Supply Chain Exam 2

A purchase order is legally binding once issued by the buyer.

false

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

Sourcing Sustainability is described as the ability to meet the current needs of the supply chain without costing the company any additional time or money.

false

Strategic Sourcing is the process of identifying a company that provides a needed good or service

false

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

false

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

false

What is the term that is often used for the acquisition of services?

Contracting

The primary goals of purchasing include all of the below, EXCEPT?

Ensure the uninterrupted flow of materials and services at the lowest total cost Develop as many good quality suppliers as possible for each material or service Optimize customer satisfaction Improve the quality of the finished goods produced Develop as many good quality suppliers as possible for each material or service

A high Return on Assets (ROA) is an indication that a company has a high level/value of assets compared to a low profit margin.

False

Backward Vertical Integration refers to a company acquiring one or more of their customer organizations.

False

Which one of the following is NOT a reason to have a single supplier?

To achieve transportation economies To spread the risk of a supply disruption (answer) To have less quality variability To establish a good relationship

"Supply Management" is a newer term that encompasses all acquisition activities beyond the simple purchase transaction.

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

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

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as?

strategic sourcing

Buying materials and components from suppliers instead of making them in your company-owned operations, is known as?

Outsourcing

An outsourcing program can result in all of the following positive outcomes, EXCEPT?

Reducing staffing levels Decreased need for supplier management (answer) Gains in manufacturing flexibility Cost reduction

The purchasing tool described as "A document used to solicit bids (i.e., price and delivery) from interested and qualified suppliers for goods or services that the organization needs to obtain", is known as?

Request for Quote

Which of the following new technologies can improve supplier selection and increase the effectiveness of supplier relationship management?

artificial intelligence

In which item category would the sourcing strategies of maintaining safety/strategic stocks, developing contingency plans, strengthening relationships, and searching for alternatives, be appropriate?

bottleneck items

Which of the following is NOT one of the keys to successful strategic partnerships?

building independent objectives

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

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as?

supplier certification

In which item category would the sourcing strategies of simplifying and streamlining the purchasing process, reducing the number of suppliers and simplifying the ordering process, and transferring the buying responsibility to users within the company, be appropriate?

non critical items

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

recognizing excellence Building long-term relationships Reducing time spent on incoming inspections Correct answer: Increasing the supplier base

Products with short product life cycles, volatile demand, high-profit margins, and relatively little competition, are known as Innovative Products.

true

The Weighted-Criteria Evaluation System is typically used to select a supplier or to evaluate the performance of a supplier?

true

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

uppliers that provide lesser quantities of a crucial products/services Suppliers that provide high volumes of products or services Correct answer: Developmental suppliers that need to make improvements Preferred Suppliers

A key supplier's activities to help the buyer's company reduce cost, improve quality and reduce new product development time beginning with the initial design phase, are known as?

value engineering