Marketing 333 Test 2

On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $150. If the inventory carrying cost is 20 percent per year and assuming no ordering costs:

buying 100 at a time will save the company $3,937.50 per year.

JIT requires:

frequent deliveries of relatively small quantities.

Public purchasers are required to award contracts to the lowest "responsible" and "responsive" bidder. This means the bidder is:

fully capable and willing to perform the work and submits a bid that conforms to the invitation for bid.

Buyers perceptions of risk in supplier selection decisions are:

generally the same for strategic and non-strategic items.

In the portfolio matrix, characteristics of goods and services in the bottleneck quadrant are:

item substitution and switching suppliers are difficult because few suppliers are available with the capability to meet the unique specification requirements.

If the decision has been made that a new requirement cannot be made inhouse and no existing supplier is adequate, then:

three options exists: search the marketplace for a new supplier, engage in reverse marketing, or redesign/respecify the requirement so that it is procurable.

The supplier selection decision:

can be depicted by a decision tree identifying options, evaluation criteria, and probabilities of success and failure.

When a supplier offers a lower price for a larger quantity, the buyer should:

determine the return on investment.

The cost approach to pricing:

means prices are set to cover direct costs, contribute to indirect, and attain a profit.

"C" items in ABC analysis are:

often managed by the supplier.

A material requirements planning (MRP) system:

requires explosion of the bill of material as the basis of planning.

A transportation strategy should include consideration of:

safety on the ground (in the air and on water), environmental factors such pollution, consolidation of freight, & alternative transport modes.

Large suppliers:

tend to have a strong financial base.

In FOB Origin:

the buyer gains title of the goods when the carrier signs at point of origin.

The following cost is not a carrying, holding, or possession cost:

the purchase cost of the item.

A cash discount of 1/15, N/30 (1 percent cash discount if payment is made in 15 days, with the gross amount due in 30 days) is the equivalent of what approximate interest rate?

24.

When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

decide if negotiation makes sense, establish negotiation points, & avoid setting unrealistic expectations.

The best type of inspection to use is:

dependent on the nature of the purchase.

CPFR stands for:

Collaborative Planning, Forecasting and Replenishment

When a carpet manufacturer predicts carpet sales by using building permits issued, mortgage rates, apartment vacancy rates, and so on, this is an example of:

a causal model.

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit, is commonly known as:

a market price.

Reverse marketing is:

an aggressive, purchaser-initiated approach to finding and developing world class suppliers.

In statistical process control (SPC), special or assignable causes of variation:

are outside, nonrandom problems such as breakdown of machinery, material variation, or human error.

All quality improvement programs are initiated by a desire to:

eliminate incoming inspection.

Activity based costing can be used by the buyer to:

eliminate nonvalue-adding activities; reduce activity occurrences, and reduce the cost driver rate.

Quality control in services is:

especially difficult if the service is highly intangible.

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

establish a policy of firm bidding.

Buyers typically prefer a:

firm-fixed-price (FFP) contract.

The zone of negotiation:

indicates the feasibility of negotiation and the likelihood of an agreement.

A supplier's references:

may be useful if they are of similar size and objectives as the buyer's organization.

ISO 9001:2008:

provides guidance for continuous improvement of quality management systems to achieve sustained customer satisfaction.

A sampling technique in which every element in the population has an equal chance of being selected is called:

random sampling.

In portfolio analysis, the goal when purchasing bottleneck items is:

reduce or eliminate customization.

The match between a commercially available material, good or service and the intended function is known as:

reliability.

An internal failure cost is:

scrap & rework costs.

When selecting freight carriers, buyers are most concerned with:

ability to deliver on-time with no damages.

Sustainability is the ability to:

achieve economic prosperity and a higher quality of life and protect natural systems.

Which of the following statements supports multiple sourcing:

concerns exist about supplier capacity for future volume.

A reduction in set-up costs and time impacts:

cycle inventories.

The characteristic of a service that has the greatest impact on the ability to define, measure and control service quality is:

degree of tangibility.

Intermodal transportation has increased due in large part to:

increased reliability from technological and operational improvements

Costs incurred in the operation of a production plant or process, are called:

indirect costs.

A third party logistics (3PL) services provider:

is a company that is separate from the buyer's and supplier's organizations.

Total quality management (TQM) tools include:

kaizen, continuous improvement, & quality function deployment (QFD).

In portfolio analysis, the goal when purchasing non-critical or routine spend is to:

minimize acquisition time and cost.

The Robinson-Patman Act basically requires that suppliers:

must sell the same item, in the same quantity, to all customers at the same price.

Capacity requirements planning (CRP):

performs for manufacturing resources what MRP does for materials.

Telecommunication routes are:

practically unlimited because there are few land or sea restraints to laying cable.

Items for which prices are comparatively stable and likely to be quoted on a list-price-less-discounts basis are called:

standard production items.

The learning curve is based on:

the commonly recognized principle that one becomes more proficient with experience.

A mode of transportation is:

the means by which people, freight or information gain mobility.

Anticipation inventories are carried:

to cover a well-defined future need.

The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called:

total cost of ownership.

Organizations operating under a just-in-time system, prefer to ship by:

truck.

Hedging is a way to:

try to minimize price and exchange risks.

Integrated carriers (truck-air) like UPS and Federal Express are able to capture a larger market share because they:

utilize their own aircraft, have extensive ground networks, & have accurate, real-time tracking systems.

When software is delivered to users by an application service provider (ASP) where the software is housed in one location from which multiple users access it, this is known as:

On-demand delivery.

Which tool will focus everyone in the organization on cost management:

target pricing.

The preferred hierarchy of environmental supply chain strategies is:

(1) source reduction, (2) reuse, (3) recycle, (4) incinerate, and (5) landfill.

Total cost of ownership (TCO) can be used to:

highlight cost reduction opportunities, compare suppliers in a supplier selection decision, prepare for a negotiation, & assess the reasonableness of a supplier's prices.