SUPPLY CHAIN STUDY GUIDE

Which of the following is NOT one of the primary goals of Purchasing? A. Ensure the uninterrupted flow of materials and services at the lowest total cost B. Improve the quality of the finished goods produced C. Increase the supplier base D. Optimize customer satisfaction.

Increase the supplier base

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

false

An effective supplier certification program may increase the time spent on incoming inspections

false

What is the term that is often used for the acquisition of services? A. Purchasing B. Contracting C. Requisitioning D. Ordering

Contracting

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

Decreased need for supplier management

DMADV Methodology

Define, Measure, Analyze, Design, Verify: which is a data-driven quality strategy for designing products & processes. Used when the company wants to create a new product design or process that is more predictable and defect free.

DMAIC Methodology

Define, Measure, Analyze, Improve, Control: which is a data-driven quality strategy for improving products & processes. Used when the company wants to improve an existing business process. DMAIC is the most widely adopted and recognized Six Sigma methodology in use. It defines the steps a Six Sigma practitioner typically follows during a project.

The best supplier candidates for Supplier Relationship Management (SRM) include all of the following EXCEPT? A. Preferred Suppliers B. Suppliers that provide lesser quantities of a crucial products/services C. Developmental suppliers that need to make improvements D. Suppliers that provide high volumes of products or services

Developmental suppliers that need to make improvements

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

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

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

False (ethical sourcing practices)

Leverage sourcing is a comprehensive approach for locating and sourcing key suppliers which often includes the business process of analyzing the total-spend by material category.

False (strategic sourcing)

Which quality guru (i.e., expert) is credited with the concept that 'quality is free; defects are costly' A. W. Edwards Demming B. Joseph Juran C. Philip Crosby D. Shigeo Shingo

Philip Crosby

The process commonly utilized in continuous improvement is known as? A. Specific, Measurable, Achievable, Relevant, Time-Oriented (S.M.A.R.T.) B. Plan, Source, Make, Deliver C. Ready, Aim, Fire D. Plan, Do, Check, Act

Plan, Do, Check, Act

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as? A. Quality Systems Certification B. Supply Management C. Supplier Inspection D. Supplier Certification

Supplier Certification

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

VMI stands for Vendor-Managed Inventory

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

false

The keys to developing successful supply partnerships include all of the following EXCEPT? A. Personal Relationships B. Individualized Objectives C. Mutual Benefits and Needs D. Performance Metrics

individualized objectives

Duties, taxes, or customs imposed by the host country for imported or exported goods, are known as Tariffs

true

Outsourcing allows a firm to concentrate on core capabilities and reduce staffing levels

true

Pain and Gain Share contract provisions are associated with supplier rewards and recognition programs.

true

Segmentation is NOT an advantage of the e-Procurement processes

true

Successful supplier relationships involve equal decision-making control between both the buyer and the supplier.

true

The primary design objective of a LEAN layout is to reduce wasted movements of workers and/or materials.

true

Bottleneck

unique procurement problems. Supply risk is high and availability is low. Small number of alternative suppliers.

In the context of total manufacturing cost, procurement production warehousing each go down as volumes go up?

False

Which one of the following is NOT a quality tool of Six Sigma? A. Flow Diagrams B. Check Sheets C. Hysterical Charts D. Cause & Effect Diagrams

Hysterical Charts

The primary goal of purchasing includes all of the below except: a. Ensure uninterrupted flow of material in services at the lowest cost b. Develop as many quality suppliers for each material service c. Improve the quality of finished goods produce d. Optimize customer satisfaction

Develop as many quality suppliers for each material service

LEAN manufacturing emphasizes all of the following EXCEPT? A. Continuous improvement B. Large batch sizes C. Reduction of waste D. Synchronization of material flows

Large batch sizes

What company originated the concept of Six Sigma? A. Ford B. Motorola C. Toyota D. IBM

Motorola

The following term refers to an act that creates the greatest good for the greatest number of people? A. Rights and duties B. Corporate responsibility C. Utilitarianism

Utilitarianism

Which one of the following is among the most important elements of the LEAN manufacturing philosophy? A. Quality inspections and a standardized product line B. Fully automated assembly lines and a large supplier base C. Large inventories and large batch sizes D. Waste reduction and continuous improvement

Waste reduction and continuous improvement

To provide metrics that are easy to measure, understandable and focused on real-value-added results is the goal of

a good supplier evaluation system

What does Six Sigma consist of?

an enterprise and supply chain-wide philosophy that emphasizes a commitment toward excellence, encompassing suppliers, employees, and customers. Identification and reduction of defects (errors).

Operations Management is about

conversion

Processing costs for small value purchases can be minimized through the use of _____

corporate purchasing card, blanket purchase orders, blank checks

A Preferred Supplier is a supplier who has the lowest price

false

ISO 14000 is a widely accepted management and quality certification standard

false

Is the goal of six sigma the elimination of waste and minimizing the amount of all resources including time?

false

LEAN production 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.

false

The concept of Distributive Negotiations refers to both sides work together to maximize the outcome or create a win-win result.

false

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

false

Co-sourcing is the sharing of a process or function between two external providers

false (internal and external)

_______ refers to a company acquiring one or more of their sources of supply

forward vertical intergration

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

increasing the supplier base

One of the sustainable sourcing strategies is to build______

intangible assets

Which manufacturing process can be characterized as creating a custom product for each customer?

job shop

Is a purchase order legally binding once issued by the buyer?

no

Firms use the ____ strategy to reduce their own staffing levels.

outsourcing

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as? A. Ethical sourcing B. Functional sourcing C. Strategic sourcing D. Hybrid Sourcing

strategic sourcing

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

true

A Supplier Code of Conduct is intended to inform suppliers of ethical sourcing expectations and is typically a condition for becoming an approved supplier

true

Buying materials and components from suppliers instead of making them in-house, is known as outsourcing

true

7 tools of quality control

1. Check sheets 2. Histograms 3. Pareto analysis 4. Cause and effect diagram 5. Flow diagram 6. Control charts 7. Scatter Diagrams

Benefits derived from implementing an e-procurement system include all of the following EXCEPT: A. Time Savings B. Real Time Access C. Trackability D. Decentralizing Purchasing

Decentralizing purchasing

Which of the following would be a good reason to outsource (buy) versus make an item? 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 design and production of an end item D. No competent supplier presently produces the needed item

A firm lacks the technology or expertise to produce an item

The sourcing strategies including; maintaining safety and/or strategic stocks, developing contingency plans, strengthening relationships, and searching for alternatives, are appropriate for which item category? A. Non-Critical Items B. Bottleneck Items C. Leverage Items D. Strategic Items

Bottleneck items

Which Statistical Tool of Six Sigma is used to determine the frequency of a specific problems? A. Flow Diagram B. Pareto Chart C. Cause and Effect Diagrams D. Check Sheet

Check Sheet

All of the following are included in the eight wastes EXCEPT? A. Overproducing B. Extra-Processing C. Overspending D. Waiting

Overspending

Which of the following is NOT one of the "Seven Tools of Quality Control" A. Scatter Diagrams B. Histograms C. Small Batch Scheduling D. Control Charts

Small batching scheduling

The sum of all costs associated with every activity in the supply stream of a product, is referred to as? A. Total Cost of Acquisition B. Total Cost of Ownership C. Purchase Requisition Cost D. Total Procurement Cost

Total cost of ownership