Chang Final

If you earn $12/hr with probability 35%, $17/hr with probability 45%, and $20/hr with probability 20% what are your expected earnings per hour? a. $15.85 b. $16.42 c. $18.92 d. $13.27

$15.85

Which of the following is NOT a risk of buyback contracts? a. Results in a surplus inventory for supplier b. Requires the supplier to have an effective reverse logistics c. Buyer may have an incentive to push similar items that are not under buy-back d. Buybacks have a complicated supply chain to return products to the supplier

Buybacks have a complicated supply chain to return products to supplier

Forward buying a. applies to cases with a predictable seasonal patter b. Considers a combination of hand to mouth and forward strategies c. Is a policy for buying in advance of the time when the item is actually needed d. Is used when future availability of the product is not limited

Is a policy for buying in advance of the time when the item is actually needed

All of the following are barriers to global sourcing except a. Currency fluctuations b. Resistance to change c. Longer lead ties d. Labor required

Labor required

Which of the following is a characteristic of Pull Supply Chain Management? a. High Inventories b. Poor Communication c. Low Inventories d. Forecasting

Low inventories

The distributor and supplier are trying to ___ their own profits independently a. Create b. Maximize c. Limit d. Diminish

Maximize

Should TCO only be used for evaluating small purchases?

No

Which of the following is a scenario where you should not use forward buying? a. Price goes up b. No quantity discount offered c. Manufacturer offers a quantity discount over a short time period d. Future availability of the product is limited

No quantity discount offered

Which of the following is not one of the 6 steps for the spend analysis process? a. Cleanse the data b. Aggregate the data c. Find the number of suppliers by category d. None of the aboe

None of the above

___ is moving processes to a remote country (out of your own country) a. Outsourcing b. Offshoring c. Reshoring d. Free on board

Offshoring

In SWOT analysis of supply market, external factors refer to a. Strength and Weakness b. Opportunities and Threats c. Weakness and Threats d. Strength and Opportunities

Opportunities and Threats

Which of the following cost elements does not have to be paid for at the exact moment of the purchase? a. Warranty b. Installation c. Opportunity cost d. Cost of goods

Opportunity cost

True/ False: Speed and Responsiveness is an advantage of centralized purchasing

False

True/False: A company seeking to become more efficient than its competition would look to become less centralized

False

True/False: A spend analysis is a constant review of a firm's entire set of purchases

False

True/False: Assuming EOQ = 2000 units, placing an order for 2500 units would result in the fixed order cost exceeding the average holding cost

False

True/False: Center-led (hybrid) purchasing structure combines a decentralized approach for purchases common to several business units and centralized approach to unique requirements

False

True/False: Delivery date and receiving department info is closed for a blanket purchase order.

False

True/False: In a buy-back contract, the distributor takes all overstocking risk

False

True/False: Purchasing is much less than simply buying goods and services.

False

True/False: Suppliers prefer contracts with no buy-back agreement

False

True/False: The EOQ is always feasible.

False

True/False: The detection model is more effective and sustainable than the prevention model

False

True/False: When looking at a quantity discount with three different "tiers", you must only calculate EOQ or most feasible value once.

False

True/False: spend analysis is something that is done every day

False

What is a characteristic of a buy-back contract? a. Incentives for meeting target sales b. Full refund for limited number of unsold goods c. Buyer shares revenue with a supplier in return for discount wholesale price d. Partial refund for all unsold goods

Partial refund for all unsold goods

What is a characteristic of a buy-back contract? a. Partial refund for all unsold goods b. Buyer share revenue with supplier c. Full refund for unsold goods d. Provides incentives for meeting target sales

Partial refund for all unsold goods

Select the option that is NOT a supply chain flow A. Information Flow B. Product Flow C. People Flow D. Process Flow E. Cash Flow

People flow

Which is more effective and sustainable in quality management and control a. Prevention model b. Detection model

Prevention model

Which one of these costs is NOT associated with forward buying a. Warehouse storage expense b. The cost of tying up money in inventory c. Insurance cost d. Stockout costs

Stockout costs

What does "cleanse the data" mean in the steps of spend analysis? a. Create plots for your data to make sure that everything lines up b. Run a simulation to double-check the information you have gotten c. Find and correct errors in description, duplicate entries, etc. d. Check with the people that gathered all of the information and ask them if they think it is right

Find and correct errors in description, duplicate entries, etc.

When should hand to mouth purchasing not be used? a. Price goes down b. Emergency c. Getting goods using occasionally and not taken into stock d. Good used frequently that are taken into stock

Goods that are used frequently that are taken into stock

Which of the following falls under corporate level strategy? a. The chosen industry of business b. Improving product c. The medium of transporting goods d. None of the above

The chosen industry of business

What was the lesson learned for supply chains due to the Japan tsunami in 2011?

The size of the supply chain is underestimated, greater emphasis on risk management

The primary objective of supply base management and supplier development processes a. To have continuous improvement and growth of supplier capabilities b. To stop production of one supplier, but not the other c. To focus on process monitoring d. To reach both specification limits

To have continuous improvement and growth of supplier capabilities

What do we want to minimize? a. Total sourcing cost b. Units shipped out of the warehouses c. The cost of transportation d. Order size

Total sourcing cost

What company invented Just-in-Time supply scheduling in the 1970's?

Toyota

Which of the following is NOT an Inventory Related Cost? a. Holding Cost b. Order Cost c. Stock- Out Cost d. Transportation Cost

Transportation cost

Total sourcing cost= cost of gods + ___ a. Transportation costs b. Setup costs c. Storage costs d. All of the above

Transportation costs

True/False: A quantity discount is a financial incentive to encourage a buyer to purchase goods in multiple units or in large quantities

True

True/False: Breakpoints will give you the lowest total cost of ownership for a threshold if the EOQ is infeasible.

True

True/False: Contracts that encourage a distributor to purchase more and the supplier to take on more overstocking risk, lead to increases profit availability and supply chain profit

True

True/False: Demand at each warehouse must be met and supplier capacity cannot be exceeded

True

True/False: For a leverage product, competitive bidding should be promoted.

True

True/False: Functional strategy increases market share

True

True/False: Honest, straight forward, reliable, flexible, and comprehensive are the characteristics of an effective supplier selection

True

True/False: In a revenue-sharing contract, the buyer transfers a portion of the revenue from each unit sold to the end customer

True

True/False: Incoterms define at which point the ownership of products is transferred

True

True/False: Opportunity cost should be included in TCO Analysis?

True

True/False: Profits for both distributor and supplier tend to be higher using a buyback contract

True

True/False: Purchasing is a value added function and significant player in strategic cost management

True

True/False: Stratification method based on item's profitability is called Sales Method

True

True/False: The Chief Purchasing Officer has the authority for purchasing expenditures in Centralized purchasing structures

True

True/False: The distributor takes on all the risk in Supply Chain when ordering

True

True/False: The mixed buying strategy considers a combination of hand to mouth and forward strategies

True

True/False: When a buyer assumes all the cost and risks once the goods have been placed next to the vessel, the incoterm would be FAS

True

True/False: When computing the rank sum of a criterion, ri=1 indicates that criteria i is the most important

True

Blanket purchase orders: a)Used for recurring purchases b)Are a spot buy c)Are a Specialized Product d)Purchase Have closed delivery dates

Used for recurring purchases

All of the following are preferred for competitive bidding EXCEPT: a. Volume is low b. Marketplace is competitive c. No preferred supplier d. Clear specifications for the product

Volume is low

If the EOQ for a certain product is 5000 units but the minimum order size required by the supplier is 5100 units, should you still place the order? Why or why not?

Yes, because it is insensitive to small errors

(p-c)/(p-s) is the ____ ratio

critical

What are the four supply chain flows?

information, product, process, cash

What is holding cost?

the sum of all costs that are proportional to the amount of inventory physically on hand at any point in time

In order to reduce time to market, it is important to... a) Make your workers take less breaks b) Communicate with suppliers about requirements c) Lower COGS d) Increase overhead expenses

Communicate with suppliers about requirements

Which strategy gives the overall scope and direction of a corporation? a. Corporate Level Strategy b. Business Level Strategy c. Functional Level Strategy d. None of the above

Corporate level strategy

Using the rank sum method, which is considered least important? a. Quality (r=1) b. Cost (r=4) c. Technical capability (r=3) d. Delivery performance (r=2)

Cost (r=4)

What are the four core area of supplier quality management? a. Cost, technology, delivery, quality b. Cost, technology, revenue, quality c. Cost, profit, delivery, quality d. Cost revenue, profit, technology

Cost, technology, delivery, quality

A company uses a unique screw critical to a product manufacturing process that only a select few manufactures can make. What type of product is this? a) Leverage product b) Bottleneck product c) Routine d) Critical

Critical

Which product provides the most value and most supply risk? a. Bottleneck b. Routine c. Critical d. Leverage

Critical

Which equation determines the optimal order quantity for a buyback contract? a. (c-v)*Q-f b. critical ratio c. (c-v)*Q-f-b*E(# of unsold) d. none of the above

Critical ratio

What is not an advantage of Just in time Inventory a. Minimize inventory cost b. Collaboration between buyer and supplier c. Minimizes waste d. Guards against stock-out risks

Guards again stock-out risks

Which of the following describes a "push system"? a)Low Inventories b)High Inventories c)Waste reduction d)Better communication

High inventories

Which is not a drawback of Just-In-Time Inventory? a. Risk of running out of stock b. More planning required c. High inventory holding costs d. Not efficient system for dealing with the unexpected

High inventory holding costs

What was the major contribution to the shrimp population boom in Japan during 2011? Excessive Shrimp Breeding Human Carcasses Sushi Sanctions Kelp Infestation

Human carcasses

Which of these increases profits the least amount? a. Decrease COGS b. Increase Sales c. Decrease Overhead d. Increase Salesforce

Increase saleforce

Which of the following is not a purchasing objective? a. Develop Supply Base Management b. Manage the Purchasing Process Efficiently and Effectively c. Increasing your margins d. Support Organizational Goals and Objectives

Increasing your margins

The total cost of ownership is a trade-off between _____ and _____. a. Inventory Holding Cost, Price Discount b. Shipping cost, price discount c. Shipping cost, inventory holding cost d. Price discount, sell price

Inventory holding cost, price discount

What costs are associated with forward buying? a. Inventory holding costs b. Purchase costs c. End of life costs d. Stockout costs

Inventory holding costs

Find F(Q*) given price= 125, cost= 80, and salvage value= 20 F(Q*) >+ (p-c)/(p-s) a. 0.651 b. 0.5532 c. 0.4286 d. 0.89

0.4286

List the 6 major tasks of the purchasing process:

1. Identify user requirements 2. Evaluate potential suppliers 3. Competitive bidding or negotiation and supplier selection 4. Purchase approval 5. Release and receive product or service 6. Update supplier performance scorecard

How many outcomes are possible in the Prisoner's Dilemma? a. 2 b. 3 c. 4 d. infinite

4

When using hand to mouth strategy for Jan-June and the forward buying strategy for July-Dec, how many orders would you be placing for the year? a. 12 b. 7 c. 6 d. 1

7

A ___ is a periodic review, typically annually) of a firm's entire set of purchases a. Assumption b. Data aggregation c. Spend analysis d. Purchasing decision

Spend analysis

What is the point of a sourcing cost analysis? a. To reach the optimal sourcing plan b. To find the total cost c. A and B

A and B

What is mathematical optimization? a. A technique to find the solution with minimal cost b. A technique to find the solution for the best supplier c. A technique to find the solution with proper parameters d. A technique to find demand

A technique to find the solution with minimal cost

Which of the following include the stock out costs? a. Cost of emergency shipments b. Substitution to less profitable items c. Cost of customer loyalty loss d. All of the above

All of above

Hand to mouth buying is also known as a. Just in time buying b. zero stock buying c. All of the above d. none of the above

All of the above

Which is a main cost element in total cost of ownership? a. Cost of goods b. Acquisition costs c. Usage costs d. End of life costs e. All of the above

All of the above

Which of the following is a cost associated with Forward Buying? a. Warehouse storage expense b. Insurance cost c. The cost of tying up money that could be used elsewhere d. All of the above

All of the above

Which of the following is not a good time to use hand to mouth buying? a. When the price goes down b. During emergencies c. When you have limited working capital or storage space d. With perishable products e. All of the above

All of the above

All of the following are barriers to global sourcing EXCEPT: a. Lack of knowledge and skills concerning global sourcing b. Longer lead times c. Resistance to change d. Currency fluctuations e. All of the above are barriers to global sourcing

All of the above are barriers to global sourcing

Which is not a reason that suppliers offer quantity discounts? a. To compete with rivals who offer them b. To lock in customers c. To to allow sellers or manufacturers to reduce inventory by selling more units to incentivize buyers d. All of the above are reasons to offer quality discounts

All of the above are reasons to offer quality discounts

What is the most popular type of quantity discount? a. All units b. Incremental c. Individualized d. Bundled e. None of these choices are correct.

All units

What is the most popular type of quantity discount? a. All units b. Incremental c. Individualized d. Bundled e. None of these choices are correct.

All units

Why is spend analysis important?

Because you want to know how and what you are spending your money on

Which program did Campbell Soup utilize to increase the number of purchases? a. Spend and win program b. Bill and hold program c. Buy and wait program d. Refer and save program

Bill and hold program

You should use forward buying when a. the price of a product will go up b. the future availability of the product is not limited c. manufacturers offer discounts for a short period d. both A and B e. both A and C

Both A and C

___ measures, rates, or ranks ongoing supplier performance a. Report card b. Purchase requisition form c. Supplier performance management card d. Both A and C

Both A and C

Which of the following is an internal factor? a. Opportunities b. Strengths c. Weaknesses d. Threats e. Both b and c

Both b and c

Supply chain profit is the profit for ____ a. Distributors b. Suppliers c. Both distributors and suppliers d. Customers

Both distributors and suppliers

Referencing the Portfolio Analysis Matrix, low value products that are high in supply risk are referred to as: a. Routine b. Leverage c. Critical d. Bottleneck

Bottleneck

In optimization ___ are related to certain parameters (shipping costs and cost of goods) to calculate an objective function to be optimized (total sourcing cost) a. Dependent variables b. Independent variables c. Decision variables d. Constant variables

Decision variables

Is it easier to: a) Increase sales by 5% b) Decrease COGS by 8.3% c) Decrease overhead by 20% d) Have shrimp eat all of the dead bodies after the Japan Tsunami natural disaster e) Both increasing sales and decreasing COGS are equal

Decrease COGS by 8.3%

Hand to mouth is preferred when prices are: a. Increasing b. Decreasing c. Unchanging d. Unpredicatable

Decreasing

In a prisoner's dilemma, who takes all the risk and who takes no risk at all? a. Distributor, customer b. Customer, manufacturer c. Distributor, manufacturer d. Manufacturer, distributor

Distributor, manufacturer

Which of the following is NOT a constraint that needs to be put into excel? a. Every warehouse needs to be utilized b. Demand at each warehouse must be met c. Supplier capacity must be met d. Shipping quantities must be integers and non-negative

Every warehouse must be utlized

Which of these is not an important document for received purchase products? a. Material packing slip b. Bill of Lading c. Purchase requisition form d. Discrepancy report

Purchase requisition form

What is the average inventory of the product?

Q/2

Which type of contract allows distributors to receive a full refund for a limited number of unsold goods? a. Buyback b. Revenue-sharing c. Quantity flexibility d. Sales rebate

Quantity flexibility

Which type of contract is described by: "The supplier provides full refund for returned (unsold) items as long as the number of returns is no larger than a certain quantity" a. Buy-back contract b. Revenue sharing contract c. Sales rebate contract d. Quantity flexibility contract

Quantity flexibility contract

Which is not one of "The Five Rights" a. Right quality b. Right time c. Right price d. Right people e. Right quantity

Right people

Which one of these is not one of "the five rights"? a. Right Quality b. Right Quantity c. Right place d. Right price

Right place

What risk do you run utilizing "Just in Time '' inventory management strategy?

Run the risk of running out of stock

What 3 methods can be used in ABC analysis inventory stratification?

Sales method, GMROII method, Hits method

Why would a company want to used Push SCM over Pull SCM?

Seasonal demands

Which of the following is NOT an inventory related costs? a. Ordering cost b. Set up cost c. Holding cost d. Stock-out cost

Set up cost

Which of the following is NOT key supplier evaluation criteria? a. Cost structure b. Shipping speed c. Quality system and performance d. Process and technological capabilities

Shipping speed

The leverage effect of purchasing refers to: a) Increase safety stock requirements b) Small reduction on COGS that leads to significant improvement in profitability c) Large reductions in one area to reduce safety stock e) The effect of increased order variability within the supply chain

Small reduction on COGS that leads to significant improvement in profitability

Goals are ________ but objectives are ________. a. Specific; Broad b. Broad; Specific c. Internal; External d. External; Internal

Specific, broad

Which of the following is not an advantage of centralized purchasing a. Able to leverage purchase volumes b. Reduce duplication of purchases c. Development of specialized expertise d. Speed and responsiveness

Speed and responsiveness

Which of these is not included in TCO? a. Usage costs b. End of life costs c. Acquisition costs d.Strategic costs

Strategic costs

Which purchasing objective is most critical? a) Supply continuity b) Low prices c) Achieving the" five rights" d) Supporting organizational goals and objectives

Supply continuity

Which of the following is not true? a. Opportunity cost will impact a TCO model. b. TCO models should be used for evaluating all purchases. c. TCO calculates the present worth of total costs over an asset's life cycle. d. To compare suppliers, you should calculate TCO for each option.

TCO models should be used for evaluating all purchases