MGmt 432.
Which is usually not included in writing the SOW? Quality monitoring system Total cost of ownership Personnel plan Performance and payment bonds Metrics
Total cost of ownership
Which of the following statements is not true about trust? Trust is one of the key factors that differentiate the three classes of relationships. The simplest definition of trust according to the textbook is "being confident that the other party will do what it says it will do." Transactional relationships are completely void of trust Some level of trust must be present in all three types of relationships The level of trust increases with collaborative relationships and becomes an essential characteristic with strategic alliances
Transactional relationships are completely void of trust
Which of the following is not a step in the "Six-step Environment Monitoring Strategy" presented in Chapter 3? -"Identify the major suppliers and customers of the materials and services." -"Build a model that predicts the material (or service) behavior." -"Monitor the model to determine its accuracy." - "Run quantitative models to confirm your strategy" -"Continuously make improvements as new relationships are understood and additional data becomes available."
"Run quantitative models to confirm your strategy"
Which of the following is generally not true about supply management and the bottom line? -Purchased items account for a large percentage of the cost of goods sold. Hence, a reduction in cost of purchased goods has a major impact on the bottom line -A Euro increase in sales is equivalent to a Euro decrease in materials cost in impacting the bottom line -Outsourcing allows firms to focus on their core competencies, which reduced potential for waste, which then can improve the bottom line -A dollar saved in materials cost is usually considered a dollar increase in profit, which directly translates into bottom line savings -Supply management can work collaboratively with suppliers to discover opportunities to lower costs, which ultimately improves the bottom line
A Euro increase in sales is equivalent to a Euro decrease in materials cost in impacting the bottom line
Hold back critical information from the alliance partner, just in case Longer term contracts Reduction of risk for suppliers Reducing total costs A focus on price Improvement of processes
A focus on price
Strategic sourcing differs from tactical purchasing in that this activity periodically: analyzes the organization's spend analyzes the supply market develops sourcing strategy and plans outsources basic business services such as security A, B, and C only
A, B, and C only
Developing and managing collaborative relationships require supply professionals that possess the all of the following skills and attitudes except one in the following list. Which skill in the following list is not required? Recognize the benefits of collaboration Ability to identify, obtain and use data Able to work in chaos and uncertainty Agile, flexible, and highly Ability to develop information systems
Ability to develop information systems
Which of the following bullets is not one of the considerations to include when writing specifications? Design and marketing requirements Accounting requirements Manufacturing requirements Inspection's requirements to test materials Stores' requirement to receive, store, issue material
Accounting requirements
The importance of supply management in any specific firm is determined by the following factors: -availability of materials and services -absolute dollar volume of purchases -percentage of product cost represented by materials and services -types of materials and services purchased -All of the above
All of the above
Which of the following is not one of the tips on writing an effective S.O.W. given in the textbook? Limit abbreviations to those in common usage Include procedures Do not over specify or overstate Always integrate escape clauses Eliminate extraneous statements
Always integrate escape clauses
From a strategic level, which of the following items is the most logical to outsource? -An item that can be bought and sold in a commodity exchange -An item that is critical to the success of the product -An item that requires specialized design, manufacturing skills or equipment -An item that fits well within the firm's core competencies
An item that can be bought and sold in a commodity exchange
Which of the following is not an action to develop and manage trust? Senior leaders at both firms act as champions A communication system is developed Base negotiations on the zero-sum game Actions to develop and measure trust are created Risks and rewards are addressed openly
Base negotiations on the zero-sum game
Which bullet is not true of the world-class stage of SM? Supply management a core competence Strategic sourcing Correct Bottom line impact: overhead Manage risk Emphasis: total cost relationships
Bottom line impact: overhead
Which bullet is not true of the world-class stage of SM? Time based competition Bottom line impact: overhead Virtually defect free materials and services Leverage supplier technology integrated supply strategy
Bottom line impact: overhead
Which of the following questions does not typically belong on a value-engineering checklist? -Can more parts be used to achieve the same quality? -Can you make the item less expensively in your plant? -Is the item properly classified for shipping purposes to obtain lowest transportation rates? -Can cost of packaging be reduced? -Are suppliers contributing suggestions to reduce cost?
Can more parts be used to achieve the same quality?
In analyzing each part in VA/VE, which is not a typical question asked? -Can any part be eliminated without impairing the operation of the complete unit? -Can the design of the part be simplified to reduce its basic cost? -Can the design of the part be changed to permit the use of simplified or less costly production methods? -Can multiple parts be sourced that perform the same function? -Can less expensive but equally satisfactory materials be used in the part?
Can multiple parts be sourced that perform the same function?
What approach should attorneys who are involved in supply management embrace? Transactional Aggressive Conservative Collaborative Adversarial
Collaborative
Which of the following is not a typical purpose of specifications? Communicate what to buy Communicate suppliers what is required Establish the intangible services to be provided Establish the standards for inspections, tests, and quality checks Communicate to upper management the need
Communicate to upper management the need
Which of the following is not associated with the development phase of the design process? Questioning whether the objectives were met Value engineering Design analysis Component availability Viability analysis
Component availability
Which bullet is not true of the proactive stage of SM? Reporting: upper management Data: facilitates sourcing and pricing Fulfill social responsibilities Confirm actions of others Engage in electronic commerce
Confirm actions of others
Which of the following is not an attribute of alliances? Continuous improvement Contracts that are difficult to interpret Interdependence and commitment Atmosphere of cooperation Informal interpersonal connections
Contracts that are difficult to interpret
Which of the following is not one of the recommendations given in the textbook for supply management to do so that the supply department's involvement in design is viewed by engineering as an asset and not a nuisance? -Convince upper management to establish policies that force engineering to coordinate with supply management on the design process -Supply Managers must acquire skills and knowledge -Learn how to read engineering drawings -Learn technical terms -Meet with supplier's sales personnel to review technical information about products
Convince upper management to establish policies that force engineering to coordinate with supply management on the design process
Which of the following is not an attribute of institutional trust? Sharing information is a means of developing trust Based only on institutional integrity Conflict in the relationship is openly addressed Rights, desires, and opinions are considered Firms have mutual goals
Correct Based only on institutional integrity
Which of the following is not an alternative method of purchasing construction services presented in the textbook? Conventional Method Correct Cost Plus Discretionary Expenses Design and Build, Agreed Price Method Design and Build, Cost-Reimbursable Method The Owner as a Contractor
Cost Plus Discretionary Expenses
Which of the following bullets is not one of the considerations to include when writing specifications? -Country of source for the part or component in the design -Supply management's requirement to procure material -Production control's and supply management's requirement to substitute materials -The total firm's requirements for suitable quality at the lowest overall cost -The total firm's requirement to use commercial and industrial standard material
Country of source for the part or component in the design
The best way to insure interface with key business functions is: Policy Statements Directives from upper management Cross functional teams Use of meetings Monthly conferences
Cross functional teams
Which one does not contribute to the potential conflict between design engineers and supply management professionals? Policy Statements Directives from upper management Correct Cross functional teams Use of meetings Monthly conferences
Cross functional teams
Which of the following is not one of the outcomes that collaborative relationships tend to foster? Decreased information sharing Increased investment in R & D Increased investment in training Increased investment in equipment Better focus on customer needs
Decreased information sharing
Which bullet is not true of the clerical stage of SM? Relationships: personal Design: suppliers are involved Bottom line impact: overhead Reporting: very low level Data: not available
Design: suppliers are involved
Which of the following is a consideration that favors making a product? -Limited production facilities -Cost considerations dictate that it is less expensive to buy -Desire to maintain a stable work force in a period of reduction of sales -Small-volume requirements -Suppliers' specialized know-how
Desire to maintain a stable work force in a period of reduction of sales
Which of the following is not an action to develop and manage trust? -Contract relations focus on continuous improvement -Team and relationship skills are developed early -A contracting philosophy and a legal infrastructure are designed to the relationship -Develop multiple backup suppliers to assure continuity of supply -Institutional trust is measured and managed
Develop multiple backup suppliers to assure continuity of supply
Which of the following is not one of the four formats for statements of work? -Performance S.O.W., which details everything the buyer wants -Functional S.O.W., which defines what the buyer is "trying to do" -Design S.O.W., which is the most detailed type of statement of work -Development S.O.W., which specifies the assistance that a buying firm must provide the supplying firm during the length of the contract -Level-of-Effort S.O.W., which is a specialized version of the performance statement of work
Development S.O.W., which specifies the assistance that a buying firm must provide the supplying firm during the length of the contract
Which of the following activities or steps was not included in the typical framework for outsourcing provided in the textbook? Development of a strategic roadmap Development of a decision flowchart Development of a tactical roadmap Development of a transition back plan Development of a review system
Development of a tactical roadmap
One of the key reasons for a proper interface between design engineering and supply management is: Early supplier involvement can reduce design costs and time to market It reduces conflict on specifications It helps reduce inventory It improves ROI It improves quality
Early supplier involvement can reduce design costs and time to market
Which bullet is not true of the mechanical stage of SM? Engage in eCommerce II Transactional focus React to requisitions Not involved in key source selections Emphasis: purchase price
Engage in eCommerce II
Which of the following is not a tip given in the textbook for selecting service contractors? Partner with users Engage in reciprocity Learn from the past Update specifications Minimize assumptions
Engage in reciprocity
Which of the following is not an approach in developing balanced specifications from the perspective of a supply professional? Informal Approach Supply Management Coordinator Approach Engineering Approach Consensus Development Approach Cross-Functional Approach
Engineering Approach
Which of the following is a complex specification based on the categorization given in the textbook? Performance Specifications Function and Fit Specifications Brand or Trade Names Engineering Drawings Samples
Engineering Drawings
Which action is not necessary in implementing SM? -Senior management must recognize supply management's critical nature to the firm -Senior management must support the required transformation of supply management to world class -Firms must know where they are in relation to where they want to be -Firms must benchmark best-in-class practices and develop metrics -Firms must force their suppliers into world-class compliance
Firms must force their suppliers into world-class compliance
Which of the following is not one of the issues that affect a supplier's assessment of a buying firm? Cash Flow Openness and Approachability Availability Professionalism Gifts and gratuities
Gifts and gratuities
Which of the following is not an action to develop and manage trust? Hold back critical information from the alliance partner, just in case Negotiation is used as a trust-building opportunity Both firms work together on technology plans Technical personnel from both firms visit the other Contractual relations are designed to enhance trust
Hold back critical information from the alliance partner, just in case
Which of the following is not a reason to investigate the make or buy decision at the tactical level? -If you currently outsource and the supplier suddenly has poor performance -Changing sales demand in the short term -Restricted manufacturing capability due to a breakdown -Increased manufacturing capability exists due to reduced sales of other items -If the part under consideration is still in the design stage
If the part under consideration is still in the design stage
Why does supply in non-manufacturing organizations have as much impact on profits as it does on manufacturing firms? -The global nature of services -Competition in the service industry -The nature of personal services -Type of suppliers -In the absence of engineering departments, supply management must often be the leader in determining requirement
In the absence of engineering departments, supply management must often be the leader in determining requirement
Which of the following is not one of the tips on writing an effective S.O.W. given in the textbook? Explain the interrelationship between tasks Identify all constraints and limitations Include standards that will make performance measurement Include clause for punitive damages to assure compliance Be clear about phase requirements
Include clause for punitive damages to assure compliance
Which of the following is not an organization that can assist as a source of standards in the United States? American Society for Quality Society of Automotive Engineers Society of Mechanical Engineers American Institute of Electrical Engineers International Society for Standardization
International Society for Standardization
Which of the following is not an attribute of institutional trust? It can be developed quickly Trust and relationship are viewed as investments Partners have access to other's strategic plans Relevant costs and forecasts are shared When key individuals leave, fingerprints are left behind that hold the relationships together
It can be developed quickly
Which of the following points is not considered a danger of outsourcing? Loss of cost control Ineffective management Loss of confidentiality Double outsourcing Lack of responsibility
Lack of responsibility
Which is usually not included in planning the statement of work? Performance measurements Deliverables Delivery and performance schedule Service levels Local buying requirements
Local buying requirements
Which of the following is not a transactional relationship characteristic? Long-term contract An absence of concern One of a series of independent deals Costs, data and forecasts are not shared Price is the focus of the relationship
Long-term contract
Which of the following points is not considered a danger of outsourcing? Loss of control Loss of client focus Loss of centralization Loss of clarity Loss of cost control
Loss of centralization
Which of the following is not a disadvantage of transactional relationships? -Lowest Total Cost of Ownership is usually forced out of suppliers -Suppliers provide the minimum service required -Less effective performance by suppliers -Customers are subject to more supply disruptions -Supplier is not motivated to invest time and energy development of buyer's products
Lowest Total Cost of Ownership is usually forced out of suppliers
In the investigation phase, the development of alternatives includes all of the following activities except one in the list. Which activity does not fit? Make or Buy and Outsourcing Analysis Select Components, Technologies, and Supplies Stress Testing Marketing Analysis Failure Analysis
Marketing Analysis
Which of the following activities is typically not conducted in the production phase of the design process? -Process Control -Material Availability Research -In Process and Final Testing -Adjust and calibrate the performance -Eliminate defects before much value is added to the product
Material Availability Research
Which of the following is a complex specification based on the categorization given in the textbook? Function and Fit Specifications Material and Method-of-Manufacture Brand or Trade Names Market Grades Qualified Products
Material and Method-of-Manufacture
Which of the following is a consideration that favors buying a product? Control over quality Multiple-source policy Design secrecy required Unreliable suppliers Desire to maintain a stable work force in a period of reduction of sales
Multiple-source policy
Which of the following is not an attribute of alliances? Internal infrastructures to enhance learning Openness in all areas of the relationship Negotiations result in one winner A living system A shared vision of the future
Negotiations result in one winner
Which one of the following points is not a reason that Netsourcing has become popular? -Netsourcing enables a quick e-business presence -Netsourcing provides supply managers that flexibility to make changes -Netsourcing can help create a sustained performance -Netsourcing can provide support without the need to train or hire specialized personnel -Netsourcing can completely replace supply management using intelligent agents
Netsourcing can completely replace supply management using intelligent agents
Which of the following external environmental factors can supply managers ignore? -Changes in legislation -Consolidation among suppliers. -Wars and other conflicts, including terrorism -labor relations, unions, wages, etc. -None of the above - because supply managers must monitor all external conditions that may impact resource availability, as well as other factors that may have a significant impact upon organizational needs and capabilities.
None of the above - because supply managers must monitor all external conditions that may impact resource availability, as well as other factors that may have a significant impact upon organizational needs and capabilities.
Which of the following is not an attribute of alliances? Ethics take precedence over expediency Adaptable in the face of change Penalties are used to guide performance Win-win negotiations Executive level commitment
Penalties are used to guide performance
Which of the following is not a tip given in the textbook for selecting service contractors? Minimize assumptions Encourage questions Facilitate comparison Play hardball Plan evaluation
Play hardball
Which of the following is a situation wherein an alliance may be appropriate? High Switching Likelihood with High Switching Costs No Partnership/Alliance-Capable Supplier in the Geographic Area No Hard Savings from Partnership No Internal Customer Buy-In Price is Stable
Price is Stable
Which is usually not included in planning the statement of work? Work approvals Process flows in the supplier's facility Use of subcontractors Authorized personnel Exhibits, schedules, and attachments
Process flows in the supplier's facility
What should be the relationship between supply management and logistics? Logistics department plays the dominant role Supply management plays the dominant role Professional and excellent regardless of their task No relationship An adversarial relationship
Professional and excellent regardless of their task
Which of the following is not one of The Four Phases of Supply Management? Generation of Requirements Sourcing Pricing Profit Sharing Post Award Activities
Profit Sharing
The five "right objectives" of purchasing are -Quality, Quantity, Price, Time, Place -Cost, Service, Specs, Time, Quantity -Place, Time, Price, Ethics, Contract -Agent, Supplier, Contract, Price, Quantity -Logistics, time, Quality, Price, Quantity
Quality, Quantity, Price, Time, Place
Which bullet is not true of the world-class stage of SM? React to requisitions Relationships: transactional, collaborative and alliance Bottom line impact: increase shareholder value Reporting: member, executive group Data: facilitates strategic planning
React to requisitions
Which of the following is a major element typically included in a "to buy" cost analysis? Incremental factory overhead costs Incremental managerial costs Incremental purchasing costs Incremental costs of capital Receiving and inspection costs
Receiving and inspection costs
Which is generally not one of the ways that materials catalogs, whether paper based or electronic, can aid a firm? Reduction of supply base Reduction in design time Reduction of non-standard parts Reduction of standard parts Reduction of inventory
Reduction of supply base
Which bullet is not true of the proactive stage of SM? Near defect free materials and services Emphasis: cost, quality and timeliness Reporting: low level Relationships: transactional and collaborative Bottom line impact: profit contributor
Reporting: low level
Which of the following is a simple specification based on the categorization given in the textbook? Samples Commercial Standards Design Specifications Engineering Drawings Material and Method-of-Manufacture
Samples
Which of the following is not an attribute of institutional trust? Recognizes trust has different cultural meanings Both CEO's make a personal investment Senior managers from both firms commit Sharing of information is discouraged Ethical issues are freely brought up without fear
Sharing of information is discouraged
Which bullet is not true of the proactive stage of SM? Involved in development of requirements Short-term contracts Plan for recurring requirements Procurement adds value Active in source selection
Short-term contracts
Which of the following is not a strategic supply management activity? Corporate Strategic Plans Simulation Modeling Strategic Sourcing Strategic Supply Alliances Supply Chain / Supply Networks
Simulation Modeling
Which of the following is a situation wherein an alliance may be appropriate? Price Volatility Synergistic collaborative design opportunities exist Demand Volatility High Switching Likelihood with High Switching Costs No Partnership/Alliance-Capable Supplier for the Item
Synergistic collaborative design opportunities exist
Which of the following is not a strategic issue in making the outsourcing decision? The Issue of Short-term Vulnerabilities Core Competencies Supplier Dominance The Creation of Strategic Vulnerabilities The Dangers of Vertical Integration
The Issue of Short-term Vulnerabilities
Which of the following is not one of the design process phases given in the textbook? The Investigation Phase The Post-Design Phase The Development Phase The Production Phase
The Post-Design Phase
the many internal interfaces of the supply management function begin with: Engineering Material control Correct The customer Operations Production Control
The customer
The Quaker Oats case history demonstrates that in addition to having the trust required to form an alliance: -Both parties must have mutual respect -Volume quantities must be fixed -There is still a need for a comprehensive contract, including such questions and answers as "what if"? -It is not necessary to have open book accounting -Legal provisions are still necessary
There is still a need for a comprehensive contract, including such questions and answers as "what if"?
Which of the following is not an attribute of institutional trust? Trust exists if it is written into a contract Developed over time Internal trust is developed before external trust Based on individual and institutional integrity It is greater than individual trust.
Trust exists if it is written into a contract
The effect of different materials on productivity and cost is often the result of: Using less costly materials Using the latest hi tech materials Using computer run machines Using more costly materials Faster delivery of the materials
Using more costly materials
Which of the following is not one of the tips on writing an effective S.O.W. given in the textbook? Be clear Use active, not passive tenses Utilize legalese to hide negative issues Be precise Spell out the buyer's obligations carefully
Utilize legalese to hide negative issues
In the investigation phase, the development of alternatives encompasses all of the following considerations, except one. Which does not belong to the list? Value analysis Suitability Producibility Component availability Customer acceptability
Value analysis
Which of the following is not associated with the development phase of the design process? Development of prototypes Design reviews Qualification testing Failure analysis Value analysis
Value analysis
Which of the following is not one of the typical questions to ask prior to inviting a supplier into the design process as presented in the book? -Will the supplier be able to provide price concessions -Will the supplier be able to meet our cost, quality, and product performance requirements? -Does the supplier possess the required engineering capability? -Will the supplier be able to meet our development and production needs? -Does it have the necessary physical process and quality capabilities required?
Will the supplier be able to provide price concessions
The term extended enterprise is an extension of supply networks, we now have: true value creation real value maintenance innovative and virtual integration a network of firms collaborating in partnership adaptive networks
a network of firms collaborating in partnership
Cross functional teams have proven to help: break down functional silos reduce new product development time facilitate integrated planning and coordination stimulate engineering change management control all of the above
all of the above
When a firm's major activity is research and development, the firm will most likely use: centralized purchasing headquarter purchasing decentralized purchasing hybrid purchasing structure a specialized purchasing staff at headquarters
decentralized purchasing
In Appendix A, The "Mechanics of Supply Management", the typical purchasing cycle for materials starts with: investigating and selecting the supplier negotiating a contract defining and describing the need preparing the purchase order communicating the need
defining and describing the need
The major reason supply management can greatly improve a firm's return on investment (ROI) is: the reduction of post ownership costs the reduction of downtime costs the reduction of quality costs the reduction of acquisition cost every dollar saved in purchasing is = to a new dollar of profit
every dollar saved in purchasing is = to a new dollar of profit
The key prerequisite to having cross functional teams is: effective team leaders qualified team members a clear team charter adequate training executive sponsorship
executive sponsorship
When we add the term networks to the supply and value chains, we are emphasizing the need to focus on and interactively communicate with: suppliers distributors final consumers tiers of suppliers all support organizations
final consumers
E-commerce has facilitated the use of: centralized purchasing decentralized purchasing hybrid purchasing none of the above A, B & C
hybrid purchasing
The most significant advantage of the supply chain management structure is it facilitated a total systems approach to stimulate integration it uses the internet to extract key information it increases the visibility of the purchasing department it focuses management attention on quality it reveals that inventory costs are often understated
it facilitated a total systems approach to stimulate integration
Aside from reducing potential duplication of efforts, the major advantage of centralized purchasing is: improved inventory control leveraged volume purchasing consolidation transportation savings lower administrative costs
leveraged volume purchasing
Managing supplier relationships, contracts, placement of purchase orders and other transaction focused activities are _____ responsibilities: strategic short term long term operational action
operational
Supply management's impact on the bottom line includes the ability to increase sales by -Reducing the development time of new products by using cross functional teams including suppliers -obtaining the lowest possible prices -finding suppliers with the fastest delivery times -all of the above -none of the above
reducing the development time of new products by using cross functional teams including suppliers
Of the purchasing/supply responsibilities and activities, ______ becomes more important as the function becomes responsible for supply and value network chains: buying supply management executive management strategic planning and research work contract and relationship management Supplier liaison work
strategic planning and research work
the materials management organization structure paved the way for _____ structure: value network chain structures supply chain management structure procurement management structure purchasing centralization purchasing decentralization
supply chain management structure
Which of the following problems is not considered a common problem in developing specifications? Lack of Clarity Ignorance of total cost Limiting Competition Unreasonable Tolerances
t Ignorance of total cost
The term value chain means we include the supply chain in our analysis and management with: end consumer the downstream portion of the chain and distribution, such as marketing channels of distribution financial impact studies opportunity cost
the downstream portion of the chain and distribution, such as marketing