procurement 2 hw
. _____ is a simultaneous engineering approach that occurs between buyer and seller and seeks to maximize the benefits received by taking advantage of the supplier's design capabilities. a. Supplier development b. Early supplier design involvement c. Total cost of ownership d. Supplier relationship management e. Supply base optimization
early supplier design involvement
A/An _____ is a basic component that suppliers must possess before they proceed to the next phase of the evaluation and selection process. a. core competency b. technology roadmap c. Internet website d. entry qualifier e. triple bottom line
entry qualifier
Which of the following is not an example of an internal failure cost? a. Process troubleshooting. b. Equipment calibration. c. Re-inspection following detection of a defect. d. Production downtime caused by defects. e. Scrap and process waste.
equipment calibration
_____ are incurred following production or after the customer takes possession. a. Inspection costs b. Appraisal costs c. Internal failure costs d. Prevention costs e. External failure costs
external failure costs
. To be considered capable, the outputs from a process must fall outside upper and lower specification limits.
false
After the buyer-supplier relationship has been established, buyers no longer need to track supplier performance over time.
false
All delivery activities in a process can be considered wasteful
false
Local suppliers are less responsive to the buying firm's changing needs and cannot economically make frequent smaller deliveries.
false
Supply base optimization usually refers to increasing the number of suppliers used
false
Sustainable carbon footprint reductions should be measured at product suppliers but not at service suppliers.
false
The TQM-focused organization must look at increasing process variation and seeking innovation in both product and process.
false
The strategic sourcing process ends when a contract is signed with a supplier.
false
Today, buyers seldom use the Internet to help locate potential sources that might qualify for further evaluation.
false
When purchasers find that suppliers' capabilities are not high enough to meet current or future expectations, those suppliers should always be eliminated from the supply base.
false
Working with more suppliers allows the supply manager to concentrate on building trusting, collaborative relationships and supplier loyalty while improving quality in purchased goods and services.
false
_____ is defined as the continual monitoring of the strength of suppliers' financial condition to ensure their ability to meet the purchaser's performance requirements for products or services a. Operational risk management b. Sole sourcing c. Financial risk management d. Multiple sourcing e. None of the above.
financial risk management
The RFI constitutes a binding agreement by both the supplier and the purchaser.
flase
Which of the following is not one of the eight key principles of total quality management? a. Strive for zero defects. b. Define quality in terms of customers and their requirements. c. Focus on output rather than process. d. Make quality everyone's responsibility. e. Stress objective rather than subjective analysis.
focus on the output rather than process
An operating characteristics curve shows ___________. a. upper and lower product specifications b. product quality under different manufacturing conditions c. how the probability of accepting a lot varies with the population percent defective d. how operations affect certain characteristics of a product
how the profitability if accepting a lot varies with the population percent defective
_____ results in waste because a valuable equipment or labor resource is not producing output. a. Idle time b. Inventory c. Wasted operator motion d. Delivery e. Overproduction
idle time
Which of the following is not an example of a prevention cost? a. Incoming material inspections. b. Quality planning. c. Equipment calibration. d. Development of a quality manual. e. Maintenance of a quality management system.
incoming material inspections
_____ occur before the product or service is provided to the customer. a. Internal failure costs b. Appraisal costs c. External failure costs d. Prevention costs e. Total costs
internal failure costs
A _____ has a high volume of internal consumption, is readily available, is important to the business, and represents a significant proportion of spend. a. leverage commodity b. portfolio commodity c. critical commodity d. routine commodity e. bottleneck commodity
leverage commodity
All of the following are positive results from early supplier design involvement except _____. a. longer lead-times in order to find and fix product defects before they get to the customer b. better quality and product design c. establishing reasonable tolerances d. suppliers can anticipate and begin preproduction work e. improved product quality and manufacturability
longer lead-times in order to find and fix product defects before they get to the customer
Which of the following is not one of the primary ways that companies create shareholder value? a. Increase volume. b. Reduce cost of employees (downsize). c. Reduce cost of process and waste. d. Reduce cost of goods and services. e. Lower prices.
lower prices
In supplier evaluation, different aspects of _____ include management's commitment to continuous process and quality improvement, its overall professional ability and experience, its ability to maintain positive relationships with its workforce, and its willingness to develop a closer working relationship with the buyer. a. management capability b. process and design capabilities c. financial condition and cost structure d. planning and control systems e. environmental regulation compliance
management capability
_____ focuses on the continued ability of the supplier's human, intellectual, and physical capital to meet the buying firm's requirements with respect to quality and delivery. a. Operational risk management b. Global sourcing c. Logistics risk management d. Total quality management e. Financial risk management
operational risk management
_____ focuses on the continued ability of the supplier's human, intellectual, and physical capital to meet the buying firm's requirements with respect to quality and delivery. a. Operational risk management b. Global sourcing c. Logistics risk management d. Total quality management e. Financial risk management
operational risk management
. Which of the following is not a risk of selecting a supplier in poor financial condition? a. The supplier is unwilling to share its technical expertise with the purchaser. b. The supplier will go out of business. c. The supplier may not have the resources to invest in plant, equipment, or research that is necessary for longer-term technological or other performance improvements. d. The supplier may become too financially dependent on the purchaser. e. Financial weakness is usually an indication of other underlying problems.
The supplier is unwilling to share its technical expertise with the purchaser.
. _____ is the avoidance of nonconformance in products and services by not allowing errors or defects to occur in the first place. a. Detection b. Inspection c. Prevention d. The hidden factory e. Optimization
prevention
. _____ are those costs incurred when production processes are designed or modified to prevent defects from occurring in the first place. a. Appraisal costs b. Internal failure costs c. External failure costs d. Prevention costs e. Six Sigma costs
prevention costs
Although _____ provides optimum leverage and power over the supplier, _____ provides improved assurance of supply. a. multiple sourcing....single sourcing b. single sourcing....multiple sourcing c. sole sourcing....single sourcing d. multiple sourcing....sole sourcing e. There is no difference in the number of suppliers for these benefits.
single sourcing....multiple sourcing
Which of the following is not a commonly accepted source of information regarding potential supply sources? a. Current suppliers. b. Sales representatives. c. Television advertising. d. Organizational knowledge. e. Second-party or indirect information.
television advertising
. Although many sources exist to discover information about a potential supplier, visiting the actual facility provides the most complete way to ensure an accurate assessment of the supplier
true
. It is far less expensive and more efficient in the long run to avoid generating the defect in the first place than it is to inspect for it once it is created.
true
A buyer cannot realistically expect the highest levels of supplier performance when the supplier must respond to frequent or short lead time changes.
true
A supplier's willingness to move beyond a traditional purchasing relationship should be part of the evaluation process for items and services where a longer-term relationship might be beneficial.
true
A well-defined supplier evaluation scoring systems takes criteria that may be highly subjective and develops a quantitative scale for measurement.
true
Although many sources exist to discover information about a potential supplier, visiting the actual facility provides the most complete way to ensure an accurate assessment of the supplier.
true
An in-depth evaluation of all potential supply sources should be conducted for every purchase.
true
As some suppliers view cost data as highly proprietary, buyers will often develop reverse pricing models that provide estimates of the supplier's cost structure during the initial supplier evaluation.
true
Before committing time to evaluate a supplier in depth, suppliers should satisfy certain entry qualifiers.
true
Global sourcing can be used to access new markets or to gain access to the same suppliers that are helping global companies become more competitive.
true
In supplier evaluation, reliability refers to the different individuals or groups reviewing the same items and measurement scales will arrive at the same conclusion.
true
It is difficult to maintain a trusting and collaborative relationship and receive quality goods and services when suppliers do not enjoy working with the buying organization.
true
It is far less expensive and more efficient in the long run to avoid generating the defect in the first place than it is to inspect for it once it is created.
true
Longer-term relationships are sought with suppliers that have exceptional performance or unique technological expertise
true
Many purchasers prefer to focus on suppliers who have the "capability to do the job" regardless of size.
true
Many suppliers are hesitant to challenge excessive specifications for fear of losing the bid.
true
One of the primary causes of nonconforming supplier quality involves inconsistent communication and the resultant misunderstanding of specifications, expectations, and requirements between supply chain members.
true
Professional purchasers should become familiar with financial ratios because they can provide quick and valuable insights into a supplier's financial health.
true
Purchasers should set minimum acceptable performance requirements for a supplier to meet before they become part of the supply base.
true
The lowest purchase price of an item may be important in the short run for supply management but may cause increased costs somewhere else in the production system over the long run: excessive scrap and rework, defective products, greater warranty claims, and so on.
true
The objective of supplier certification is to ensure that nonconforming items are not created or do not leave a supplier's facility.
true
The popularity of JIT and quick replenishment systems favor using fewer local suppliers
true
Total cost of ownership typically includes costs associated with late delivery, poor quality, or other forms of supplier nonperformance.
true
Within its supply chains, supply management does not merely buy parts or services from suppliers - it buys (and sometimes must help manage and improve) current and anticipated supplier capabilities that will result in quality products and services
true
Within its supply chains, supply management does not merely buy parts or services from suppliers - it buys (and sometimes must help manage and improve) current and anticipated supplier capabilities that will result in quality products and services.
true
A category strategy is a decision process used to identify which suppliers should provide a group of products or services, the form of the contract, the performance measures used to measure supplier performance, and the appropriate level of price, quality, and delivery arrangements that should be negotiated.
true
. A Type I error occurs when A) a good lot is rejected B) a bad lot is accepted C) the number of defectives is very large D) the population is worse than the AQL E) none of the above
a good lot is rejected
Given the following make-buy information, what would be the break-even point? Make Option Buy Option Fixed Costs $5500 $1500 Variable Costs $ 4 $ 9 a. 1200 units b. 1708 units c. 800 units d. 460 units
800
The _____ is a solicitation document that is used by organizations to obtain general information about services, products, or suppliers and is used generally before a specific requisition of an item is issued. a. e-RA b. PO c. RFP d. RFI e. RFQ
RFI
A/An _____ is a formal request for the suppliers to prepare bids, based on the terms and conditions set by the buyer. a. RFQ b. purchase order c. RFI d. supplier analysis e. e-RA
RFQ
The goal of _____ is to be able to understand, identify, and exploit cost savings opportunities that may have been overlooked by business unit managers or even by suppliers in bringing the products and services to the appropriate location. a. Marketing research b. Make-buy analysis c. Value chain analysis d. Price analysis e. Cost analysis
value chain analysis
Which of the following is not one of the goals for sourcing a routine commodity? a. Reduce the number of items through substitution. b. Elimination of small volume spend. c. Conduct of a detailed negotiation to improve supplier capability. d. Elimination of duplicate SKUs. e. Simplification of the procurement process using electronic tools.
Conduct of a detailed negotiation to improve supplier capability.
Which of the following is not true in regards to low-cost country sourcing? a. Low-cost country sourcing can be used to access new markets or to gain access to the same suppliers that are helping global companies become more competitive. b. Although there has been a strong push to source from emerging BRIC countries in search of lower costs, there has also been a strong push toward sourcing in these countries because of local content requirements established by governments in these areas. c. Global sourcing is an opportunity to gain exposure to product and process technology, increase the number of available sources, satisfy countertrade requirements, and establish a presence in foreign markets. d. Some buyers source globally to introduce competition to domestic suppliers. e. Firms are highly experienced with global business processes and practices, and there are many personnel qualified to develop and negotiate with global suppliers or manage material pipelines.
Firms are highly experienced with global business processes and practices, and there are many personnel qualified to develop and negotiate with global suppliers or manage material pipelines.
Which of the following is not one of the questions to be addressed when conducting a spend analysis? a. What did the business spend its money on over the past year? b. Did the business receive the right amount of products and services given what it paid for them? c. What suppliers received the majority of the business, and did they charge an accurate price across all the divisions in comparison to the requirements in the POs, contracts, nad statements of work? d. What was the on-time delivery performance for each supplier? e. Which divisions of the business spent their money on products and services that were correctly budgeted for?
What was the on-time delivery performance for each supplier?
A Type II error occurs when A) a good lot is rejected B) a bad lot is accepted C) the population is worse than the LTPD D) the proportion of defectives is very small E) none of the above
a bad lot is accepted
Which of the following information is not generally maintained in a supplier informational database?
advertising campaign information
. In supplier analysis, _____ requires identifying critical performance criteria and identifying relative competitive performance. a. benchmarking b. make/buy analysis c. insourcing/outsourcing analysis d. Porter's Five Forces analysis e. cost analysis
benchmarking
A _____ has unique requirements or niche suppliers, yet is significant to the business. a. critical commodity b. bottleneck commodity c. matrix commodity d. routine commodity e. leverage commodity
bottleneck commodity
. A _____ specifies how a group tasked with developing the strategy for the specific category being purchased will achieve goals that in turn will support higher level strategies. a. functional strategy b. corporate strategy c. business unit strategy d. category strategy e. None of the above.
category
A _____ refers to a specific family of products or services that is used in delivering value to the end customer. a. spend analysis b. decentralized structure c. category d. centralized structure e. hybrid structure
category
_____ involves the identification of the steps, activities, time, and costs involved within a process. a. Data warehousing b. Co-location c. Process mapping d. Supply base optimization e. TQM
process mapping
Which of the following is not one of the seven wastes? a. Overproduction. b. Delivery. c. Waste in the work itself. d. Inventory. e. Product advertising and promotion.
product and advertising and promotion
Producer's risk is the probability of___________. a. accepting a good lot b. rejecting a good lot c. rejecting a bad lot d. accepting a bad lot
rejecting a good lot
_____ is the process of identifying potential negative events, assessing the likelihood of their occurrence, heading off these events before they occur or reducing the probability that they will occur, and making contingency plans to mitigate the consequences if they do occur. a. Supplier selection b. Supplier evaluation c. Supplier categorization d. Global sourcing e. Risk management
risk managment
Although _____ provides optimum leverage and power over the supplier, _____ provides improved assurance of supply. a. multiple sourcing....single sourcing b. single sourcing....multiple sourcing c. sole sourcing....single sourcing d. multiple sourcing....sole sourcing
single sourcing.....multiple sourcing
A _____ is an annual review of a firm's entire set of purchases. a. cost analysis b. price analysis c. make-buy analysis d. technology roadmap e. spend analysis
spend analysis
A/An _____ may be used as a decision support tool in which the sourcing team assigns a weight to the different categories and develops a numerical score for each supplier in each category, thereby developing a final performance score. a. make-buy analysis b. portfolio analysis matrix c. reverse auction d. e-catalog e. supplier selection scorecard
supplier selection scorecard
_____ is the process of identifying cost considerations beyond unit price, transport, and tooling. a. Total cost of ownership b. Price analysis c. Make-buy analysis d. Portfolio analysis e. Low-cost country sourcing
total cost of ownership
. A major source of information on potential supply sources comes from current or existing suppliers.
true
. A process that is stable and in control (i.e., no special and correctable causes of variation) can be expected to produce virtually all of its output within its natural tolerance limits.
true
All of the following are goals for a strategic category except _____. a. develop a competitive advantage b. support and leverage the supplier's core competencies c. develop best-in-class suppliers d. support the company's overall strategy e. simplification of the procurement process using electronic tools
simplification of the procurement process using electronic tools
Competitive bidding is most effective when all of the following conditions apply except when _____. a. the buying firm can provide qualified suppliers with clear descriptions of the items or services to be purchased b. volume is high enough to justify the cost and effort c. the firm does not have a preferred supplier d. the item is new or technically complex, with only vague specifications e. None of the above conditions apply to competitive bidding.
the item is new or technically complex, with only vague specifications
All of the following are factors that influence how much attention supply management should commit to managing supplier quality except _____. a. the physical distance between the supplier and buyer facilities b. the ability of a supplier to affect a buyer's total quality c. the internal resources available to support supplier quality management and improvement d. the ability of a buying firm to practice world-class quality e. a buyer's ability to collect and analyze quality-related data
the physical distance between the supplier and buyer facilities
