AP2 Section 3 Part E

A benefit of supplier involvement early in the product development phase is a. Reduction in process design time b. Decreased purchasing lead time c. Increase in the product life cycle d. Higher profitability for the supplier

a. Reduction in process design time

Which of the following approaches will have the least affect in reducing the cost of transactions? a. A kanban system b. Blanket PO with multiple receipts c. Vendor scheduling d. Backflushing to floor stock balances

b. Blanket PO with multiple receipts

A technique useful for businesses to become virtual supply chains in order to reduce costs and improve due-date performance is a. Business to consumer (B2C) b. Business -to-business commerce (B2B) c. Business continuation plan (BCP) d. Business process re-engineering (BPR)

b. Business -to-business commerce (B2B)

Cost reduction objectives with suppliers can best be achieved by a. Re-engineering designs b. Continuous improvement c. Cost-volume-profit analysis d. Volume purchasing

b. Continuous improvement

An appropriate objective for a buyer to pay a visit to a potential supplier is to a. Obtain information about the supplier's financial stability b. Verify the production and quality capabilities of the supplier c. Assess the compatibility of the supplier's ERP system d. Determine their capability for vendor-managed inventory

b. Verify the production and quality capabilities of the supplier

The design of a product is improved by which of the following factors? I. Identification of process similarities II. Evaluation of standard part attributes III. Input from the supplier a. I and II only b. I and III only c. II and III only d. I, II, and III

d. I, II, and III

The most compelling reason for establishing a supplier partnership is to a. Simply the overall purchasing process b. Reduce the need for purchasing paperwork c. Replace individual orders with scheduled releases d. Improve quality and delivery reliability

d. Improve quality and delivery reliability

Which of the following tasks are the responsibility of purchasing? a. Designating due dates for blanket order releases b. Determining order quantities to achieve price breaks c. Firming planned orders based on supplier shutdown times d. Measuring supplier performance

d. Measuring supplier performance

A matrix chart has been developed to compare supplier pricing for a new part so standard cost can be established. Which of the following costs should be included? a. All of the above b. Material handling c. Freight d. Incoming inspection

a. All of the above

Which if the following conditions typically is a prerequisite for a successful partnership with a supplier? a. Both companies are willing to make a long-term commitment to the partnership. b. There are many potential partners that can supply the items. c. The supplier is a source of items that are critical to the customer. d. The customer represents more than a third of the suppliers business.

a. Both companies are willing to make a long-term commitment to the partnership.

Which of the following communications is the primary means of notifying suppliers of needs in a make-to-stock environment where the company is minimizing in-plant inventories? a. Kanban b. Safety Stock c. Forecast d. Blanket order

a. Kanban

Which of the following contributes the most to a purchasing department's ability to improve supplier delivery reliability? a. Long-term contracts with suppliers b. A computerized purchase requisition system c. Use of electronic data interchange (EDI) d. Improved relations between expediters and suppliers

a. Long-term contracts with suppliers

Which of the following production environments is likely to have the most supplier partnerships where product life cycle is a consideration? a. Make-to-stock b. Make-to-order c. Assemble-to-order d. Engineer-to-order

a. Make-to-stock

A company purchases a high-volume commodity part from three suppliers. Which of the following performance measures is most likely compared by the supplier rating system? a. On time delivery b. Incoming quality c. Quoted lead time d. Price to cost ratio

a. On time delivery

Negotiating purchase order prices is resulting in the delay of procured materials. To minimize this problem, the buyer should a. Put together long-term contracts and purchase agreements with key suppliers b. Increase purchasing lead times for future orders c. Include negotiating capabilities as part of supplier performance measurements d. Increase order quantities so fewer orders are required

a. Put together long-term contracts and purchase agreements with key suppliers

A company's suppliers are set up with specific delivery windows of days, weeks, or months within which they must deliver parts. The most likely information the supplier needs for each release is a. Required quantity b. Required date c. Delivery timing d. Delivery window

a. Required quantity

Two suppliers for a new part have responded to a request for quote based on annual usage projections. The buyer is evaluating the suppliers on total cost criteria. With all things being generally equal otherwise, which of the following reasons best explains why total cost is higher for one supplier? a. Shipment frequency is weekly as opposed to monthly b. Transportation has been included in the total cost c. The buyer has not evenly weighted each supplier's pricing d. The supplier has included a one-time charge for tooling

a. Shipment frequency is weekly as opposed to monthly

A benefit of supplier partnerships is a. Suppliers are encouraged to invest in product development b. The ability to use blanket orders with multiple releases c. Easier expediting of late materials d. Having a dedicated resource for price negotiations

a. Suppliers are encouraged to invest in product development

A company is developing a new transmission product, and needs to automatically pick up the final assembly via an overhead monorail for transport to shipping. Which of the following types of partnerships is most appropriate? a. Technical b. Operational c. Strategic d. Financial

a. Technical

A primary reason for using an alternative means of transportation when a part is late is a. To meet the promised date b. To ensure part delivery c. To meet the due date d. To save shipping expense

a. To meet the promised date

Which of the following actions by purchasing would reduce a manufactured product's environmental impact? a. Working with key suppliers to reduce product packaging. b. Re-engineering the purchasing processes to reduce time and costs. c. Encouraging customers to reduce their carbon footprint. d. Requiring suppliers to sign a statement that they do not use child labor.

a. Working with key suppliers to reduce product packaging.

Which of the following considerations of a supplier rating system would be most critical for the supplier? a. Ability to compare suppliers with each other b. Accurate drawings for unique customer parts c. Performance reporting by month d. Clearly pre-published lead times

b. Accurate drawings for unique customer parts

In an established pull system with some suppliers delivering as often as every four hours, which of the following performance measures is most important? a. Part availability b. Delivery reliability c. Required quantity d. Use of kanbans

b. Delivery reliability

As part of supplier selection, a company should take which of the following actions? a. Exchange proprietary technical documents with potential suppliers b. Determine material handling, inspection and transportation costs c. Encourage the development of in-house capabilities to be able to do more make vs. buy d. Rank the suppliers in order of geographic proximity

b. Determine material handling, inspection and transportation costs

A typical supplier performance evaluation would rate suppliers on their ability to meet delivery dates and a. Transportation needs b. Quality specifications c. P:D ratios d. Quote promises

b. Quality specifications

A company has been a preferred supplier for a number of years for several parts. Which of the following information is of most importance on a purchase order? a. Required terms/conditions b. Required order due date c. Required part number d. Required order quantity

b. Required order due date

A company operates a strict pull system with their suppliers with shipments every two, four and eight hours. A third party logistics supplier manages all incoming and outgoing shipments. Which of the following delivery performance measures is most likely to incorporate a tolerance to allow for uncontrollable conditions? a. Required carrier b. Required time window c. Required date d. Required advance shipping notice

b. Required time window

The best reason for a company to use multiple suppliers for the same part is a. The company has a decentralized purchasing function b. The company has multiple divisions with geographically separate locations c. It is a complex product that requires no special skills to produce d. Competing suppliers have quoted the same price, lead time and quality

b. The company has multiple divisions with geographically separate locations

Which of the following statements is correct when the stocking unit of measure is different from the purchasing unit of measure? a. The standard cost will be in the purchasing unit of measure b. The purchase order receipt will be in the purchasing unit of measure c. The bill of material will be in the purchasing unit of measure d. Issues of inventory will be in the purchasing unit of measure

b. The purchase order receipt will be in the purchasing unit of measure

A supplier is on site counting and restocking inventory. This is referred to as a. Outsourcing b. Vendor-managed inventory c. Cycle counting d. Consignment

b. Vendor-managed inventory

A company defines the critical parameters for a component of a new product and then lets a supplier partner design the component. The most significant advantage of this approach would be that it: a. enables a reduction in the marketing staff. b. simplifies internal project coordination. c. improves performance of the final product. d. reduces the cost of the final product.

b. simplifies internal project coordination.

Fourth party logistics (4PL) and third party logistics (3PL) are different in that a. A 3PL typically manages outbound transportation only, and a 4PL typically manages inbound and outbound transportation b. A 3PL typically manages outbound transportation only, and a 4PL typically manages finished good warehousing and outbound transportation c. A 3PL typically manages outbound transportation only, and a 4PL ideally manages all aspects of the client's supply chain. d. A 3PL typically manages outbound transportation only, and a 4PL typically manages warehouses with vendor managed inventory services

c. A 3PL typically manages outbound transportation only, and a 4PL ideally manages all aspects of the client's supply chain.

A certified supplier has begun making late deliveries. The first action the buyer should take is to a. Increase the purchasing lead time b. Change the certified supplier status to non-certified c. Communicate with the supplier to help identify the reason and resolve d. Start sourcing the goods from a different supplier

c. Communicate with the supplier to help identify the reason and resolve

A transportation methodology where suppliers pack products so they can be easily sorted at intermediate warehouses or for outgoing shipments is known as a. Package to order b. Cross-shipping c. Cross-docking d. Dock-to-stock

c. Cross-docking

Which of the following relationships is more characteristic of a general business contract than a customer-supplier partnership? a. Customer and supplier perform concurrent engineering on the design of a new product b. Supplier dedicates a portion of their capacity over a long-term basis to the customer c. Distributor provides all of the company's hardware and standard electrical components d. Customer establishes a single-source relationship with the supplier for certain products

c. Distributor provides all of the company's hardware and standard electrical components

The process of a supplier shipping directly to the purchaser's customer is known as a. Freight forwarding b. Intraplant transfer c. Drop shipping d. Freight consolidation

c. Drop shipping

Identifying sources for procurement regardless of location is an example of a. Offshore sourcing b. Multisourcing c. Global sourcing d. Outsourcing

c. Global sourcing

A blanket order can be defined as a a. Contract with the global headquarters of a supplier b. Purchase order that includes multiple items c. Long term commitment with a supplier for the purchase of a quantity of goods d. Purchase order that includes all the items necessary for a new project

c. Long term commitment with a supplier for the purchase of a quantity of goods

Direct delivery of material to a specified location on a plant floor near the production line is called a. Point-of-need b. Point-of-purchase c. Point-of-use d. Point-of-sale

c. Point-of-use

Processes for identifying, assessing and managing the environmental, social, and ethical risk in the supply chain are elements of a. Green reverse logistics b. Fitness for use c. Responsible procurement d. Risk response planning

c. Responsible procurement

The purchasing/supplier partnership concept is supported by a. Lot traceability b. Acceptable Quality Level c. Single source supplier d. Order acknowledgements

c. Single source supplier

On-time supplier deliveries can be impacted most by a. Purchase order quantities b. Long lead times c. Sufficient supplier capacity d. Dedicated transportation carriers

c. Sufficient supplier capacity

The goal of which of the following is to streamline and make more effective the processes between an enterprise and its suppliers? a. Supply chain visibility b. Supplier-managed inventory c. Supplier relationship management (SRM) d. Customer relationship management (CRM)

c. Supplier relationship management (SRM)

When designing a new part, a company can contract with one or more suppliers in a competitive bidding situation, or perform concurrent engineering with one supplier. Which of the following situations would most support concurrent engineering? a. Concurrent engineering places the cost of part design on the supplier b. It is too difficult to manage multiple suppliers for a single part design c. The part design is not well defined and will affect the product design d. One supplier will ensure lower prices, shorter lead times and higher quality

c. The part design is not well defined and will affect the product design

Which of the following elements is a key principle of lean purchasing? a. Suppliers stock inventory at their location b. Blanket orders are used c. The use of single source suppliers d. All packaging is returned to the supplier

c. The use of single source suppliers

A company that uses a supply chain partner for warehouse and delivery services is using a a. Virtual warehouse provider b. Extended enterprise partner c. Third party logistics (3PL) provider d. Nominal trading partner

c. Third party logistics (3PL) provider

Which of the following performance measurements is likely to be the most important to operations managers of a medium volume, short life cycle product line? a. capacity utilization b. number of schedule changes c. time to market d. standard error of the forecast

c. time to market

Visibility into suppliers'systems can allow the organization to prepare its own system to manage production and logistics—for example a. to make decisions on a supplier's viability b. to find processes a supplier can eliminate to reduce the cost c. to adjust production schedules in response to delayed material delivery d. to collect data for the next S&OP meeting

c. to adjust production schedules in response to delayed material delivery

Which of the following steps completes the purchasing cycle? a. Requesting quotations b. Selecting suppliers c. Issuing a purchase order d. Approving a supplier's invoice for payment

d. Approving a supplier's invoice for payment

The first step in establishing a supplier partnership is a. Having the suppliers fill out a financial profile b. Ranking the suppliers in order of least price c. Defining the means of communication d. Building a level of trust in the relationship

d. Building a level of trust in the relationship

A design process that attempts to meet all the needs of the stakeholders and should result in a product that can be quickly brought to the marketplace is a. Prototyping b. Product benchmarking c. Reverse engineering d. Concurrent engineering

d. Concurrent engineering

Buying from suppliers that manage waste to minimize the impact of their organization on the earth is known as a. Environmental scanning b. Six sigma c. Green manufacturing d. Environmentally responsible purchasing

d. Environmentally responsible purchasing

Long-term agreements with suppliers may include which of the following types of special arrangements? I. Simplified paperwork systems II. Returnable containers III. Specially designed containers IV. Effective personal contacts at each site a. IV only b. II and III only c. I, II, and III only d. I, II, III, and IV

d. I, II, III, and IV

Which of the following factors is most important when partnering with a supplier? a. Cultural diversity b. Geographic proximity c. Available capacity d. Mutual trust

d. Mutual trust

A company is implementing lean principles, including reducing their supplier base. A key element for the supplier rating system is a. Kanban cycle time b. Lowest cost c. Delivery lead time d. On-time delivery

d. On-time delivery

The replacement of internal capacity and production with that of a supplier's is known as a. Buying down b. Capacity buying c. Outpartnering d. Outsourcing

d. Outsourcing

A make-to-stock company is considering improving their customer service level through a combination of shipping from finished goods and shipping from final assembly. Which of the following inventory management considerations is most important to this new strategy? a. Customer service level b. End items being considered c. Manufacturing environment d. Production responsiveness

d. Production responsiveness

A key reason for asking purchasing to be involved in the design of a new product is that a. There will be a need for buyers to understand specifications b. A number of key components will need to be purchased c. Buyers have design expertise with the product family d. Purchasing has established relationships with key suppliers

d. Purchasing has established relationships with key suppliers

An action that most supports the principle that quality of information between a customer and supplier leads to product quality is a. Product tolerances are specified at 6 sigma levels b. The supplier uses statistical process control on key tooling for the product c. Drawings are done with the accuracy of Computer Aided Drafting (CAD) d. Qualified personnel in both companies have reviewed the specifications and requirements

d. Qualified personnel in both companies have reviewed the specifications and requirements

To eliminate waste, purchase orders can be replaced with a. Action lists b. Pegging reports c. Supplier capacity requirements d. Supplier schedules

d. Supplier schedules

A benefit of developing strategic alliances with key suppliers is a. Vertical integration b. Elimination of extra suppliers c. Better response time from suppliers d. The ability to form long-term contracts

d. The ability to form long-term contracts

A primary element for consideration when selecting a new supplier is a. Lowest price for the goods to be purchased b. The ability to perform all communication electronically c. Close proximity to the manufacturing facility d. The capability and reliability to make parts to the specification

d. The capability and reliability to make parts to the specification

An action that most limits the effect of changes on a supplier is a. Create order quantity stability through the use fixed quantities b. Relaxation of drawing specification tolerances c. Establish due date reliability through the use of standard lead times d. Use of blanket orders and scheduled releases

d. Use of blanket orders and scheduled releases