Intro to Supply Chain Management

Future trends in supply chain management include increasing inventory levels and considering the elimination of logistics intensive online retailing

False

The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered elements of logistics

False

The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as EMS, which stands for total cost of ownership

False

The bullwhip effect is the result of companies producing excessive defective products; defective items are whipped back from the end customer toward the manufacturer of the defect

False

The modern day business environment must deal with a more homogenous consumer base, which has caused the evolution of a more "push" oriented environment where suppliers must focus on manufacturing high volumes of standardized goods.

False

The objective of CPFR is to optimize the supply chain by improving demand forecast accuracy, delivering the right product at the right time to the right location, reducing inventories across the supply chain, avoiding stock-outs, and improving customer service. As a result of the many benefits attributed to CPFR, this business practice has been widely adopted.

False

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.

False

The true value of CPFR comes from the sophisticated forecasting algorithms that provide companies with highly accurate forecasts, not from the exchange of forecasting information.

False

The universally accepted definition of supply chain management is "the management and integration of the parties involved in producing the end items coveted by consumers."

False

When evaluating a supplier it is not possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to inventory.

False

When using a weighted-criteria evaluation system with five or more categories, vendors should be ranked based on their score in the two highest weighted categories, the others should be discarded.

False

While a manufacturer may have substantial influence over its first tier suppliers, their influence over second and third tier suppliers is typically much higher.

False

An outsourcing program can result in all of the following positive outcomes, except: a. Reducing staffing levels b. Decreased need for supplier management c. Cost reduction d. Gains in manufacturing flexibility

B: Decreased need for supplier management

Which of the following is NOT important in developing a successful strategic alliance? a. Developing performance metrics b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Investigating the capabilities and core competencies of the supplier d. Open lines of communication that both promote sharing and secure confidentiality

B: Developing efficient processes that will remain unchanged for the duration of the partnership

If a distribution company that focused on warehousing and distribution of grocery items decided to purchase a chain of grocery stores, the distribution company would be exemplifying: a. Backward vertical integration b. Forward vertical integration c. Backward horizontal integration d. Forward horizontal integration

B: Forward vertical integration

Which of the following is an example of an internationally recognized supplier certification program focused on quality? a. MRP II b. ISO 9000 c. 3PL d. CAPS

B: ISO 9000

According to the textbook, which is typically utilized when companies are deciding whether or not to outsource? a. Acceptance sampling b. Make-or-buy analysis c. Selective sourcing analysis d. Benchmarking

B: Make-or-buy analysis

Assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements are all important issues that are most closely related to: a. Purchasing b. Operations c. Integration d. Distribution

B: Operations

Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

B: Post-transaction costs

According to the text, the FOUR important elements of the supply chain are: a. Purchasing, manufacturing, transportation, retail stores b. Purchasing, operations, distribution, integration c. Purchasing, manufacturing, distribution, transportation d. Purchasing, operations, manufacturing, distribution

B: Purchasing, operations, distribution, integration

The inventory level where suppliers replenish their customer's inventory with a predetermined order quantity is called the: a. Channel Equity Level b. Reorder point c. Bill Back d. MRO point

B: Reorder point

Which of the following is FALSE? a. The use of 3PL's has been increasing as companies seek more effective supply chain strategies. b. VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items c. The use of 3PL providers allows companies to gain competitive advantages without having to gain the required knowledge through firsthand experience. d. VMI allows suppliers to manage their customers' inventory provided they have the capability to see inventory levels in real time

B: VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items

The exponential smoothing forecast has the same value as the naïve forecast when in the exponential smoothing model is equal to: a. 0 b. 0.5 c. 1 d. Insufficient information provided to determine answer

C: 1

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.20), Cost(0.50). The scores for each category are shown below. Which of the following companies has the highest total score? a. Company A: Quality(90), Delivery(80), Cost(60) b. Company C: Quality(70), Delivery(80), Cost(80) c. Company B: Quality(70), Delivery(90), Cost(80) d. All companies scored the same.

C: Company B: Quality(70), Delivery(90), Cost(80)

Given the following make-buy information, what would be the break-even point? Make Option Buy Option Fixed Costs $7500 $1500 Variable Costs $ 4 $ 9 a. 1200 units b. 1708 units c. 690 units d. 460 units

A: 1200 units

Which of the following would be a good reason to outsource (buy) versus making? a. A firm lacks the technology or expertise to produce an item b. To utilize existing capacity within a company's own firm c. To have more direct control over the deign and production of an end item d. No competent supplier presently produces the needed item

A: A firm lacks the technology or expertise to produce an item

If a tracking signal is positive, which one of the following is true? a. Actual value is higher than forecast b. Actual value is less than forecast c. Actual value is equal to forecast d. Unable to draw any conclusion

A: Actual value is higher than forecast

Which of the following was a popular way in the 1990's of developing radically new business processes in an effort to reduce waste and increase performance? a. Business process reengineering b. Benchmarking c. Process integration d. Vertical integration

A: Business process re-engineering

While most public procurement is focused on goals similar to those of purchasing departments in the private sector, U.S. federal government purchases must comply with the: a. Federal Acquisition Regulation b. Fair Standards and Equitable Purchases Act c. Federal Code of Conduct for Procurement d. Services and Materials Acquisition Act

A: Federal Acquisition Regulation

Which of the following indices provided by the Institute for Supply Management (ISM) is considered the most important by economists because it is a composite of five weighted, seasonally adjusted indices? a. Purchasing Managers Index b. Export Orders Index c. Production and Inventory Index d. New Orders Index

A: Purchasing Managers Index

A certain supply chain is made up of: 1. Raw Materials Supplier 2. Components Manufacturer 3. A firm that manufacturers Sub-assemblies 4. End Item Manufacturer 5. Wholesale Distributor 6. Local Retail Chain Warehouse Who is considered the second tier supplier of the firm that manufacturers Sub-assemblies? a. Raw Materials Supplier b. Wholesale Distributor c. The final end item consumer d. Components Manufacturer e. Local Retail Chain Warehouse

A: Raw materials supplier

On occasion, firms assist suppliers, new or old, to improve their processing capabilities, product or service quality, delivery effectiveness, and cost performance by providing the required technical and financial assistance. This is referred to as: a. Supplier development b. Outsourcing c. Centralized purchasing d. Supplier hybridization

A: Supplier development

Some of the benefits of CPFR include strengthening partner relationships, providing an analysis of sales and order forecasts both upstream and downstream, and allowing collaboration on future requirements and planning.

True

Some of the important steps involved in implementation of a CPRF process model include developing a collaborative arrangement, creating a sales forecast, creating an order forecast, and generating those orders.

True

Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements, additional purchasing contracts, or contract extensions on existing contracts.

True

Successful supply chain integration in a retail industry occurs when supply chain participants realize that the needs and desires of the end item retail consumer dictate the objectives and policies of all the other supply chain participants.

True

The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier, but only give out the award every five years.

True

The Internet and ERP systems have made global teamwork both possible and necessary for companies trying to compete in today's global marketplace

True

The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers.

True

Trucking companies, airfreight shipping companies, and information system providers can all be considered service providers to the supply chain

True

According to the textbook, Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices.

False

In the context of Supply Chain Management, the acts of obtaining raw materials, services, maintenance, repair and operating supplies for money can all be defined as purchasing

True

Manufacturers typically have very little influence over second and third tier suppliers when compared to the influence they hold over first tier suppliers.

True

Lean production is typically associated with which of the following company's production systems? a. Proctor and Gamble b. Toyota c. Boeing d. Intel

B: Toyota

Transportation management, customer relationship management, network design, and service response logistics are all important issues that are most closely related to: a. Purchasing b. Manufacturing c. Integration d. Distribution

D: Distribution

Which of the following acronyms is NOT paired with its correct "translation?" a. TQM Total Quality Management b. JIT Just-in-Time c. MRP Materials Requirements Planning d. ERP Estimated Response Parameters

D: ERP - Estimated Response Parameters

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to strengthen its present supplier base through certification programs in an effort to improve their output quality.

False

According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be beneficial to buyer-supplier relationships since it intensifies competition between suppliers and will likely increase the quality levels of the items produced.

False

According to the textbook, retail stores are considered the focal firms in modern supply chains.

False

According to the textbook, supply chains include raw materials suppliers, intermediate component manufacturers, end-product manufacturers, but they do not include warehouses and retailers

False

Centralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

False

Companies that lack internal expertise in a specific functional area would likely consider insourcing.

False

Effective supply chain management relies on competitive bidding, corporate privacy, and contracts privacy, and contracts based on short-term performance

False

Examples of nontariffs include quotas, licensing agreements, and embargoes imposed on import and exports.

False

Examples of tariffs include quotas, licensing agreements, and embargoes.

False

If the break-even point in a typical make-buy scenario is 24,000 units and 8,000 units are required, than the firm should choose to make.

False

If you felt that recent demand trends were more significant, and thus should be emphasized more in formulating a forecast, then in forecasting demand for the upcoming demand period, you would probably favor using a simple moving average over the conventional weighted moving average.

False

If you were calculating a forecast using an exponential smoothing model, a calculation using = 0.2 would be putting a greater emphasis on recent data, while a calculation using = 0.8 would be putting a greater emphasis on past data. Thus a lower is more responsive to changes in demand in the most recent periods.

False

In a TCO system, certification and training of suppliers would be considered post-transaction costs.

False

In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to total more than 1.00 and less than 100.

False

In order to maintain a shared vision, the buyer alone should establish the objectives of the partnership, which must then be fulfilled by the actions of the supplier.

False

In the context of Supply Chain Management, the acts of obtaining raw materials, services, maintenance, repair and operating supplies for money can all be defined as integration.

False

Industrial supply chain member buyers purchase their merchandise in volume to take advantage of quantity discounts, transportation economy, and storage efficiency, and then they create value through services like consolidating merchandise or break bulking.

False

Product parts, processes, and product assembly should all be designed by the manufacturing firm to assure a single-minded approach that the suppliers can follow. Supplier involvement in these design phases is considered counterproductive.

False

Quantitative forecasting methods are based on opinions and intuition, whereas qualitative forecasting methods use mathematical models and relevant historical data to generate forecasts.

False

Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as innovative products.

False

Reverse logistics activities include negotiating purchasing contracts with suppliers and delivering small shipment from manufacturer to distribution centers

False

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by TCO software

False

Successful supply chain integration occurs when supply chain participants realize that the needs and desires of the end item manufacturer dictate the objectives and policies of all the other supply chain participants.

False

The Institute of Supply Management (ISM) surveys more than 300 purchasing and supply executives in the United States using a questionnaire seeking information on "changes in production, new orders, new export orders, imports, employment, inventories, prices, lead-times, and the timeliness of supplier deliveries in their companies comparing the current month to the previous month." The ISM Report on Business focuses only on the manufacturing sector.

False

The United States' Federal Acquisition Streamlining Act (FASA) allows government purchases that are less than $250,000 to occur through a simplified procedure that includes full and open competitive bidding

False

The WTO is a trade organization seeking to establish trade barriers that will protect member countries by excluding nations that pose an economic threat.

False

While most companies pursuing a sustainable supply chain program are focusing on efficient and clean transportation of cargo, few see any benefits in utilizing sustainable purchasing initiatives.

False

While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices.

False

A comprehensive SRM strategy would likely include dedicated supplier managers, processes that would help in establishing standardized best practices, and the utilization of tools that would help gather and evaluate results.

True

According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during manufacturing.

True

According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components.

True

According to the textbook, supply chains include raw materials suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors,and retailers

True

According to the textbook, the end-product manufacturer is considered the focal firm in modern supply chains.

True

According to the textbook, the keys to successful supply chain management include trust and honest, accurate communications between supply chain partners.

True

Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.

True

Examples of forecasting accuracy measures are Mean Absolute Deviation, Mean Absolute Percentage Error, and Mean Square Error

True

Future trends in supply chain management include increasing supply chain responsiveness and considering the negative environmental impacts of supply chains.

True

ISO 14000 is a series of international standards for environmental management.

True

If the break-even point in a typical make-buy scenario is 10,000 units and 15,000 units are required, than the firm should choose to make.

True

In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs.

True

In the Delphi forecasting method, a group of internal and external experts are surveyed during several rounds in terms of future events and long-term forecasts of demand but the group members do not physically meet.

True

Merchant supply chain member buyers purchase their merchandise in volume to take advantage of quantity discounts, transportation economy, and storage efficiency, and then they create value through services like consolidating merchandise or break bulking.

True

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.

True

Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for suppliers to follow.

True

One of the goals of an effective CPFR system is to minimize the negative impacts of the bullwhip effect on supply chains.

True

Paperless transactions are now possible through e-procurement and Web-based services, these would all be considered sustainable business practices.

True

Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as functional products.

True

Reverse auctions are often run via third party providers known as application service providers (ASP's). These ASPs often charge both buyers and sellers a fee for participating in these reverse auctions.

True

Reverse logistics activities include the return of defective and damaged items to the manufacturer, and the recycling of used packaging

True

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.

True

Some of the leading suppliers of CPFR solutions mentioned in the textbook are JDA Software Group, i2 Technologies, and Oracle.

True

The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered elements of operations

True

The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as TCO, which stands for total cost of ownership.

True

The difference between a simple regression forecast and a multiple regression forecast is that simple regression is used when there is only one explanatory (or independent) variable, while multiple regression is used when there are numerous explanatory variables.

True

While Inventory turnovers can be calculated a number of different ways, a common way to calculate inventory turnovers is by dividing the cost of goods sold by the average inventory at cost

True

While most companies pursuing a sustainable purchasing program are focusing on paper, retailers like Corporate Express and Staples say they are seeing an increased demand for sustainable products across the board.

True

Some measures of forecasting accuracy include mean absolute deviation, mean absolute percentage error, and mean squared error. The formula for each is dependent on the forecast error, which is calculated by using the equation: a. Actual demand for period t divided by the forecasted demand for period t b. Actual demand for period t plus the forecasted demand for period t c. Actual demand for period t minus the forecasted demand for period t d. The average of Actual demand for period t and forecasted demand for period t

C: Actual demand for period t minus the forecasted demand for period t

Given the following make-buy information, what would be the break-even point? Make Option Buy Option Fixed Costs $15000 $1250 Variable Costs $ 5 $ 10 a. 917 units b. 2875 units c. 1083 units d. 2750 units

D: 2750 units

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.40), Cost(0.30). The scores for each category are shown below. Which of the following companies has the highest total score? a. Company A: Quality(90), Delivery(80), Cost(60) b. Company C: Quality(70), Delivery(95), Cost(60) c. Company B: Quality(70), Delivery(80), Cost(80) d. All companies scored the same.

D: All companies scored the same

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

True

The term Supply Chain Management and the field of study it represents today seems to have emerged in the: a. 1980's b. 1970's c. 1960's d. 1990's

A: 1980's

Costs associated with supplier certification, investigating alternative suppliers, and investigating alternative delivery options can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

A: Pre-transaction costs

Which of the following is TRUE? a. VMI stands for Vertically Managed Inventory b. 3PL stands for Third Party Logistics c. VMI stands for Vendor Manufactured Items d. 3PL stands for Three Point Logistics

B: 3PL stands for Third Party Logistics

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses: Quality (0.25), Responsiveness (0.10), Delivery (0.20), Cost (0.25), Technology (0.20). Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(90), Delivery(80), Cost(80), Technology(90). What is their total score? a. 87.0 b. 85.5 c. 86.0 d. 86.5

B: 85.5

Benchmarking is: a. A system of performance metrics that seeks to motivate suppliers to perform better. b. A practice where companies attempt to learn and apply the best practices of other companies. c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

B: A practice where companies attempt to learn and apply the best practices of other companies

What does the acronym CPFR represent? a. Coordinated planning and forecasting relationships b. Collaborative planning, forecasting, and replenishment c. Centralized purchasing and forecasting relationships d. Collaborative purchasing, forecasting, and receivables

B: Collaborative planning, forecasting, and replenishment

According to the textbook, collaborative relationships place a relatively lower importance rating on which of the following competitive priorities: a. Speed of Delivery b. Cost c. Product Quality d. Frequency of deliveries

B: Cost

Which of the following statements is FALSE? a. More than 50% of each sales dollar typically goes towards covering supply chain costs b. Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents c. Electronic procurement systems can aid a company in saving both time and money d. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing.

B: Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents

Which third party certification was adopted by the European Union in 1992 that has caused US suppliers wishing to stay competitive in European Union countries to get certified? a. ISO 14000 b. ISO 9000 c. European Supplier Certification Initiative (ESCI '92) d. EU Third Party Initiative

B: ISO 9000

According to the textbook, which of the following is NOT a way to closely match supply and demand? a. Holding high amounts of inventory b. Maintaining a rigid pricing system c. Utilizing overtime d. Hiring temporary workers

B: Maintaining a rigid pricing system

Which of the following statements is TRUE? a. Supply chain management was invented by the auto manufacturing industry b. Strategic partnerships are seen as one of the foundations of supply chain management c. Purchasing is seen as the final and most difficult step in the supply chain d. Service response logistics is the digital distribution of services

B: Strategic partnerships are seen as one of the foundations of supply chain management

The acronym SRM refers to: a. Supplier Requisition Monitoring b. Supplier Relationship Management c. Shipment Response Monitoring d. Supply chain Relationship Management

B: Supplier Relationship Management

According to the textbook, which of the following companies has established a goal of reducing energy costs and greenhouse gas emissions by 30 percent in their new stores by the end of 2010? a. Target b. Wal-Mart c. Home Depot d. Best Buy

B: Wal-Mart

The equation for a simple linear regression that saw sales averaging $225,000 over the last ten periods, and advertising budgets averaging $3,000 over the last 10 periods is: Y = 3250 + 120x This indicates that a $1 increase in advertising will increase sales by: a. $3370 b. $250 c. $120 d. $1875

C: $120

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses: Quality (0.30), Responsiveness (0.20), Delivery (0.20), Cost (0.20), Technology (0.10). Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(80), Delivery(80), Cost(90), Technology(90). What is their total score? a. 87.0 b. 85.5 c. 86.0 d. 84.0

C: 86.0

Which of the following would be considered a third party provider? a. A Raw materials supplier b. An intermediate component manufacturer c. A firm that leases storage warehousing d. An end product manufacturer

C: A firm that leases storage warehousing

Which of the following is the most accurate definition of a reverse auction? a. An auction where buyers attempt to outbid each other for the services of a supplier b. An auction where suppliers continuously attempt to guess the amount a buyer has established as the "buy price" c. An auction where a number of suppliers try to underbid their competition in hopes of gaining a buyer's contract d. An auction where competing buyers continuously bid lower and competing suppliers bid higher until 1 buyer and 1 supplier agree upon an acceptable price for both parties

C: An auction where a number of suppliers try to underbid their competition in hopes of gaining a buyer's contract

Benefits derived from implementing e-procurement systems include all of the following EXCEPT: a. Allows buyers to submit bids and suppliers to respond to those bids in real time b. Increases the accuracy in communication between buyers and suppliers c. Creates numerous additional job opportunities in the purchasing department d. Tracking bids and transactions is easier and faster

C: Creates numerous additional job opportunities in the purchasing department

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Classify supplier items as either innovative or functional b. Define the goals of the supply chain and check for consistency with products and firm strategy c. Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development d. Identify and evaluate the capabilities of suppliers and then identify areas which could be improved

C: Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: a. Supplier certification programs b. Manufacturer certification programs c. Early supplier involvement d. Total Cost of Ownership initiatives

C: Early supplier involvement

According to the EcoMarkets survey, which surveys over 6000 private and public buyers, the most popular aspect of green sourcing is: a. Recycling b. Material reuse c. Energy conservation d. Packaging reuse

C: Energy conservation

Which of the following is NOT a form of countertrade? a. Barter b. Offset c. Incoterming d. Counterpurchase

C: Incoterming

According to the textbook, which of the following companies utilizes a supplier development program called Supplier Continuous Quality Improvement (SQDI) focused on improving the quality of the goods and services purchased and minimize the time needed to inspect incoming products? a. Target b. Boeing c. Intel d. General Motors

C: Intel

Which of the following acronyms is NOT paired with its correct "translation?" a. TQM Total Quality Management b. JIT Just-in-Time c. MRP Manufacturing Responsiveness and Planning d. ERP Enterprise Resource Planning

C: MRP - Manufacturing Responsiveness and Planning

Direct benefits of ISO 14000 include: a. Reduced defect rates b. Improved on-time delivery rates c. Reduction of pollution emission d. All of these

C: Reduction of pollution emission

Which of the following is a reason that single sourcing is considered risky/bad? a. The buyer's required ordering quantities are very low b. Larger orders make quantity discounts more likely c. The limited (finite) capacity of one supplier d. Decreases the item to item quality variability of items purchased

C: The limited (finite) capacity of one supplier

Successful modern supply chain management typically includes the practice of: a. Keeping high inventories throughout the supply chain b. Always purchasing materials with the lowest per unit cost c. The sharing of information between supply chain partners d. Leadership through the practice of issuing ultimatums to your supply chain partners

C: The sharing of information between supply chain partners

Which type of requisition is used for materials and standard parts that are requested on a recurring basis? a. Open requisition b. Blanket requisition c. Traveling requisition d. Recyclable requisition (Cyc-Rec)

C: Traveling requisition

Which of the following is TRUE? a. VMI stands for Vertically Managed Inventory b. 3PL stands for Third Party Leverage c. VMI stands for Vendor-Managed Inventory d. 3PL stands for Three Point Logistics

C: VMI stands for Vendor-Managed Inventory

Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers? a. Lower levels of quality from their suppliers b. Lower levels of service from their suppliers c. Deteriorating buyer-supplier relationships d. All of these

D: All of these

SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these

D: All of these

Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria? a. Allows firm to screen out poor performing suppliers in its present supplier base. b. Allows firm to screen out undesirable suppliers that they may be considering for future purchases. c. Allows firm and its suppliers to develop a better corporate relationship d. All of these

D: All of these

Which of the following is an illustration of a company that has vertically integrated? a. A computer manufacturer that acquires its computer components supplier b. A computer manufacturer that acquires warehouses to aid in its product distribution c. A computer components supplier that begins to assemble computers for sale to consumers d. All of these

D: All of these

Which of the following is important in developing successful relationships in a partnership? a. Commitment by top management b. Interpersonal relationships between employees of the companies c. Mutual/compatible needs that result in a win-win situation for the partners d. All of these

D: All of these

A certain supply chain is made up of: 1. Raw Materials Supplier 2. Components Manufacturer 3. A firm that manufacturers Sub-assemblies 4. End Item Manufacturer 5. Wholesale Distributor 6. Local Retail Chain Warehouse Who is considered the End Item Manufacturer's second tier supplier? a. Raw Materials Supplier b. Wholesale Distributor c. The final end item consumer d. Components Manufacturer e. Local Retail Chain Warehouse

D: Components Manufacturer

Which of the following is TRUE? a. SRM software modules are very affordable (less than $50,000) and can be implemented with a week. b. ISO 75000 is the supplier award given to the highest rated supplier in Japan. c. The key to successful partnerships is developing performance measures with weights greater than 3.50. d. Continuous improvement and change management are both keys to building successful partnerships.

D: Continuous improvement and change management are both keys to building successful partnerships

Which of the following would most likely be considered a functional product? a. PDA Personal Digital Assistant b. HDTV High Definition Televisions c. DVD recorders d. Disposable Camera

D: Disposable Camera

According to the textbook, the Las Vegas division of Harrah's Entertainment utilizes which of the following purchasing structures? a. Autocratic b. Decentralized c. Centralized d. Hybrid (centralized-decentralized)

D: Hybrid (centralized-decentralized)

According to the textbook, which of the following companies utilizes the Crown of Excellence Supplier Recognition Program which motivates its suppliers to constantly improve and in turn strengthens the relationship between supplier and buyer? The program rewards advancements in quality, cost, security & technology, and delivery & service. a. Phillip Morris b. General Motors c. Tesco d. Motorola

D: Motorola

Which one of the following is not a type of qualitative forecasting? a. Sales force composite b. Consumer survey c. Jury of executive opinion d. Naïve method

D: Naive method

Which of the following documents is considered the buyer's offer to purchase products or services from a supplier, is legally binding once the supplier accepts it, and usually has the terms and conditions of purchase preprinted on the back of the document? a. Purchase requisition b. Planned order release c. Material requisition d. Purchase order

D: Purchase order

According to the textbook, Proctor and Gamble is developing capabilities in three areas to create value for retail customers and also drive growth for their company's businesses. These capabilities include: a. Purchasing, Processing, and Distribution b. Performance measurement, Communication, and Technology c. Low cost, High quality, and Fast delivery d. Reliable service, Agile demand-driven supply, and Affordable differentiation

D: Reliable service, Agile demand-driven supply, and Affordable differentiation

Which of the following illustrates Forward Integration? a. Microsoft starting a new division that designs and manufactures clothing b. Ford automotive buying additional machines for production c. Subway sandwich company buying a bakery to make the bread for their sandwiches. d. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

D: Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

The management of the firm's external resources through identification and selection of suppliers, management of supplier relationships, and monitoring and rewarding supplier performance in an effort to support the long-term goals of the organization is called: a. Buyer-supplier integration b. Acceptance sampling c. Procurement rationalization d. Strategic sourcing

D: Strategic sourcing

According to textbook, the top three challenges for CPFR implementation include all of the following except: a. Making organizational and procedural changes b. Trust between supply chain partners c. Cost d. Supplier lead times

D: Supplier lead times

As tighter control limits are instituted for the tracking signal, there is a greater probability of finding exceptions that require no action, but it also means catching changes in demand earlier.

True

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.

True

Blank check purchase orders, Corporate purchasing cards, Petty cash, and Open-end purchase orders are all possible alternatives to dealing with small value purchases such as those for office supplies.

True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs

True