Topic 13: Managing Purchasing Performance

a. 3.33

Suppose that the design engineering team set the specifications for length of a stamped sheet-metal part at 10 inches (T) with acceptable tolerances of ±.05 inches (USL and LSL). The average length of the products produced by the actual stamping process is 9.995 inches (m) with a standard deviation of .005 inches (). What is your Cp? a. 3.33 b. 1.11 c. .888 d. 9.99 e. 10.00

e. 3.00

Suppose that the design engineering team set the specifications for length of a stamped sheet-metal part at 10 inches (T) with acceptable tolerances of ±.05 inches (USL and LSL). The average length of the products produced by the actual stamping process is 9.995 inches (m) with a standard deviation of .005 inches (). What is your Cpk? a. 3.33 b. 1.11 c. .888 d. 9.99 e. 3.00

True

T or F. Although we implicitly understand the link between measurement and behavior, we often forget to explicitly link measures to desired outcomes.

False

T or F. As a rule, supplier certification programs require very little time, effort, or resource dedication.

True

T or F. By certifying your suppliers, you shift the responsibility for assuring quality back to the source—the supplier.

True

T or F. By making processes visible, process capability analysis and cause-and-effect analysis help you identify and remove the sources of process variation.

False

T or F. One major challenge in the design of supplier scorecards is that managers keep them too simple. Most effective scorecards are really quite complex and detailed. Good scorecards typically consist of 20 categories/criteria or more.

False

T or F. Quality is an important supplier-selection criterion that is found on about 25% of all supplier-selection/evaluation scorecards.

True

T or F. Supplier scorecards are like a report card; that is, your selected criteria and scales tell suppliers what you will be grading them on.

True

T or F. The best place for you to start certifying suppliers is in the "leverage" or "critical" quadrants of the purchasing portfolio matrix.

False

T or F. The process for designing/developing a supplier scorecard must be different and distinct from the process you use to develop buyer appraisal criteria.

True

T or F. What gets measured gets done.

True

T or F. Your goal in developing a buyer measurement system is to develop a holistic buyer measurement system that promotes appropriate behavior and high levels of performance.

e. All of the above

Which of the following are buyer benefits from supplier certification? a. Higher-quality parts b. Better buyer/supplier relationships c. Lower transaction costs d. Simplified receiving e. All of the above f. A and D only

f. B, C, & D only

If you discover that a supplier's process is not capable of consistently producing within your required design specifications, which of the following actions should you consider taking? a. Buy your own computer numerically controlled (CNC) machines. b. Evaluate the specifications to make sure they are not tighter than they really need to be. c. Work to improve the process to reduce variability. d. Find a new supplier that operates better, more consistent processes. e. All of the above f. B, C, & D only

a. Verify that the supplier's production process is capable of consistently producing product within the design specifications your engineers have set.

Process capability analysis is used to . . .? a. Verify that the supplier's production process is capable of consistently producing product within the design specifications your engineers have set. b. Plot the frequency that various defects are found. c. A brainstorming tool used to evaluate quality and find the source of defects. d. Measure quality as the product is actually produced

b. The difference between what you pay and the budgeted price.

Which of the following best describes purchase-price variance? a. The difference between what you pay and what you wanted to pay. b. The difference between what you pay and the budgeted price. c. The difference between what you paid last year. d. The difference between what you pay and what your rivals pay. e. None of the above.

c. Promotes a single-minded focus on financial profitability.

Which of the following is NOT a benefit of using a balanced scorecard? a. Communicate top-management's vision b. Links behavior to strategy. c. Promotes a single-minded focus on financial profitability. d. Promotes future capability development. e. Improves discipline.

b. They are very hard to use.

Which of the following is NOT a key role of a supplier scorecard? a. They communicate expectations. b. They are very hard to use. c. They let suppliers know how well they are performing and where they stand. d. They are a source of benchmarking data. e. None of the above; that is, they are all key roles.

d. Autocratically choose the most important criteria.

Which of the following is NOT a step in the process for developing a buyer appraisal system? a. Decide who should provide input. b. Generate preliminary list of appraisal criteria. c. Provide feedback and promote discussion. d. Autocratically choose the most important criteria. e. None of the above; that is, they are all steps in the process.

e. None of the above; that is, they are all steps in the process.

Which of the following is NOT a step in the process for developing a buyer appraisal system? a. Distinguish objective from subjective criteria. b. Establish weights via "Penny Experiment." c. Define measurement scale for each criterion. d. Assess group influence to adjust weights. e. None of the above; that is, they are all steps in the process.

c. You are a supplier and want to demonstrate that your processes actually produce products of outstanding quality (i.e., PPM defects).

Which of the following is NOT an appropriate scenario for promoting/pursuing ISO 9000 certification? a. You are a small supplier and have many customers that encourage competing certifications. b. You are a small customer and lack the resources to build a strong in-house certification program. c. You are a supplier and want to demonstrate that your processes actually produce products of outstanding quality (i.e., PPM defects). d. You are a small customer and lack the clout to require your suppliers become certified. e. None of the above; that is, they are all appropriate scenarios

e. All of the above

Which of the following is a key dimension of the balanced scorecard? a. Customer expectations b. Operational excellence c. Future capability development d. Financial Performance e. All of the above f. A and D only

f. A and C only

Which of the following is a reason or rationale for the development of the balanced scorecard concept? a. Existing measures were too short-term focused. b. Managers wanted to maintain the status quo. c. Existing measures were too financially oriented d. Existing measures focused too much on value creation and customer satisfaction. e. All of the above f. A and C only

e. All of the above

Which of the following is an appropriate way to use supplier scorecards?? a. Inform business reviews. b. Help suppliers benchmark best-in-class performance. c. Support a supplier recognition program. d. Post to the Internet to provide suppliers up-to-date, real-time performance information. e. All of the above

g. Both B & E

Which of the following is not one of the steps in W. Edward Deming's PDCA cycle? a. Plan b. Procrastinate c. Do d. Check e. Calculate f. Act g. Both B & E

f. All of the above

Which of the following is something you should expect a great buyer to do? a. Build productive relationships with internal customers. b. Understand supply and demand for the items/categories they buy. c. Scan actively; that is, track risks and emerging technologies. d. Design processes for making standard buys (e.g., p-cards and web catalogues). e. Help suppliers continuously improve their own processes. f. All of the above g. A, B, and D only

e. A and C only

Which of the following is true of dock-to-stock suppliers? a. You no longer perform incoming inspections. b. You don't trust them. c. Incoming shipments go straight to inventory or to the production floor. d. Dock to stock is a permanent designation that means you never have to worry again. e. A and C only f. B and D only

g. At the right price

Which of the seven rights of purchasing is most frequently measured? a. Obtains the right material b. In the right quantity c. At the right time d. For delivery to the right place e. From the right supplier f. With the right service g. At the right price

e. All of the above

Who should participate in developing your firm's buyer appraisal system? a. Purchasing leadership b. Internal customers c. Suppliers (i.e., account managers) d. Buyers e. All of the above f. A, B, and D only