SCIM 333 Exam 2 Review

Gmail is an example of:

Off-premise delivery.

A fair price:

The lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit.

When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of:

a time series forecasting technique

When selecting freight carriers, buyers are most concerned with:

ability to deliver on-time with no damages

Sustainability is the ability to:

achieve economic prosperity, a higher quality of life and protect natural systems.

"A" items in ABC analysis:

are particularly critical in financial terms

On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $150. If the inventory carrying cost is 25 percent per year and assuming no ordering costs

buying 100 at a time will save the company $3937.50 per year

Activity based costing attempts to correct the distortions built into product costing:

by tracking cost drivers of indirect costs and turning indirect costs into direct

In the portfolio matrix, characteristics of goods and services in the leverage quadrant are

competitive supply market, substitution is possible, price per unit is important.

When assessing the quality of a telecommunications provider, a key indicator of superior quality to a competitor is the ability to:

compress more high resolution information on the same bandwidth

The demand for a particular service may be:

continuous, discrete, or periodic

If the buyer wants to motivate the seller to manage total costs, the best type of contract is:

cost-plus-incentive-fee (CPIF)

A reduction in set-up costs and time impacts:

cycle inventories

The characteristic of a service that has the greatest impact on the ability to define, measure and control service quality is:

degree of tangibility

The best type of inspection to use is:

dependent on the nature of the purchase

When a supplier offers a lower price for a larger quantity, the buyer should:

determine the return on investment.

Identical prices received from various sources should:

draw attention if the specification is complex or detailed.

All quality improvement programs for goods are initiated by a desire to:

eliminate incoming inspection

Continuous Planning, Forecasting and Replenishment (CPFR) generates the most accurate forecast possible and develops effective replenishment plans by:

enabling multiple trading partners to collaborate.

Reverse marketing is:

encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains.

Supply management's role in environmental considerations is:

expanding because the goal of zero environmental impact affects the buying cycle.

Public purchasers are required to award contracts to the lowest "responsible" and "responsive" bidder. This means the bidder is:

fully capable and willing to perform the work and submits a bid that conforms to the invitation for bid.

The market approach to pricing:

implies that prices are set based on what the market will bear.

Outsourcing or using third party logistics services has:

increased as organizations focus on core competencies.

Intermodal transportation in North America has increased due in large part to:

increased reliability from technological and operational improvements

The zone of negotiation:

indicates the feasibility of negotiation and the likelihood of an agreement.

forward buying

involves purchasing for known or estimated future requirements.

A third party logistics (3PL) services provider:

is a separate company from the buyer's and supplier's organizations

A supplier's references:

may be useful if they are of similar size and objectives as the buyer's organization.

Decision trees:

may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option.

Assessment of a potential supplier's financial situation:

may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations.

In portfolio analysis, the goal when purchasing leverage items is:

minimize acquisition time and cost and price per unit.

In portfolio analysis, the goal when purchasing non-critical or routine spend is to:

minimize acquisition time and cost.

Quality control in services is:

more difficult for customized services delivered by highly skilled workers.

The Sherman Antitrust Act states that suppliers:

not talk with competitors about price.

Small suppliers:

often provide the greatest responsiveness and flexibility.

Organizations operating under a just-in-time system, require:

on-time deliveries

One of the advantages of integrated carriers (truck-air) like UPS and Federal Express is that they:

own their own aircraft

Capacity Requirements Planning (CRP)

performs for manufacturing resources what MRP does for materials.

ISO 9001: 2008:

provides guidance for continuous improvement of quality management systems to achieve sustained customer satisfaction.

Total Quality Management (TQM) tools include:

quality function deployment (QFD)

A material requirements planning (MRP) system:

requires explosion of the bill of material as the basis of planning.

A sampling technique that is based on the cumulative effect of information that every additional item in the sample adds as it is inspected is called:

sequential sampling

Items for which prices may be fixed or variable, by the job or by the hour, day, or week are called:

services.

The match between a commercially available material, good or service and the intended function is known as:

suitability

Which tool will focus everyone in the organization on cost management:

target costing

In FOB Origin:

the buyer gains title of the goods when the carrier signs at point of origin.

The learning curve is based on:

the common principle that one becomes more proficient with experience

A mode of transportation is:

the means by which people, freight or information gain mobility

The following cost is not a carrying, holding, or possession cost:

the purchase price of the item.

A cash discount allows

the seller to secure prompt payment, and the buyer to pay a lower price per unit.

Which of the following statements supports single sourcing:

the use of just-in-time production, stockless buying, or systems contracting

Decoupling inventories are carried:

to permit activities on either side of a major process

The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called:

total cost of ownership

Most direct costs are:

variable costs

An external failure cost is:

warranty costs

To avoid risk, a buyer can:

- hedge in a commodities market - require bid or performance bonds - decide not to do business in certain countries

Total cost of ownership (TCO) can used to:

- highlight cost reduction opportunities - compare suppliers in a supplier selection decision - prepare for a negotiation - assess the reasonableness of a supplier's prices

Supply may contribute to the containment of the costs of poor quality by addressing:

-appraisal costs -internal costs -external costs -prevention costs

When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

-decide if negotiation makes sense -establish negotiation points -avoid setting unrealistic expectations

ISO 9001: 2008: provides a set of...

...standardized requirements for a quality management system, regardless of what the user organization does, its size, or whether it is in the private or public sector. It provides a tested framework for a systematic approach to managing organizational processes to consistently deliver product that satisfies customers' expectations.