Management 460 Chapters 1 and 2

Which of the following is not an appropriate performance criterion to be used when evaluating suppliers?

Commitment to effective marketing and promotion.

A/An ____ has demonstrated its performance capabilities through previous purchase contracts and receives preference during the supplier selection process.

preferred supplier

According to the Institute for Supply Management, ____ is the identification, acquisition, access, positioning, and management of resources and related capabilities an organization needs or potentially needs in the attainment of its strategic objectives.

supply management

All of the following are conditions under which competitive bidding is effective except ____.

the buyer has a preferred supplier for the item

Instead of adversarial relationships which characterize ____, ____ features a long-term win-win relationship between a buying company and specially selected suppliers.

traditional purchasing....supply management

Once a purchaser and a supplier reach agreement on a longer-term purchase contract, material releasing responsibility should shift to ____.

user groups

According to Michael Porter, a firm's ____ is composed of primary and secondary support activities that can lead to competitive advantage when configured properly.

value chain

____ involves a process of unbundling the price paid and other components of price over the life cycle of a product or service, to deliver a target cost and a unit rate to determine if it is priced competitively in the marketplace.

Cost management

Which of the following is not one of the conditions under which negotiation is effective?

When the specifications or requirements are clear to the seller.

Research indicates that all of the following are top knowledge areas for purchasers in 2010 except ____.

consumer behavior

In a ____, the supplier is reimbursed all of their actual costs plus some agreed on operational margin and overhead amount.

cost-based contract

Effective supply market intelligence involves all of the following except ____.

ensuring that purchasing does not exceed its annual budget

The ____ states that success is a function of effectively managing a linked group of firms past first-level suppliers or customers.

extended enterprise concept

In a ____, the price stated in the agreement does not change, regardless of fluctuations in general overall economic conditions, industry competition, levels of supply, market prices, or other environmental changes.

fixed-price contract

All of the following are required elements in a purchase requisition except ____.

identification and approval of a supplier by the end user

All of the following are roadblocks between measurement and improved performance except ____.

information technology

Within the downstream portion of a supply chain, ____ are responsible for the actual movement of materials between locations.

logistics managers

While similar in concept, blanket purchase orders are typically used more often for ____ purchases, while longer-term purchase agreements are used for ____ purchases.

lower-value....higher-value

The ____, which the supplier provides, details the contents of a shipment.

material packing slip

____ is used when a product or service is proprietary or when there is a perceived advantage to using a particular supplier's products or services.

Description by brand

____ is appropriate where the requirements are well understood and there is common agreement between supply chain partners about what certain terms mean.

Description by market grade

____ focuses attention on the outcomes the customer wants, not on the precise configuration of the product or service.

Description by performance characteristics

____ can cover such characteristics as the materials used, the manufacturing or service steps required, and even the physical dimensions of the product.

Description by specification

____ involves generating the materials release, contacting a supplier directly concerning changes, and monitoring the status of inbound shipments.

Material control

____ is a situation that occurs when sellers contact and attempt to sell directly to end users (purchasing's internal customers).

Maverick buying and selling

____ seeks to improve forecast accuracy, optimize production scheduling, reduce working capital costs, shorten cycle times, cut transportation costs, and improve customer service; while ____ helps obtain materials and manage physical flows from suppliers through downstream distribution to ensure that customers receive the right products at the right location, time, and cost.

Planning software....execution software

____ include(s) the materials required to pack and ship final products, such as pallets, boxes, master shipping containers, tape, bags, wrapping, inserts, and other packaging material.

Production support items

. ____ is a functional group (i.e., a formal entity on the organizational chart as well as a functional activity (i.e., buying goods and services).

Purchasing

Which of the following is not one of the characteristics of a mature, well-developed supply strategy?

Required use of an online catalog.

____ is the end-to-end process of managing a supplier through the entire sourcing life cycle.

SRM

____ is the process of collecting historical data by commodity, relative to demand from lines of business, with the exception of personnel expenses, occupancy, and corporate spend.

Spend analysis

Which of the following is not one of the four enablers of purchasing and supply chain management?

Sufficient cash flow and large on-hand cash deposits.

Which of the following is not one of the factors driving an emphasis on supply chain management?

An increasing emphasis on domestic sourcing due to the longer lead times and higher levels of pipeline inventories associated with global sourcing.

____ is the process of developing external industry intelligence and analysis, internal demand, supply base capabilities and operational risks, and a strategy to approach that marketplace with the organization's needs to match it with what suppliers can offer.

Category management

Which of the following is not one of the generally accepted ways that internal customers should communicate their needs to purchasing?

Chance meeting in the company cafeteria.

____ is the process of using rate and unit consumption levels to forecast and estimate future consumption in an internal functional customer and providing guidance and input on how to optimize usage and educating the user on the tradeoffs.

Demand management

____ identifies all claims on output; while ____ is the process of taking demand data and developing a supply, production, and logistics network capable of satisfying demand requirements.

Demand planning....supply planning

____ are those items provided by suppliers and used directly during production or service delivery.

Direct materials

Suppliers are more often being paid through a/an ____, which is the automatic transfer of payment from the buyer's bank account to the supplier's bank account.

EFT

Which of the following is not one of the objectives in developing supply base management.

Ensuring timely and accurate payment of supplier invoices.

Which of the following is not an example of a typical resource shared between a buyer and supplier?

Exchange of managers.

Which of the following is not one of the features of the new model of progressive purchasing?

Focusing primarily on price analysis and short term contracts.

Which of the following is not a feature that separates capital equipment purchases from other purchases?

For accounting purposes, most capital equipment is not depreciable over the life of the item.

The ____ is a change index, and generally a rating over 50 indicates that the economy is expanding.

ISM Report on Business

Which of the following is not an advantage of online ordering systems?

Longer order cycle time from input to delivery.

____ include anything that does not go directly into an organization's product.

MRO items

All of the following are benefits of electronically generating and transmitting purchasing-related documents except ____.

a reduction in the need to ensure higher levels of quality from suppliers

All of the following are examples of demand planning activities except ____.

accounts payable

. In a practice known as ____, internal users may try to negotiate contracts themselves.

backdoor buying

The ____ helps protect the carrier against wrongful allegations that the carrier somehow damaged, lost, or otherwise tampered with a shipment.

bill of lading

Transportation carriers use a/an ____ to record the quantity of goods delivered to a facility.

bill of lading

A/An ____ is an open order, usually effective for one year, covering repeated purchases of an item or family of items.

blanket purchase order

When using negotiating a ____, it is necessary to include a/an ____ that allows a buyer to terminate the contract in the event of persistently poor quality, delivery problems, and the like.

blanket purchase order....escape clause

All of the following are typical processes involved in supply chain management except ____.

cash flow management

All of the following are objectives of a world-class purchasing organization except ____.

ensure that all hard copies of purchase orders and other paper documents are filed correctly in a secure area

The purchasing cycle begins with the ____.

identification of a need or requirement

A key characteristic of a/an ____ is a lack of processing by the supplier into a newly formed product.

raw material

The ____ purchase category includes such items are petroleum, coal, lumber, and metals such as copper and zinc.

raw materials

A ____ details any shipping or receiving discrepancies noted by the receiving department.

receiving discrepancy report

In a ____, when inventory is depleted to a given level, the system notifies the material control department or the buyer to issue a request to a supplier for inventory replenishment.

reorder point system

The ____ function involves physically getting a product ready for distribution to the customer.

shipping

____ helps ensure that customers receive material when and where they require it.

Order processing

____ refers to the process of assessing and selecting the structure and formal system of communication, division of labor, coordination, control, authority, and responsibility required to achieve organizational goals and objectives, including supply chain objectives.

Organizational design

Which of the following is an example of a purchased direct item for a manufacturing firm?

Parts and components.

Which of the following is false regarding concealed damage?

The bill of lading protects the carrier against charges of concealed damage.

Good reasons for allowing other departments to view purchase orders and incoming receipts does not include which of the following?

There is never a good reason for purchasing to allow other departments access to purchase orders and incoming receipts due to the confidential nature of the price and delivery terms.

The ____ is used to identify user requirements, evaluate the user needs effectively and efficiently, identify suppliers who can meet that need, develop agreements with those suppliers, develop the ordering mechanism, ensure payment occurs promptly, ascertain that the need was effectively met, and drive continuous improvement.

purchasing process

In the ____ approach, purchasing must work with the end user to quickly identify a supplier to provide products on short notice at the lowest possible cost with an acceptable level of quality and delivery time.

spot buy

When marketing wants to purchase an advertising media campaign, the ____ should specify the work that is to be completed, when it is needed, and what type of service provider is required,

statement of work

A ____ involves the physical checking of inventory to verify that system records match actual on-hand inventory levels.

stock check

All the following are expected growth areas in e-commerce except ____.

submitting written check requests to accounts payable

One of the most important objectives of the purchasing function involves the selection, development, and maintenance of supply and is sometimes described as ____.

supply base management

A ____ is a set of three or more organizations linked directly by one or more of the upstream or downstream flows of products, services, finances, and information from a source to a customer.

supply chain