EBTM 419 Midterm

Monthly Inventory Turnover Ratio

= cost of goods sold for the month / beginning inventory + ending inventory / 2

Cost at Break Even Point

= fixed costs + (variable costs * BEP Quantity)

A "fair trade product" refers to manufactured products like clothing or electronics.

False

A SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization.

False

An effective supplier certification program will increase time spent on incoming inspections.

False

As companies outsource more and more parts, it becomes easier to achieve cost savings internally.

False

Ethical sourcing policies should NOT include determining where all purchased goods come from and how they are made.

False

Green purchasing is a practice of purchasing products that contain a special green dye.

False

Green purchasing refers to suppliers planting trees for a designated dollar amount in a negotiated contract.

False

If the break-even point in a typical make-buy scenario is 24,000 units and 8,000 units are required by the firm, then the firm should choose to make the units.

False

In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to total more than 1.00 and less than 100.

False

Interpersonal relationships are not necessarily relevant to supplier relationships.

False

It is considered unethical for a firm to intentionally buy from women-owned businesses.

False

One result of an effective supplier certification program is an increase in the supplier base.

False

Sustainable sourcing is a process of purchasing goods and services that takes into account the short-term impact on people, profits, and the planet.

False

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.

False

The total cost of ownership concept does NOT include quantitative factors.

False

When evaluating a supplier, it is not possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to defects.

False

Why is high ROA good?

It shows lower spending

A seven-step approach to supplier development might include identifying critical suppliers not meeting performance requirements

True

Benchmarking is the practice of copying what other businesses do best.

True

Building trust, shared vision and objectives, personal relationships, mutual benefits and needs are key factors that contribute to a lasting supplier partnership.

True

Companies outsource to help them reach their sustainability goals.

True

Creating strategic supplier alliances benefits firms by increasing the performance and value of suppliers as well as increasing brand awareness.

True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

True

Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management.

True

Environmental supplier certifications can be used to identify rogue suppliers before they can cause problems.

True

Generally, firms outsource noncore activities while focusing on core competencies.

True

ISO 14000 is a family of international standards for environmental management.

True

If a company is effectively focusing on its core competencies, its level of outsourcing is likely to increase.

True

Key activities of supply management include negotiations, logistics, contract development and administration, inventory control and management, and supplier management.

True

Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for suppliers to follow.

True

Reasons for buying items instead of making them can include cost advantage, insufficient capacity, lack of expertise, and quality.

True

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.

True

The benefits of investing in an environmental management system (EMS), based on ISO14000 standards, include savings in energy consumption and materials and an improved corporate image.

True

The development of relationships with suppliers brings about changes that must be managed in order for a company to stay focused on their core businesses.

True

The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers.

True

The purchase order is NOT a legally binding contract until it is accepted by the supplier.

True

The term Supply Management is used to describe responsibilities above and beyond those of traditional purchasing.

True

Return on Assets

= Net income / Total assets

Inventory Turnover Ratio

= cost of goods sold / average inventory

Break Even Point

total cost to make = total cost to buy