SCM 371 Exam 3

Jidoka is a Japanese term for continuous improvement.

False

Most organizations have maintenance, repair and operations requirements.

True

Public purchasers are required to award contracts to the lowest "responsible" and "responsive" bidder. This means the bidder is:

fully capable and willing to perform the work and submits a bid that conforms to the invitation for bid.

Lean is a management philosophy that focuses on:

maximizing customer value while eliminating waste.

This bond guarantees work will be done according to specifications, in the time specified, and if another supplier does rework or completes the order, purchasing is indemnified for these extra costs.

performance bond.

Traditional criteria for supply management are:

quality, quantity, delivery, price and service.

Capital assets: (select all answers which apply)

- are not bought and sold in the regular course of business. - may be tangible or intangible.

Some estimates place the total costs of quality to be:

30-40 percent of the final product cost.

Governments typically play no role in establishing prices or regulating how buyers and sellers are allowed to behave in agreeing on prices.

False

In portfolio analysis, bottleneck items are characterized by high risk and high value.

False

Indirect costs can be specifically and accurately assigned to a given unit of production or a specific identifiable task performed by a service provider.

False

A payment bond protects the buyer against liens that might be granted to suppliers of material and labor to the bidder, in the event the bidder does not make proper payment to its suppliers.

True

Capital items are not bought in the regular course of business.

True

The six sigma (6σ) approach to quality uses the five step methodology of: define, measure, analyze, improve, and control (DMAIC).

True

A non-repetitive purchase, such as a $5 million piece of equipment, should be purchased by:

a project team representing supply, finance, and operations.

Identical pricing for bids can be discouraged through:

allowing bids on parts of large contracts if bidders feel the total contract is too large and using firm bidding without revision.

Simplification is:

an attempt to concentrate production on the most important product sizes.

Supply may contribute to the containment of the costs of poor quality by addressing:

appraisal costs, internal costs, external costs and prevention costs.

Capital assets:

are not bought and sold in the regular course of business.

Activity based costing attempts to correct the distortions built into product costing:

by tracking cost drivers of indirect costs and turning indirect costs into direct.

Deming's 14 points stress the importance of:

ceasing dependence on inspection.

If the buyer wants to motivate the seller to manage total costs, the best type of contract is:

cost-plus-incentive-fee (CPIF).

The inability to store services:

creates quality assurance difficulties.

Lean quality management philosophy is based on:

maximizing customer value and minimizing waste.

When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

decide if negotiation makes sense, establish negotiation points and avoid setting unrealistic expectations.

ISO 9001: 2015:

defines the requirements a quality system must meet but does not dictate how they should be met.

The characteristic of a service that has the greatest impact on the ability to define, measure and control service quality is:

degree of tangibility.

When a supplier offers a lower price for a larger quantity, the buyer should:

determine the return on investment.

Identical prices received from various sources should:

draw attention if the specification is complex or detailed.

Quality improvement programs for goods are initiated by a desire to:

eliminate incoming inspection.

A requirement typically is considered strategic if it:

enhances revenue, reduces risk and provides access to new technology.

Early supply and supplier involvement:

helps assure that what is specified is procurable and represents best value.

Total cost of ownership (TCO) can be used to:

highlight cost reduction opportunities, compare suppliers in a supplier selection decision, prepare for a negotiation and assess the reasonableness of a supplier's prices.

The market approach to pricing:

implies that prices are set based on what the market will bear.

The zone of negotiation:

indicates the feasibility of negotiation and the likelihood of an agreement.

Costs incurred in the operation of a production plant or process, but normally cannot be related directly to any given unit of production or service provided, are called:

indirect costs.

When a specification is formulated by the buying organization, often on the basis of standards set by governmental or technical societies, it is called a(n):

individual standard.

Forward buying:

involves purchasing for known or estimated future requirements.

A fair price:

is the lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit.

In portfolio analysis, the goal when purchasing leverage items is to:

minimize acquisition time and cost, and price per unit.

In portfolio analysis, the goal when purchasing noncritical or routine spend is to:

minimize acquisition time and cost.

Quality control in services is:

more difficult for customized services delivered by highly skilled workers.

When using performance or function specification as a method of description:

most of the risk is borne by the supplier.

About 70 percent of the opportunity for value improvement lies in:

need identification and specification.

The Sherman Antitrust Act states that suppliers:

not talk with competitors about price.

Supply chain risk can be classified as:

operational, financial and reputational.

Supply chain risks may be:

operational, financial and reputational.

In portfolio analysis, the goal when purchasing bottleneck items is to:

reduce or eliminate customization.

A sampling technique that is based on the cumulative effect of information that every additional item in the sample adds as it is inspected is called:

sequential sampling.

Items for which prices may be fixed or variable, by the job or by the hour, day, or week are called:

services

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s):

standard specification or commodity-type items.

The match between a commercially available material, good or service and the intended function is known as:

suitability.

Which tool will focus everyone in the organization on cost management:

target costing.

Portfolio analysis is:

the categorization of spend map based on the risks to acquire in the marketplace and value.

The learning curve is based on:

the common principle that one becomes more proficient with experience.

The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called:

total cost of ownership.

Most direct costs are:

variable costs.

An example of an external failure cost is:

warranty costs.