MKG 360 Exam 1 Ch 2

. Which of the following would be a good reason to outsource (buy) versus making?

A firm lacks the technology or expertise to produce an item

The primary goals of purchasing include...

1. ensure uninterrupted flows of raw materials at the lowest cost possible. 2. improve quality of finished goods produced 3. maximize customer satisfaction

Inventory Turnover can be calculated by:

Cost of Goods Sold / Average inventory costs

Benefits derived from implementing e-procurement systems include all of the following EXCEPT:

Creates numerous additional job opportunities in the purchasing department

Which of the following statements is FALSE?

Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through:

Early supplier development

While most public procurement is focused on goals similar to those of purchasing departments in the private sector, U.S. federal government purchases must comply with the:

Federal Acquisition regulation

Which of the following is NOT a form of countertrade?

Incoterming

The Uniform Commercial Code governs the purchase and sale of goods in the US except in the state of:

Louisiana

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as:

Planned Order Release

Which of the following documents is considered the buyer's offer to purchase products or services from a supplier, is legally binding once the supplier accepts it, and usually has the terms and conditions of purchase preprinted on the back of the document?

Purchase Order

Which of the following is NOT a potential challenge for global sourcing?:

Relaxed trade barriers

When a material is not available in the warehouse and there is no current supplier for the item, the buyer must identify a pool of suppliers and issue a:

Request for Quotation

Which of the following illustrates Forward Vertical Integration?

Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

Which of the following is a reason that single sourcing is considered risky/bad?

The limited (finite) capacity of one supplier

Which of the following is a reason small value purchases are handled differently?

To control unnecessary administrative costs

Which type of requisition is used for materials and standard parts that are requested on a recurring basis?

Traveling requisition

When calculating Return on Investment, current assets include:

cash, accounts receivable, inventory

The measurement of the impact of change in purchase spend on a firm profit before taxes, assuming gross sales and other expenses remain unchanged, is referred to as:

profit-leverage effect

Total cost of ownership does not consider which of the following factors?

purchase order costs

Which of the following is an advantage of a centralized purchasing department?:

quantity discounts

Which of the following is a reason for favoring single sourcing?

reduces variabilities in quality levels

On occasion, firms assist suppliers, new or old, to improve their processing capabilities, product or service quality, delivery effectiveness, and cost performance by providing the required technical and financial assistance. This is referred to as:

supplier development