Chapter 6

Besides the dollar value, items are considered strategic if (multiple answers) A) they improve the reputation of the organization. B) they allow access to new markets. C) they increase the risk of the organization. D) they reduce the revenue of the organization.

A, B

What are the TWO steps to the acquisition process when determining commercial equivalents? A) Translate needs into terms suppliers can understand. B) Determine what is needed and why. C) Make a best guess as to what the production team will need. D) Determine the price the purchaser is willing to pay.

A, B

Descriptions for supplies can be given using a variety of forms, supply personnels responsibility is to (multiple answers) A) verify the description and provide alternatives. B) alter the description as needed and provide alternatives. C) order as requested. D) alter the quantity as needed.

A, B, C

Supply chain management requires the evaluation of need under more than just strategic or traditional criteria, these newly added categories include (multiple answers) A) risk management B) political factors C) sustainability D) human resources

A, B, C

What are the difficulties when acquiring services? (multiple answers) A) Ensuring the proper timing of delivery. B) Ensuring adequate capacity. C) The ability to store services until they are needed. D) The inability to store for future use.

A, B, D

When supply chain managers consider logistic needs, the packaging can affect (multiple answers) A) environmental concerns B) disposal needs C) personnel concerns D) transportation requirements

A, B, D

Which items influence the decision of an organization for what needs are required to operate the business? (multiple answers) A) The location of the organization. B) The industry the organization is involved in. C) The language spoken by the organization. D) The size of the organization.

A, B, D

Corporations who use standardization and simplifications can see achievements in (multiple answers) A) improved quality B) fewer suppliers C) lower costs D) lower inventories

A, C

The THREE supply chain risk management categories are A) financial B) social obligations C) operational D) reputational

A, C, D

Engineering drawings used for procurement have limitations of (multiple answers) A) the cost to prepare drawings. B) the inaccuracy of the drawings compared to need. C) the low degree of perfection required. D) the cost to manufacture specialty items.

A, D

Innovation allows suppliers and purchasers to work together continually to improve (multiple answers) A) total cost of ownership. B) environmental impacts. C) the health and safety of employees. D) value.

A, D

How is using description by brand restrictive? A) Brand specific requirements can lower the price paid per item. B) Brand specific requirements can deprive the buyer of using other suppliers. C) Brand specific requirements are useful when the end user does not have a preference. D) Brand specific requirements can offer the buyer more suppliers.

B

Reviewing corporate need under a financial examination allows supply managers to help (multiple answers) A) increase competitiveness. B) improve return on assets. C) lift the company's financial ratings. D) comply with legal obligations.

B, C

Raw materials are basic substances in a (multiple answers) A) finished goods state B) natural state C) semi-processed state D) modified state

B, C, D

Specification data can be obtained from (multiple answers) A) consumer reports B) government standards C) private agencies D) the buying organization

B, C, D

The organization needs to be categorized under the traditional value proposition are evaluated under the criteria of (multiple answers) A) location B) service C) quality D) quantity

B, C, D

The total cost of ownership with capital assets includes (multiple answers) A) costs of materials used during production B) yield C) operating and downtime costs D) maintenance and repair costs

B, C, D

When is description by brand desirable? (multiple answers) A) End customers do not have preferences in favor of certain brands. B) The manufacturing process is secret or the item is covered by a patent. C) Specifications cannot be laid down with sufficient accuracy. D) The quantity bought is so small.

B, C, D

For repetitive purchases contract length is influenced by (multiple answers) A) legal requirements B) product or life cycle C) the purchase card to be used D) design stability

B, D

True or false: Additional criteria that have been added for supply chain managers to evaluate corporate need from has made supply management easier.

False

True or false: Requirements evaluated under the service criteria are easier to quantify than the remaining traditional criteria.

False

Commodity managers must be aware of ______________ conditions to ensure they meet supply and demand, price movements, and proper acquisition timing.

market

Supply need management is important for smaller businesses to maintain ______________ cash flow

positive

Maintenance, repair, and operating supplies deal with many __________ value purchases

small

Performance specification allows the _____________ to take advantage of the latest technology to provide the most suitable product. A) production team B) supplier C) buyer D) consumer

supplier

Organizations should operate in such a manner they _______________ government regulations instead of ________________ them.

support, opposing

Engineering drawings are commonly submitted with a form of descriptive __________

text

Greater ________________ is required for supply transactions to prevent financial scandals and avoid fines or citations.

transparency

Supply management is concerned with the ____________ of specific needs

value

Which method of description is confined to certain primary materials? A) description by market grade B) description by sample C) description by brand D) description by engineering drawing

A

ABC analysis is an inventory categorization method which consists of dividing items into three categories, A, B, and C: A being the most valuable items, C being the least valuable ones. A items make up about ____________ to ____________ percent for an organization

10, 20

The purchase price of a capital purchase is between _______ percent of total cost of ownership. A) 5 to 10 B) 30 to 50 C) 10 to 20 D) 15 to 30

30 to 50

When engineering or production needs to make the decision to purchase new capital equipment they have ____________ commonly recognized reasons to do so

8

A challenge with MRO purchases is A) keeping acquisition costs low. B) ensuring a supplier can be located. C) keeping acquisition costs high. D) ordering goods and services.

A

Every supply decision will be different, and supply professionals must A) use experience and judgment to make sound decisions. B) pass all regulation responsibility to suppliers. C) only include information on long-term contracts that ensure the organization passes any investigation. D) oppose political regulations that do not benefit the organization.

A

ABC manufacturing has decided to use a custom component to decrease the ability of competitors to copy their design, the disadvantage of this is A) the supplier will be easier to locate. B) the price will be lower for the part. C) the part is not readily available. D) the part is readily available.

C

The most significant cost for resellers is A) the price of advertising their services. B) the cost to store goods prior to selling. C) the price they pay for goods they resell. D) the cost to ship goods to customers.

C

When acquiring goods or services, the purchaser must determine A) the lowest selling price B) the cheapest sourcing options C) the best buy circumstances D) the highest buy circumstances

C

Every organization has specific needs, the value of these needs are categorized into three levels, they are: A) strategic, trade-off, additional current B) sourcing, traditional, and restricted current C) strategic, traditional, and restricted current D) strategic, traditional, and additional current

D

Which form of specification data requires extensive consultation and can be expensive? A) consumer standards B) standard specifications C) governmental standards D) individual standards

D

True or false: Unusual or infrequent purchases must be dealt with on a case by case basis.

True

ABC manufacturing wants to understand their business needs better, to do this they must first know who ___________ those needs

influences, requires, demands, or drives

Using or equal descriptions transfers responsibility for establishing equality to the ___________

bidder

Specification by material and method of manufacturing places the risk and responsibility on the ______________ organization

buying

Value proposition describes how ____________ will improve customer success and allow the organization to do better.

innovation

Supply chain for most organizations can be classified into seven categories of resale, MRO, services, other, ____________, _______________, _____________ A) components B) raw C) financial D) capital assets E) human resources

capital assets, raw, components

The _____________ refers to the time between purchasing the raw materials used to make a product and collecting the money from selling the product. A) cash conversion cycle B) conversion of assets C) supply cycle conversion D) accounts payable tracking

cash conversion cycle

What can an organization use to ensure supplier comply with labor concerns and human rights issues? A) codes of morality B) codes of ethical supply C) codes of conduct D) codes of supplier behavior

codes of conduct

A ______________ means the different methods by which the buyer communicates to the seller a clear, detailed picture of the required item.

description

The value of materials purchased by market grade is subject to __________ to ascertain the degree of compliance

inspection

Sustainable supply chains require supply managers to take both _____________ and _________________ into consideration.

environmental, social

Repetitive purchase contracts offer both pros and cons. Shorter contracts offer _________ to switch suppliers while longer contracts offer ____________ certainty

flexibility, price

Early supply and supplier involvement can ensure that products or services specified are procurable and represent ____________ value

good

_______________ standards set the regulations that organizations must meet when concerning employee health and safety, environmental factors, or consumer product safety.

governmental

Organizations must report all _____________, ________________, and _____________ to withstand investigations and avoid penalties

hedge positions, lease obligations, and long-term contracts