CPIM Module 3 I
Which of the following most limits the effect of changes on a supplier? Creation of order quantity stability through the use of fixed quantities Relaxation of drawing specification tolerances Establishment of due date reliability through the use of standard lead times Use of blanket orders and scheduled releases
Use of blanket orders and scheduled releases
Orders that provide the supplier with forward visibility of the requirements for a component are called: firm planned orders. open orders. planned orders. blanket orders.
blanket orders.
Cost reduction objectives with suppliers can best be achieved by: reengineering designs. volume purchasing. continuous improvement. cost-volume-profit analysis.
continuous improvement.
Buying from suppliers that manage waste to minimize the impact of their organization on the earth is known as: environmental scanning. environmentally responsible purchasing. six sigma. green manufacturing.
environmentally responsible purchasing. Environmentally responsible purchasing is an objective of purchasing departments to minimize the impact the organization has on the environment.
Identifying sources for procurement regardless of location is an example of: outsourcing. offshore sourcing. global sourcing. multisourcing.
global sourcing.
The replacement of internal capacity and production with that of a supplier's is known as: outpartnering. capacity buying. buying down. outsourcing.
outsourcing.
Direct delivery of material to a specified location on a plant floor near the production line is called: point-of-need. point-of-use. point-of-purchase. point-of-sale.
point-of-use. Point-of-use delivery is the direct delivery of material to a specified location on a plant floor near the operation where it is to be used.
A typical supplier performance evaluation would rate suppliers on their ability to meet delivery dates and: quote promises. transportation needs. quality specifications. hidden renewal requirements.
quality specifications.
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 the: required quantity. delivery timing. delivery window. required date.
required quantity.
What is a benefit of developing strategic alliances with key suppliers? Vertical integration Better response time from suppliers Ability to form long-term contracts Elimination of extra suppliers
Ability to form long-term contracts
Which of the following considerations of a supplier rating system would be most critical for the supplier? Accurate drawings for unique customer parts Clearly prepublished lead times Ability to compare suppliers with each other Performance reporting by month
Accurate drawings for unique customer parts
Visibility into suppliers' systems can allow an organization to prepare its own system to manage production and logistics. Which of the following is an example of this? Making decisions on a supplier's viability Adjusting production schedules in response to delayed material delivery Finding processes a supplier can eliminate to reduce costs Collecting data for the next sales and operations planning meeting
Adjusting production schedules in response to delayed material delivery
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? Freight Incoming inspection Material handling All of the above
All of the above
Long-term agreements with suppliers may include which of the following types of special arrangements? Simplified paperwork systems Specially designed returnable containers Effective personal contacts at each site All of the above
All of the above
The design of a product is improved by which of the following factors? Identification of process similarities Evaluation of standard part attributes Input from the supplier All of the above
All of the above
Which of the following steps completes the purchasing cycle? Selecting suppliers Approving a supplier's invoice for payment Issuing a purchase order Requesting quotations
Approving a supplier's invoice for payment
A certified supplier has begun making late deliveries. What is the first action the buyer should take? Communicate with the supplier to help identify the reason and resolve the problem. Increase the purchasing lead time. Start sourcing the goods from a different supplier. Change the supplier status from certified to non-certified.
Communicate with the supplier to help identify the reason and resolve the problem.
Which of the following approaches will have the least effect in reducing the cost of transactions? Blanket purchase order with multiple receipts Vendor scheduling Backflushing to floor stock balances Kanban system
Blanket purchase order with multiple receipts
Which of the following conditions is typically a prerequisite for a successful partnership with a supplier? Both companies are willing to make a long-term commitment to the partnership. There are many potential partners that can supply the items. The supplier is a source of items that are critical to the customer. The customer represents more than a third of the supplier's business.
Both companies are willing to make a long-term commitment to the partnership.
What is the first step in establishing a supplier partnership? Having the suppliers fill out a financial profile Ranking the suppliers in order of least price Building a level of trust in the relationship Defining the means of communication
Building a level of trust in the relationship
Which of the following is useful for businesses in becoming virtual supply chains in order to reduce costs and improve due-date performance? Business-to-business commerce (B2B) Business process reengineering (BPR) Business-to-consumer commerce (B2C) Business continuation plan (BCP)
Business-to-business commerce (B2B) Business-to-business commerce (B2B) is business between companies conducted over the internet.
What is a primary element for consideration when selecting a new supplier? Ability to perform all communication electronically Close proximity to the manufacturing facility Lowest price for the goods to be purchased Capability and reliability to make parts to specifications
Capability and reliability to make parts to specifications
Which design process attempts to meet all the needs of the stakeholders and should result in a product that can be quickly brought to the marketplace? Concurrent engineering Reverse engineering Product benchmarking Prototyping
Concurrent engineering Concurrent engineering refers to the simultaneous participation of all the functional areas of the firm in the product design activity.
In which transportation methodology do suppliers pack products so they can be easily sorted at intermediate warehouses or for outgoing shipments? Cross-docking Package-to-order Dock-to-stock Cross-shipping
Cross-docking
In an established pull system with some suppliers delivering as often as every four hours, which of the following performance measures is most important? Use of kanbans Parts availability Delivery reliability Required quantity
Delivery reliability
As part of supplier selection, a company should take which of the following actions? Rank the suppliers in order of geographic proximity. Exchange proprietary technical documents with potential suppliers. Encourage the development of in-house capabilities to be able to make components versus buying them. Determine material handling, inspection, and transportation costs.
Determine material handling, inspection, and transportation costs.
Which of the following is more characteristic of a general business contract than a customer-supplier partnership? Distributor provides all of the company's hardware and standard electrical components. Customer and supplier perform concurrent engineering on the design of a new product. Customer establishes a single-source relationship with the supplier for certain products. Supplier dedicates a portion of its capacity over a long-term basis to the customer.
Distributor provides all of the company's hardware and standard electrical components. This would be a contractual purchase agreement that does not involve the mutual commitment of a partnership.
What is a benefit of supplier partnerships? Encourages suppliers to invest in product development Ability to use blanket orders with multiple releases Dedicated resource for price negotiations Easier expediting of late materials
Encourages suppliers to invest in product development
A company defines the critical parameters for a component of a new product and then lets a supplier partner design the component. What is the most significant advantage of this approach? It enables a reduction in the marketing staff. It reduces the cost of the final product. It improves the performance of the final product. It simplifies internal project coordination.
It simplifies internal project coordination.
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? Safety stock Forecast Kanban Blanket order
Kanban
Which of the following contributes the most to a purchasing department's ability to improve supplier delivery reliability? Long-term contracts with suppliers Computerized purchase requisition system Improved relations between expediters and suppliers Use of electronic data interchange (EDI)
Long-term contracts with suppliers
Which of the following tasks is the responsibility of purchasing? Determining order quantities to achieve price breaks Measuring supplier performance Firming planned orders based on supplier shutdown times Designating due dates for blanket order releases
Measuring supplier performance
Which of the following factors is most important when partnering with a supplier? Available capacity Cultural diversity Mutual trust Geographic proximity
Mutual trust
What is the most likely reason for a lean manufacturing company to have only one supplier that uses kanban and returnable packaging designed for a specific part? It is unlikely that multiple suppliers can be found for the same part. Schedule and delivery are overly complicated with multiple suppliers. Containers are owned by suppliers and must be returned to them. Lean manufacturing companies have only one supplier for most parts.
Schedule and delivery are overly complicated with multiple suppliers.
A company is implementing lean principles, including reducing its supplier base. What is a key element for the supplier rating system? Delivery lead time On-time delivery Lowest cost Kanban cycle time
On-time delivery
A company purchases a high-volume commodity part from three suppliers. Which performance measure is most likely compared by the supplier rating system? On-time delivery Incoming quality Quoted lead time Price to cost ratio
On-time delivery
A make-to-stock company is considering improving its 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? Manufacturing environment End items Customer service level Production responsiveness
Production responsiveness
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? Transportation has been included in the total cost. Shipment frequency is weekly as opposed to monthly. The buyer has not evenly weighted each supplier's pricing. The supplier has included a one-time charge for tooling.
Shipment frequency is weekly as opposed to monthly.
What is a key reason for asking purchasing to be involved in the design of a new product? Purchasing has established relationships with key suppliers. A number of key components will need to be purchased. There will be a need for buyers to understand specifications. Buyers have design expertise with the product family.
Purchasing has established relationships with key suppliers.
Negotiating purchase order prices is resulting in the delay of procured materials. What should the buyer do to minimize this problem? Put together long-term contracts and purchase agreements with key suppliers. Increase purchasing lead times for future orders. Include negotiating capabilities as part of supplier performance measurements. Increase order quantities so fewer orders are required.
Put together long-term contracts and purchase agreements with key suppliers.
Which of the following most supports the principle that quality information between a customer and a supplier leads to product quality? Product tolerances are specified at six sigma levels. Drawings are done with the accuracy of computer-aided drafting (CAD). Qualified personnel in both companies have reviewed specifications and requirements. The supplier uses statistical process control on key tooling for the product.
Qualified personnel in both companies have reviewed specifications and requirements.
What is a benefit of supplier involvement early in the product development phase? Reduction in process design time Increase in the product life cycle Decreased purchasing lead time Higher profitability for the supplier
Reduction in process design time
A company has been a preferred supplier for several parts for a number of years. Which of the following information is of most importance on a purchase order? Required part number Required order quantity Required order due date Required terms/conditions
Required order due date
A company operates a strict pull system with its 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? Required carrier Required advance shipping notice Required time window Required date
Required time window
Which of the following supports the purchasing/supplier partnership concept? Order acknowledgments Lot traceability Acceptable quality level Single-source supplier
Single-source supplier
Which of the following is a key principle of lean purchasing? Single-source suppliers are used. Suppliers stock inventory at their location. Blanket orders are used. All packaging is returned to the supplier.
Single-source suppliers are used.
The goal of which of the following is to streamline the processes between an enterprise and its suppliers and make them more effective? Supply chain visibility Supplier-managed inventory Supplier relationship management (SRM) Customer relationship management (CRM)
Supplier relationship management (SRM) SRM is a comprehensive approach to managing an enterprise's interactions with the organizations that supply it with goods and services. The goal of SRM is to streamline the processes between an enterprise and its suppliers and make them more effective.
A company is developing a new transmission product, and it 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? Strategic Financial Technical Operational
Technical
What is the best reason for a company to use multiple suppliers for the same part? The company has a decentralized purchasing function. It is a complex product that requires no special skills to produce. Competing suppliers have quoted the same price, lead time, and quality. The company has multiple divisions with geographically separate locations.
The company has multiple divisions with geographically separate locations.
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? The part design is not well defined and will affect the product design. One supplier will ensure lower prices, shorter lead times, and higher quality. Concurrent engineering places the cost of part design on the supplier. It is too difficult to manage multiple suppliers for a single part design.
The part design is not well defined and will affect the product design. Concurrent engineering enables the part design to be done in parallel, with shared knowledge.
Which of the following statements is true of a situation in which the stocking unit of measure is different from the purchasing unit of measure? The bill of material will be in the purchasing unit of measure. The purchase order receipt will be in the purchasing unit of measure. Issues of inventory will be in the purchasing unit of measure. The standard cost will be in the purchasing unit of measure.
The purchase order receipt will be in the purchasing unit of measure.
Which of the following performance measurements is likely to be the most important to operations managers of a product line with medium volume and a short life cycle? Standard error of the forecast Capacity utilization Time to market Number of schedule changes
Time to market
What is the most compelling reason for establishing a supplier partnership? To simplify the overall purchasing process To reduce the need for purchasing paperwork To improve quality and delivery reliability To replace individual orders with scheduled releases
To improve quality and delivery reliability
What is a primary reason for using an alternative means of transportation when a part is late? To ensure part delivery To meet the due date To meet the promised date To save shipping expense
To meet the promised date
What is an appropriate objective for a buyer in paying a visit to a potential supplier? To assess the compatibility of the supplier's enterprise resources planning system To obtain information about the supplier's financial stability To verify the production and quality capabilities of the supplier To determine the supplier's capability for vendor-managed inventory
To verify the production and quality capabilities of the supplier
Which of the following actions by purchasing would reduce a manufactured product's environmental impact? Working with key suppliers to reduce product packaging Encouraging customers to reduce their carbon footprint Requiring suppliers to sign a statement that they do not use child labor Reengineering the purchasing processes to reduce time and costs
Working with key suppliers to reduce product packaging
A blanket order can be defined as: a long-term commitment to a supplier for the purchase of a quantity of goods. a purchase order that includes multiple items. a contract with the global headquarters of a supplier. a purchase order that includes all the items necessary for a new project.
a long-term commitment to a supplier for the purchase of a quantity of goods.
A supplier that provides services such as warehousing, freight forwarding, and delivery is known as: a broker. an importer/exporter. a third-party logistics provider (3PL). a second-tier supplier.
a third-party logistics provider (3PL).
The process of a supplier shipping directly to the purchaser's customer is known as: intraplant transfer. drop shipping. freight consolidation. freight forwarding.
drop shipping.
When product life cycle is a consideration, the production environment likely to have the most supplier partnerships is: make-to-stock. engineer-to-order. make-to-order. assemble-to-order.
make-to-stock.
Processes for identifying, assessing, and managing the environmental, social, and ethical risk in the supply chain are elements of: risk response planning. green reverse logistics. responsible procurement. fitness for use.
responsible procurement. Responsible procurement is ensuring the use of ethical sources of goods and services to bring about a positive impact and minimize the negative impact on society and the environment.
On-time supplier deliveries can be impacted most by: purchase order quantities. dedicated transportation carriers. supplier capacity. long lead times.
supplier capacity.
To eliminate waste, purchase orders can be replaced with: pegging reports. supplier schedules. supplier capacity requirements. action lists.
supplier schedules.
A company that has a supply chain partner provide warehouse and delivery services is using a: third-party logistics (3PL) provider. nominal trading partner. extended enterprise partner. virtual warehouse provider.
third-party logistics (3PL) provider.
A supplier is on site counting and restocking inventory. This is referred to as: cycle counting. consignment. outsourcing. vendor-managed inventory.
vendor-managed inventory.
