Procurement Final Exam
For which procurement actions is alignment important?
All of the above
In which procurement process can technology for procurement be applied?
All of the above
In which procurement process is risk management a consideration
All of the above
In which procurement process is risk management a consideration?
All of the above
Sustainability is good for business because of
All of the above
What can happen if procurement processes break down?
All of the above
When evaluating total cost ownership (TCO), hidden costs ownership can include
All of the above
When should cost management be implemented?
All of the above
What can happen if procurement processes break down?
All of the above (factory shut down, extra parts, empty shelves)
Characteristics of well defined balanced scorecards include
All of the above (focused on agenda of org/department/process concern, mix of financial and non-financial, selection of small number of data items to monitor)
In which supplier segments can sustainability be relevant.
All of the above (partner, leverage, routine, bottleneck)
In which sourcing strategies can sustainability be relevant?
All of the above (relationship restructuring, global sourcing, cost analysis, product design)
Need to consider risk when
All of the above (selecting a sourcing strategy, discussing relationship with key suppliers, evaluating supplier performance)
Which of these examples are factors when developing specifications for Procurement?
All of the above (tech standards, quality levels, price & cost levels)
In Kraljic's Matrix, items that have high supply risk and low strategic importance are?
Bottleneck items
When procurement says "we would like to go over supply chain risks with you" it is approaching this supplier as a (hint:financial risk/supply risk)
Bottleneck suppliers
Which of the segments would a supplier of the following item fall under? Milk & Eggs (high supply risk/low financial impact)
Bottleneck suppliers
The following characteristics are advantages to which of the following Operating Models- limited overhead costs, ability to share best practices and learn from each other, small central team with local buyers
Center-led structure
The following characteristics are advantages to which of the following Operating Models- standardized requirements, economies of scale, few suppliers, effective supply strategy.
Centralized structure
The following characteristics are advantages to which of the following Operating Models- local control and autonomy, embedded in the business, flat organizational structure.
Decentralized structure
What is not a source of supply chain risk?
Employment risk
Which is not a source of supply chain risk
Employment risk
Customers are created equal.
False
It is more efficient to communicate with suppliers over the phone instead of using a database or dashboard.
False
Procurement cost management is all about cost savings and cost reductions.
False
Procurement leads the business functions and will determine when/where/how company cash flow is spent.
False
Procurement teams will generally spend an equal amount of time with ALL of their suppliers.
False
Risk Noncompliance is the process of replacing orders with suppliers that have not been contracted and results in the loss of financial benefit negotiated with contracted suppliers.
False
Sustainability is a unique agenda item specific to only a handful of supply chains and industries.
False
Sustainability practices decrease revenue and profitability.
False
Technology is easy, fast, and inexpensive to implement in procurement.
False
The organizational model for procurement is primarily driven by procurement optimization.
False
There are no disadvantages to implementing robotics and block chain in procurement.
False
There is a "one-size" fits all Operating Model to Procurement.
False
There is a one-size fits all sourcing strategy.
False
Value leak is defined by the use of suppliers that have service, ethical, or business issues that could provide risk to the items they supply an organization.
False
All customers are created equal!
False statement
What are potential benefits of supplier enabled innovation for the buying company?
Greater knowledge and expertise
For which of the following procurement improvement areas does business alignment matter most?
Growing supplier diversity
Select the proper order of the four steps of proactive risk management.
Identifying risks, planning risks, monitoring risks, mitigating risks
Technology can assist in all of the following areas except:
Improving workplace morale
In Kraljic's Matrix, which one of the suppliers is NOT one of the segments?
Invoice suppliers
Procurement should stay involved in contract implementation because:
It helps see negotiated results through
A sourcing strategy that aims to improve collaboration with key suppliers to align on better processes is a _______ strategy.
Joint process improvement
What should procurement remember when creating KPIs?
KPIs should consider the whole supply chain
Which of the following supplier segments has the ability to be assertive in a negotiation and not cooperative?
Leverage products
When procurement says "we spend a lot of money with you and would like you to improve your price" it is approaching this supplier as a (hint: financial risk/supply risk)
Leverage suppliers
Which of the segments would a supplier of the following item fall under? Paper towels (high financial impact/low supply risk)
Leverage suppliers
What comes last in developing SRM capability?
Measure performance
The board is excited about a project, but procurement is not excited about the project.
Might need to do it
The board is excited about a project, but procurement is not excited about the project. Procurement:
Might need to do it
In Kraljic's Matrix, which one of the suppliers is NOT one of the segments?
None of the above
In which process are purchase order placed
Ordering cycle
In which process are purchase orders placed?
Ordering cycle
In which process is technology most commonly used?
Ordering cycle
What procurement process should be automated as much as possible?
Ordering cycle
Which process is more administrative in nature?
Ordering cycle
Which process starts with business requests for ordering goods?
Ordering cycle
Which procurement process is now often automated?
Ordering cycle
What can be used to shift and influence a negotiation?
Perspective and perception
Planning scenarios for responding to supply chain break downs represents an example of
Planning for risk response
Sourcing strategies are either _______ or ________ focused:
Price or value
Who should lead negotiations?
Procurement
Which is an example of a "Visible Cost" in reviewing a total cost ownership scenario?
Product and price
The most commonly used technology in procurement is?
Purchase order processing
What is Procurement responsible for in a business?
Purchasing
In which segment of the Kraljic's Matrix would procurement typically spend the least time?
Routine suppliers
In which segment will you typically find most suppliers?
Routine suppliers
Which of the segments would a supplier of the following item fall under? Low financial impact/low supply risk
Routine suppliers
What comes first in developing SRM capability?
Segment suppliers
Which of the below is NOT an important component of Supplier Relationship development?
Short-term decisions
What does procurement do?
Spend money, acquisition, purchase for the business, ensure value for the business, supplier management
Which group of suppliers will include the smallest number of suppliers?
Strategic partners
Which supplier segment will most likely include suppliers to consider for joint innovation?
Strategic partners
Negotiation can be found in which segment of the strategic sourcing process?
Strategic sourcing
Which of the procurement processes is considered modern?
Strategic sourcing
Which process begins with business needs and spend analysis, and ends with a supplier contract?
Strategic sourcing
Which process starts with business needs and spend analysis?
Strategic sourcing
In which segment of the Kraljic's Matrix would senior executives most engage?
Strategic suppliers
Which of the segments would these suppliers fall under? Proctor & Gamble, Unilever, General Mills (high financial impact/high supply risk)
Strategic suppliers
What does SRM stand for?
Supplier Relationship Management
Allocating part of our external spend with suppliers managed by diverse owners is
Supplier diversity
Future-oriented and world class procurement is mostly focused on
Supplier relationship management
In which process is technology least commonly used?
Supplier relationship management
Which process has the longest time horizon?
Supplier relationship management
Which process takes working relationships with suppliers?
Supplier relationship management
Who is ultimately the key supplier relationship owner?
The business
Who should lead specification setting?
The business
Originally procurement was mostly focused on
The ordering process
Modern procurement is mostly focused on
The sourcing process
Block chain technology may lead to a change in the playbook of tactics for procurement.
True
Consumers reward brands who use more sustainable practices.
True
Contract manufacturing is the process where we administer, maintain, and execute the contracts that we have agreed upon with our suppliers in the market.
True
High impact technologies include robotics and block chain.
True
In the centralized model policy can be more streamlined and harmonized.
True
In the decentralized model relationships with local suppliers can be effectively managed.
True
Risk is defined as any threat or disruption to a business
True
Risk is defined as any threat or disruption to a business.
True
Robotics can free up the staff and standardize the workflow.
True
Speedy delivery performance and a high forecast accuracy are indicators that a business has strong alignment between the sales team and operations group.
True
Sustainability can lead to greater supplier enabled innovation.
True
Sustainability in the supply chain is about the environmental footprint of the business.
True
Sustainability is a near universal agenda item in most supply chain and industries.
True
Technological advances are a prerequisite for moving towards best in class procurement.
True
Technology can help streamline and standardize a process.
True
The contract is a key outcome of the strategic sourcing process?
True
The use of robotics in procurement is expected to rise in the years to come
True
Total cost of ownership (TCO) can be defined as all relevant costs of doing business with a particular supplier for a particular good or service.
True
Understanding the project specifications is an important function of Procurement?
True
Cost savings and cost reductions are most widely used KPI in procurement.
True statement
Companies can include sustainable practices in the contract by mentioning everything except:
Use more plastic
A sourcing strategy that aims to combine orders across a number of parts of the business into one single negotiation in an effort to improve buying power is a _______ strategy.
Volume concentration
What sourcing strategy will assist with acquiring the right type of products desired to be sourced?
Weighted score decision matrix
A supplier with fluctuating prices represents a
financial risk
Developing a register of potential supply chain break downs is an example of
identifying risks
In Kraljic's Matrix, items that have high supply risk and low strategic importance are
leverage items
The benefits of total cost ownership (TCO) include all of the following, except
lower purchase prices
Deciding to raise inventory in case of supply shortfalls is an example of
mitigating risks
Asking suppliers for quality defect levels is an example of
monitoring risks
A successful negotiation is one that secures supplies, materials, and services
of the right quantity, at the right time, from the right source and at the right cost
A supplier with weak delivery performance represents an
operational risk
Planning scenarios for responding to supply chain break downs represents an example of
planning for risk response
The most important step in the negotiating process is
preparing for the negotiation
A supplier with poor labor practices represents a
reputational risk
In which segment of the Kraljic's Matrix will you typically find most suppliers?
routine suppliers
What comes first in developing SRM capability?
segment suppliers