Entertainment utilizes which if the following purchasing structures? A. Autocratic B. Decentralized C. Centralized D. Hybrid (centralized-decentralized)

D. Hybrid (centralized-decentralized)

Transportation management, customer relationship management, network design, and service response logistics are all important issues that are most closely related to: A. Purchasing B. Manufacturing C. Integration D. Logistics

D. Logistics

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. Purchase order

Which of the following illustrates Forward Vertical Integration? A. Microsoft starting a new division that designs and manufactures clothing B. Ford automotive buying additional machines for production C. Subway sandwich company buying a bakery to make the bread for their sandwiches D. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

D. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

A pre-printed order form for purchasing materials and standard parts that are requested on a recurring basis is referred to as: A. Material Requisition B. Purchase Requisition C. Planned Order Release D. Traveling Requisition

D. Traveling Requisition