Sourcing Quiz #6

Fair Trade Product

manufacturing or grown by a disadvantage producer in a developing country that receives a fair price for their goods

Ethics

the standards by which behaviors are evaluated for their morality; their rightness or wrongness

Informational Power

where a person possesses needed or wanted info. Short-term power that doesn't necessarily influence or build credibility

Green Purchasing

aimed at ensuring products or materials meet environmental objectives (waste reduction, reuse, and recycling)

A supplier of a component part has offered Karen's family a free two-week cruise if his firm gets a very large order from Karen's company, this is an ethical issue related to: Select one: a. SUSTAINABILITY AND SOCIAL RESPONSIBILITY b. INFLUENCE c. CONFIDENTIAL AND PROPRIETARY INFORMATION d. IMPROPRIETY

b. INFLUENCE

A firm's suppliers can be certified based on ISO 9000 quality standards and ISO 14000 environmental standards. Select one: a. False b. True

b. True

In the firm fixed price contract, the price stated in the agreement does not change, regardless of fluctuations in general overall economic conditions, industry competition, levels of supply, market prices, or other environmental changes. Select one: a. False b. True

b. True

Most commonly used contracts are developed from earlier contracts that are subsequently modified to fit the situation at hand. Select one: a. False b. True

b. True

Overall reduction in material usage and disposal can be accomplished through engineering design changes and reuse and recycle programs. Select one: a. False b. True

b. True

Supply chain codes of conduct usually address standards for wages and rights of association. Select one: a. False b. True

b. True

BATNA

Best Alternative To a Negotiated Agreement

Sustainable Sourcing

a process of purchasing goods and services that takes into account the long-term impact on people, profits, and planet

Sustainability and Social Responsibility

champion social responsibility and sustainability practices in supply management.

Negotiation

a process of formal communication (email, face-to-face, etc.) where two or more people come together to seek mutual agreement about an issue or issues

Social Responsibility

a framework of measurable corporate policies and procedures and resulting behavior designed to benefit the workplace and, by extension, the individual, the organization and the community

Supply Chain Code of Conduct

a mechanism by which multinational companies established social and environmental guidelines for their suppliers

Contract Law

a sales contract is an agreement between a buyer and seller covering the sale and delivery of goods, securities, and other personal property

Code of Conduct

a set of rules that define acceptable and unacceptable behavior for organizations. Address environmental responsibility, human rights, wages, working conditions, etc.

Leading companies practicing sustainable sourcing seek to do the following EXCEPT: Select one: a. All of these are reasons why companies practice sustainable sourcing b. Reduce costs by increasing resource efficiencies, avoiding use of noncompliant suppliers, and rethinking transportation and distribution designs c. Manage risk by managing brand and reputation, and developing approaches for meeting regulations and for capturing socially and environmentally conscious customers d. Grow revenues by introducing new and differentiated sustainable products and services

a. All of these are reasons why companies practice sustainable sourcing

According to the ISM ethical standards, it is ethical for a purchasing team member to accept a gift, perhaps even a low-value item like a pen, from a supplier, as long as the team member is not influenced by the gift. Select one: a. False b. True

a. False

All buyer-supplier negotiations are relatively straightforward, only requiring rudimentary preparation and planning. Select one: a. False b. True

a. False

Cancellation by mutual consent indicates that the cancellation of a previously agreed-upon contract automatically leads to legal action. Select one: a. False b. True

a. False

Sustainability reflects only the importance of strategic environmental practices of an organization's suppliers but not the management of social responsibility in the supply base. Select one: a. False b. True

a. False

Which of the following is TRUE about negotiation? Select one: a. Negotiation is a process of formal communication, either face-to-face or via electronic means, where two or more people, groups, or organizations come together to seek mutual agreement about an issue or issues. b. Negotiating is the end game of the sales process. c. Negotiation is to be used only to get the absolutely lowest price from a supplier.

a. Negotiation is a process of formal communication, either face-to-face or via electronic means, where two or more people, groups, or organizations come together to seek mutual agreement about an issue or issues.

A contract can exist only when there is an agreement resulting from both an offer and an acceptance. Select one: a. True b. False

a. True

In a fixed price contract with escalation, all price changes should be keyed to a third-party price index, preferably to a well-established, widely published index. Select one: a. True b. False

a. True

Squeezing suppliers to generate a lower annual purchasing spend may lead to deteriorations in quality, ethical reputation, sustainability performance and customer service as suppliers seek ways to cut corners in order to keep their profit margins at desired levels. Select one: a. True b. False

a. True

The caveat to the best and final offer tactic is that the person making the best and final offer must be prepared to actually end the negotiation if the other party does not accept the offer. Select one: a. True b. False

a. True

A _____ contract should be used in cases where the parties cannot accurately predict labor or materials costs and quantities to be used prior to the execution of the purchase agreement. Select one: a. fixed-price with redetermination b. firm fixed price c. fixed-price with escalation

a. fixed-price with redetermination

_____ is a framework of measurable corporate policies and procedures and resulting behavior designed to benefit the workplace and, by extension, the individual, the organization, and the community. Select one: a. social responsibility b. ISO 9000:2008 c. supply chain risk management d. sustainability e. supplier development

a. social responsibility

Referent Power

ability of a leader to cultivate the respect and admiration of his followers in such a way that they wish to be like him

Coercive Power

ability of a manager to force an employee to follow an order by threatening the employee with punishment if the employee does not comply with the other

Sustainability

ability to meet current needs of the supply chain without hindering the ability to meet future needs in terms of economic, environmental, and social challenges

Ethical Sourcing

attempts to take into account the public consequences of organizational buying or bring about positive social change through organizational buying behavior

Influence

avoid behaviors or actions that may negatively influence, or appear to influence, supply management decisions

Reciprocity

avoid improper reciprocal agreements

For the effective negotiator, it is acceptable to give away any concession without getting something of equal or greater value in return. Select one: a. True b. False

b. False

If the terms of the buyer's purchase order and the supplier's acceptance or acknowledgement conflict, all of the terms of both the purchase order and the acceptance become part of the resulting contract including the conflicting terms and conditions. Select one: a. True b. False

b. False

Supply chain codes of conduct usually do not address standards health and safety conditions. Select one: a. True b. False

b. False

When the goods delivered by the supplier are actually rejected by the purchaser because of nonconformance, the purchaser must provide notice to the supplier within 24 hours. Select one: a. True b. False

b. False

All of the following are important factors to consider when negotiating with a supplier over contract type except _____. Select one: a. process or technology uncertainty b. physical distance between the buyer and supplier facilities c. degree of trust between buyer and seller d. component market uncertainty

b. physical distance between the buyer and supplier facilities

Which of the following is NOT one of the reasons that negotiators frequently fall short of their goals or reach an impasse? Select one: a. They neglect their BATNAs. b. They focus too much on price. c. They focus on interests rather than on positions.

c. They focus on interests rather than on positions.

According to the ISM ethical standards, if a corporate purchasing manager makes a decision that results in personal financial benefit while the company's owners lose financially, this is an ethical issue related to: Select one: a. SUSTAINABILITY AND SOCIAL RESPONSIBILITY b. IMPROPRIETY c. CONFIDENTIAL AND PROPRIETARY INFORMATION d. CONFLICT OF INTEREST

d. CONFLICT OF INTEREST

Which of the following is NOT a reason for choosing negotiating with suppliers over competitive bidding? Select one: a. The total contract value or volume is large. b. The purchase involves a special or collaborative relationship. c. The supplier will perform important or significant value-added activities. d. The purchase is for widely available, commodity-like goods. e. The purchase involves utilization of capital-intensive plant and equipment.

d. The purchase is for widely available, commodity-like goods.

The basis of _____ is the official job position or title that an individual holds, rather than the characteristics of the individual him/herself. Select one: a. expert power b. informational power c. referent power d. legitimate power e. coercive power

d. legitimate power

Professional Competence

develop skills, expand knowledge and conduct business that demonstrates competence and promotes the supply management profession.

A/An _____ is also known as the negotiator's bottom line or reservation point, that is, that point in the negotiation where it is most advantageous for the negotiator to walk away from the table and implement his or her next-best option. Select one: a. want b. need c. interest d. position e. BATNA

e. BATNA

_____ is defined as the ability to meet current needs without hindering the ability to meet the needs of future generations in terms of economic, environmental, and social challenges. Select one: a. Social responsibility b. Supply chain risk management c. Scenario analysis d. Standardization e. Sustainability

e. Sustainability

The negotiator's _____ is the unspoken motivation or reason that underlies any given negotiation position. Select one: a. bargaining zone b. want c. need d. BATNA e. interest

e. interest

Conflicts of Interest

ensure that any personal, business or other activity does not conflict with the lawful interests of your employer.

Applicable Laws, Regulations and Trade Agreements

know and obey the letter and spirit of laws, regulations and trade agreements applicable to supply management

Expert Power

power based upon employees' perception that a manager or some other member of an organization has a high level of knowledge or specialized set of skills that other employees or members of the organization do not possess

Reward Power

power of manager to give some type of reward in an employee as a means of influence the employee to act

Legitimate Power

power you derive from your formal position or office held in organization's hierarchy of authority

Impropriety

prevent the intent and appearance of unethical or compromising conduct in relationships, actions and communications

Supplier and Customer Relationships

promote positive supplier and customer relationships.

Confidential and Proprietary Information

protect confidential and proprietary information

Responsibilities to Your Employer

uphold fiduciary and other responsibilities using reasonable care and granted authority to deliver value to your employer.