Exam 2 Chapter Ending Quizzes 5-8

The Profit-Leverage Effect states that a decrease in purchasing expenditures will directly decrease profits

False

The purchasing function is one of the most value-enhancing functions in any organization, and therefore, it is not necessary to periodically monitor the purchasing function's performance against a set of standards or industry benchmarks.

False

Which cost of quality category includes performing audits to confirm that the quality system is operating properly?

Appraisal Costs

A strong supplier partnership requires that both buyer and supplier adopt a strong tactical perspective.

False

Award-winning suppliers serve as role models for other suppliers and may therefore be exempt from audits and certification programs

False

Industrial buyers purchase raw materials and other components for conversion into a finished product, but they do not purchase services or capital equipment.

False

Which one of the following is NOT one of the Seven Tools of Quality Control? Check Sheets Hysterical Charts Cause & Effect Diagrams Flow Diagrams

Hysterical Charts

Benefits of implementing an effective supplier certification program include all of the following EXCEPT?

Increasing the supplier base

What company originated the concept of Six Sigma? General Electric Motorola Toyota Ford

Motorola

The fastest or most immediate way that a purchasing person can directly impact the profit of their company is to:

Obtain a price reduction on the items they are buying

In public purchasing in the government & non-profit business sector, bidders (i.e., potential suppliers) are generally required to furnish bonds as an incentive to ensure that the successful bidder will fulfill the contract awarded. Which type of bond provides protection against 3rd party liens (i.e., debts) not fulfilled by the bidder?

Payment Bonds

In which sourcing category would an item typically be classified, if it is considered to be high value, high risk, and there are few suppliers, but they are excellent?

Strategic

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network.

True

The process of taking a statistically significant representative sample to be measured against the quality acceptance standard, is known as? Kaizen Six Sigma Lean Manufacturing Acceptance Sampling

Acceptance Sampling

The key characteristics to consider in the development and implementation of a Supplier Relationship Management System, include all of the following, EXCEPT?

Detachment

The manufacturing strategy in which the product is designed, engineered, and built to specifications only after the order has been received is called what? It is used when products are unique and extensively customized for the specific needs of individual customers. Make-to-Order (MTO) Make-to-Stock (MTS) Assemble-to-Order (ATO) Engineer-to-Order (ETO)

Engineer-to-Order (ETO)

In which item category would the sourcing strategies of consolidating volumes as a negotiation tool, using the competitive marketplace to reduce costs, and automating supplier interfaces to minimize process related costs, be appropriate?

Leverage Items

Performance Measures should be S.M.A.R.T. which is an acronym that means?

Specific, Measurable, Achievable, Relevant, Time-oriented

The Profit-Leverage Effect states that a decrease in purchasing expenditures will directly increase profits.

True

The goal of a good supplier performance evaluation system is to provide metrics that are:

Understandable, easy to measure, and focused on real value-added results

Which sourcing concept involves a supplier directly managing the buyer's inventories to reduce the buyer's inventory carrying costs and avoid stockouts?

Vendor Managed Inventory

Lean is a disciplined, statistical-based, data-driven methodology for identifying and removing the causes of defects and minimizing variability in manufacturing and in business processes

False

Which of the following is the best description of a Preferred Supplier?

A supplier who best meets all of your company's overall purchasing requirements

The term used to describe a debt secured by a bidder for the purpose of providing a guarantee that the successful bidder will accept the contract once awarded, is known as?

Bid Bond

The best supplier candidates for Supplier Relationship Management (SRM) include all of the following EXCEPT?

Developmental suppliers that need to make improvements

Which one of the following is NOT one of the 12 steps in the basic Purchasing Process?

Expediting

ISO 14000 is a widely accepted management and quality certification standard.

False

Lean is an operating philosophy or mindset that attempts to minimize the impact of supply variability and flaws in forecasting through the use of safety stock inventories True False

False

Which one of the following is NOT an element of Lean Manufacturing?

Mass Customization

Which sourcing strategy would typically be used for items with low profit margins, relatively stable demand, and high levels of competition?

Multi-source

Ethical sourcing policies should include such things as the reporting of supplier compliance to stakeholders, and detailing ethical sourcing expectations to suppliers.

True

Strategic Sourcing is a comprehensive approach for locating and sourcing key suppliers, so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace.

True

Products with low profit margin, relatively stable demand, and high levels of competition, are known as Functional Products. Correct answer:

True

Root Cause Analysis is a term that describes a wide range of approaches, tools, and techniques used to uncover causes of problems

True

Supplier Relationship Management is a comprehensive approach for locating and sourcing key suppliers, so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace

False

Which of the following is NOT one of the drivers of Strategic Sourcing?

Increasing the selling price of the product

The keys to developing successful supply partnerships include all of the following EXCEPT?

Individualized Objectives

Benefits derived from implementing an e-procurement system include all of the following EXCEPT?

Decentralizing Purchasing

Which of the following is an internal document that defines the need to purchase goods and/or services? This document does not constitute a contractual relationship with any external party.

Purchase Requisition

Lean Manufacturing emphasizes all of the following EXCEPT?

Large Batch Sizes