BCOR 360 Exam 2
Assume that you work for a company that is developing a new technology to allow noise cancellation of loud parties, neighbors, etc. The supplier your company is working closely with on developing that technology should be a _________ relationship.
Strategic alliance relationship
The most likely area that you will have lengthy supplier negotiations in purchasing is:
Strategic items, because of their strategic nature
Which of the following statements is correct?
TCO includes landed costs; You should use landed cost analysis for all purchase decisions
Reasons for early supplier involvement is:
To utilize the supplier's innovative ideas; Because the most cost and functionality is determined during design; Only B and C
A 100 point scoring system allows for more refined differences in supplier scoring than a 5 point scale.
True
If it is cheaper for a supplier to make something than for you to make it, you should outsource it.
True
Multi-criteria analysis is a tool that helps you compare "distinctly different" options.
True
Ongoing supplier assessment is generally unrelated to the supplier selection process
True
Purchasing savings can have a huge impact on the firm's profit leverage.
True
Suppliers may bring ideas, resources and skills to help make your company more competitive.
True
The Honda BP program is a type of supplier development.
True
To calculate results you multiply the score for each criterion by the associated weight and add up the results.
True
You are only outsourcing if you could have/used to produce the good or service internally, and are now choosing to source from outside the company.
True
When considering outsourcing, you should evaluate which of the following factors?
Whether the item is strategically important to you; How good you are at making the item versus how good suppliers are at making it; The total cost of ownership of the item compared to the cost to make the item internally; All of the above
As part of supplier integration:
You share information on your plans with the supplier; You communicate seamlessly; Only B and C
A leverage buy (on the strategic sourcing matrix) is one where there is:
You spend enough money to generate supplier competition for your business.
One of the key reasons for relatively cheap solar energy prices today is:
Aggressive investments in solar technology by Chinese firms who wanted to reduce the prices
Critical items (on the strategic sourcing matrix) are:
Also called strategic items
Supplier segmentation using the strategic sourcing matrix occurs during which step of the strategic sourcing process?
Analyze
Which of the following are stages (in order) in the strategic sourcing process?
Analyze, source, bid/negotiate contract, procure, reconcile and pay.
Bottleneck buys:
Are difficult to manage because there are few options.
Which of the following is not one of the four reasons to include a multi-criteria analysis in your toolkit?
comprehensiveness
What are the five activities of the SCOR model?
plan, source, make, deliver, return
Which step in the process helps you determine how important each criterion is?
set weights
The degree of supplier integration may vary, from ________ to _________ at the extremes.
Collaborative forecasting, supplier integrated manufacturing
In its relationship with Gordon Foods, Bob Evans did which of the following?
Consolidated to a single source; Gave the drivers access to the restaurants at night for delivery when no one else was there; Only A and C
When comparing costs for the outsourcing decision, compare _________________
Cost to make less fixed costs remaining after outsourcing versus TCO.
A strategic alliance is most likely in which spend category?
Critical
During the analyze stage of strategic souring, you:
Do your up-front homework to learn about the market, opportunities, and more
Which step in the process asks you to fill in your comparison matrix?
Evaluate options
As a purchasing manager, you should spend the same amount of time and effort on each purchasing decision.
False
Buying things for a company (purchasing) is just like buying things for yourself.
False
If we have more in inventory from one alternative versus the other when considering outsourcing, that is irrelevant.
False
Selecting weight is one of the least important aspects of developing a supplier selection model.
False
Sensitivity analysis is not relevant to the outsourcing decision.
False
Supplier development is generally necessary when moving to a different country.
False
outsourcing just means that you are buying something instead of making it.
False
What type of costs might still remain after you outsource an item?
Fixed overhead costs
Some of the effective ways that purchasing can help an organization compete include which of the following?
Get the best resources available in order to compete based on cost, quality, and innovation; Make sure you have enough supplies so that you don't have to shut the factory down; Only b and c
Which of the following is one of the seven rights of purchasing?
Getting the right material; Getting material from the right supplier; Only a and c
Category importance is determined by:
How much impact a particular category has on firm performance
The strategic sourcing matrix:
Is used to segment purchases; Is widely used in practice; Considers the importance of the category and the complexity of the market to classify purchases; All of the above
General Motors got in trouble with one of its suppliers of trim because:
It increased volume so much that the supplier was no longer profitable; It allowed its supplier to become too dependent upon it; The supplier filed bankruptcy and ceased operations; All of the above
The make or buy decision analysis tells us:
It is not that important to the company's success to outsource items that are not strategic to our success; Before outsourcing a strategic item, we should seriously consider our own ability to successfully make that item; Only A and C
A bottleneck item (on the strategic sourcing matrix):
It is usually a situation where the supplier has more power than the buyer; Are also known as unique items; Are usually relatively small areas of spending; All of the above
When it comes to negotiations, it is important to know that:
Knowledge is power
A purchase where there are a large number of competitive suppliers and you buy a fairly large amount relative to the market would most likely be classified as:
Leverage
During WWII, ________ increased the emphasis on purchasing.
Materials Shortages
As a purchasing manager, you have to make many purchasing decisions. The organization's secretary comes to you asking what type of office supplies you want for your employees' desks. This purchasing decision would be considered a _______ item.
Non-Critical
Which of the following is a "right" in the less formal definitions of purchasing?
Obtaining the right material; In the right quantity; At the right time; For delivery to the right place; All of the above
Which of the following is not a step in the strategic sourcing process?
Plan
Total cost of ownership may include which of the following items?
Price; Transportation; Additional packaging required for shipping; Inspection costs associated with buying; All of the above
during which step of the strategic sourcing process do you actually purchase items you have contracted for?
Procure
Potential supplier contributions from ESI include:
Providing feedback on feasibility of materials and processes; Suggest alternatives; Improve cost; Improve lead time; All of the above
________ increased visibility of purchasing from the mid 70s to the mid 80s.
Scarcity/inflation
During which step of the strategic sourcing process would you identify potential suppliers?
Source
In the SCOR model, purchasing is represented by:
Source
During which era did outsourcing make purchasing strategic?
Strategic Era
Leverage purchases:
A buyer's dream; Your best opportunity to really save money; Only B and C
Honda's BP program involves:
A formalized approach for teaching the supplier to improve its own processes
