320 exam 1
d. Traveling Requisition
A pre-printed order form for purchasing materials and standard parts that are requested on a recurring basis is referred to as: a. Material Requisition b. Purchase Requisition c. Planned Order Release d. Traveling Requisition
a. 1200 units
Given the following make-buy information, what would be the break-even point? Make Buy Fixed Costs $7500 $1500 Variable Costs $4 $9 a. 1200 units b. 1708 units c. 690 units d. 460 units
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.
c. Every 5 years
The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier. How often to the give this award? a. Every year b. Every 6 months c. Every 5 years d. Every 10 years
b. Louisiana
The Uniform Commercial Code governs the purchase and sale of goods in the US except in the state of: a. Hawaii b. Louisiana c. Mississippi d. South Dakota
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.
b. Supplier Relationship Management
The acronym SRM refers to: a. Supplier Requisition Monitoring b. Supplier Relationship Management c. Shipment Response Monitoring d. Supply chain Relationship Management
a. Business ethics
The application of ethical principles to business situations can be referred to as: a. Business ethics b. Social responsibility c. Ethical Sourcing d. Strategic Sourcing
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.
false
The average annual Purchase spend as a percentage of sales has been declining over the years.
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.
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.
b. Total cost of ownership
The combination of the purchase price of a good and additional costs incurred before or after product delivery can be referred to as: a. Total cost of acquisition b. Total cost of ownership c. Purchase requisition cost d. Total procurement cost
true
The development of relationships with suppliers brings about changes that must be managed in order for a company to stay focused on their core businesses.
c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers
The following is an example of the bullwhip effect: a. Barkley's produces a defective product and thus realizes an excessive increase in consumer returns b. Barkley's products are so successful that it adds a new retailer for distribution c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers d. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain
a. Business Process Reengineering
The following supply chain concept was introduced in the 1990's in an attempt to reduce waste and increase performance: a. Business Process Reengineering b. Offshoring c. Vertical Integration d. Material Requirement Planning
c. Utilitarianism
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 d. Social sustainability
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
The goal of a proper purchasing system is to ensure the efficient transmission of information from the users to the purchasing personnel, and ultimately, to the suppliers.
a. Allow suppliers to bid for each purchase
The hybrid purchasing system, such as the one utilized by Harrah's, includes many benefits. In such a system the regional office preserves four fundamental purchasing rights. Which of the following is NOT one of those rights? a. Allow suppliers to bid for each purchase b. Select the supplier c. Use whichever pricing method is appropriate d. Monitor contacts with potential suppliers
true
The influence of corporate sourcing decisions interacts with internal design, production, finance, marketing, and accounting.
b. Reorder point
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
a. Request for Quotation
When a material is not available in the warehouse and there is no current supplier for the item, the buyer must identify a pool of suppliers and issue a: a. Request for Quotation b. Purchase Order c. Contract for Sale d. Sales Order
a. Cash, Accounts Receivable, and Inventory
When calculating Return on Investment, current assets include: a. Cash, Accounts Receivable, and Inventory b. Cash, Accounts Receivable, and Equipment c. Accounts Receivable, Equipment, and Real Estate d. Equipment, Buildings, and Real Estate
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.
true
When evaluating suppliers for supplier certification, personal visits may be made to the prospective supplier to observe operations first hand.
true
"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
According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during manufacturing.
false
According to the textbook, rapidly changing communication technology makes the development of global partnerships more difficult than in the past.
false
According to the textbook, retail stores are considered the focal firms in modern supply chains.
true
According to the textbook, supply chains include raw material suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors, and retailers.
b. Operations
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
true
Developing a collaborative negotiation infrastructure include four steps: building a preparation process, develop a negotiation database. Design a negotiation launch process, and institute a feedback mechanism.
c. Reduction of pollution emission
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
false
Effective supply chain management relies on competitive bidding, corporate privacy, and contracts based on short-term performance.
b. Supplier management
Encouraging or helping a firm's suppliers to perform in a desired fashion can be referred to as: a. Progressive procurement b. Supplier management c. Right-shoring d. Supply chain performance management
true
Evaluating supplier performance can help companies identify supplier strengths and weaknesses and improve supplier communication.
b. Post-transaction costs
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
true
Generally speaking, there are two approaches to deciding whether or not an action is ethical, utilitarianism and rights and duties.
d. 2750 units
Given the following make-buy information, what would be the break-even point? Make Buy Fixed Costs $15000 $1250 Variable Costs $5 $10 a. 917 units b. 2875 units c. 1083 units d. 2750 units
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.
true
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.
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
Interpersonal relationships are not necessarily relevant to supplier relationships.
b. Ratio of cost of goods sold over average inventory cost
Inventory Turnover can be calculated by: a. Ratio of average inventory cost over cost of goods sold b. Ratio of cost of goods sold over average inventory cost c. Ratio of inventory days in stock over average inventory cost d. Ratio of average inventory cost over inventory days in stock
b. Toyota
Lean production is typically associated with which of the following company's production systems? a. Proctor and Gamble b. Toyota c. Boeing d. Intel
c. Strategic sourcing
Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as: a. Ethical souring b. Functional sourcing c. Strategic sourcing d. Hybrid Sourcing
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
NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.
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.
true
Purchasing can be broadly classified into two categories: merchants and industrial buyers.
true
Purchasing departments can be seen as a primary designer and facilitator of important inward-and outward-facing sourcing policies.
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 logistics activities include the return of defective and damaged items to the manufacturer, and the recycling of used packaging.
b. Contraction activities within the supply chain
Right-shoring refers to: a. An expansion of the supply chain b. Contraction activities within the supply chain c. An increase in the responsiveness of the supply chain d. A decrease in the responsiveness of the supply chain
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
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.
b. SRM
Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as: a. CRM b. SRM c. ISO 9000 d. SCSS
a. Children under 13 shall not be employed
The Ethical Trading Initiative (ETI) does NOT include which of the following: a. Children under 13 shall not be employed b. Working hours are not excessive c. Regular employment is provided d. Freedom of association and the right to collective bargaining are respected
true
The acquisition of services is also known as contracting
c. Ethical Sourcing
The purchasing managers at Sunnydale Corporation decide to intentionally increase purchases from small, women-owned suppliers. This decision can be considered: a. Illegal b. Unethical c. Ethical Sourcing d. Utilitarianism
a. 1980's
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
true
The term Supply Management is used to describe responsibilities above and beyond those of traditional purchasing.
c. 6
The textbook outlined a Supply Chain Ethical and Sustainability Sourcing Strategy Framework. How many steps are in this framework? a. 3 b. 5 c. 6 d. 10
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
There is a clear line between purchasing activities and the supply management function.
c. Front sourcing
Variations of outsourcing include all of the following EXCEPT: (C; 114) a. Co-sourcing b. Selective sourcing c. Front sourcing d. Insourcing
true
according to the textbook, the keys to successful supply chain management include trust and honest, accurate communications between supply chain partners.
a. Raw Materials Supplier
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
b. 85.5
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
false
A purchase order is legally binding once issued by the buyer.
c. Legislation requiring corporate ethical and sustainable sourcing
All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT: a. Global population growth b. Increasing environmental awareness c. Legislation requiring corporate ethical and sustainable sourcing d. Declining worldwide levels of natural resources
false
An effective supplier certification program will increase time spent on incoming inspections.
d. Supplier Certification
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
b. Decreased need for supplier management
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
false
As companies outsource more and more parts, it becomes easier to achieve cost savings internally.
a. Pre-transaction costs
Costs associated with investigating alternative suppliers and investigating alternative delivery options can be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these
b. A practice where companies attempt to learn and apply the best practices of other companies.
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
d. Decentralized Purchasing
Benefits derived from implementing an e-procurement system include all EXCEPT: a. Time Savings b. Real Time Access c. Trackability d. Decentralized Purchasing
true
Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.
false
Companies that lack internal expertise in a specific functional area would likely consider insourcing.
D. Cost, Quality, Availability, Maintainability, and Reputation
Consumers buy products based on a combination of: A. Cost, Quality, Manufacturer, and Simplicity of Use B. Cost, Quality, and Availability C. Cost, Quality, Advertising, Store Preference, and Appearance D. Cost, Quality, Availability, Maintainability, and Reputation
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.
a. Supplier development
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
b. Vendor managed inventory
One of the most value enhancing activities performed by a supplier, for a key customer, which minimizes carrying costs and can avoid stockouts: a. Early supplier involvement scheduling b. Vendor managed inventory c. Strategic inventory planning d. Purchase spend reduction forecasting
false
Procurement credit cards can be used for small purchases excluding meals, lodging, and travel expenses.
C. The sharing of information between supply chain partners
Successful modern supply chain management typically includes the practice of: A. Keeping high inventories throughout 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
true
Successful supplier relationships involve equal decision-making control.
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.
c. SRM
Summers, Inc. needs to generate a list of good/services purchased per supplier. Which type software program can the manager consult to obtain the information? a. ISO 9000 b. ISO 14000 c. SRM d. SCSS
d. Logistics
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. Logistics
false
Trends in supply chain management include increasing inventory levels and considering the elimination of logistics intensive online retailing.
true
Trends in supply chain management include increasing supply chain responsiveness and considering the negative environmental impacts of supply chains.
true
Trucking companies, airfreight shipping companies, and information system providers can all be considered service providers to the supply chain.
a. Federal Acquisition Regulation
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
false
While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices.
false
A 4PL, commonly referred to as a lead logistics provider, is a trucking company that also provides tracking services.
d. Components Manufacturer
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
c. Company B: Quality(70), Delivery(90), Cost(80)
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.
d. All companies scored the same.
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.
c. 86.0
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
true
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.
c. Planned Order Release
A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as: a. Material Requisition b. Purchase Requisition c. Planned Order Release d. Traveling Requisition
true
A growing trend among firms that practice supply chain management is supplier development.
c. Energy conservation
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
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.
b. Individualized objectives
According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT: a. Personal relationships b. Individualized objectives c. Mutual benefits and needs d. Performance metrics
c. Requiring employees and vendors to sign non-disclosure agreements
According to the text, one of the most basic and successful approaches to protecting trade secrets is: a. Threat of litigation b. Working with law makers to increase fines and sentences for those that steal trade secrets c. Requiring employees and vendors to sign non-disclosure agreements d. Requiring employees and partners to get ISO 9000 certified
b. Purchasing, operations, logistics, integration
According to the text, the FOUR important elements of the supply chain are: a. Purchasing, manufacturing, transportation, retail stores b. Purchasing, operations, logistics, integration c. Purchasing, manufacturing, logistics, transportation d. Purchasing, operations, manufacturing, distribution
a. Understandable, easy to measure, focused on value-added results
According to the text, the goal of a good performance evaluation system is to provide metrics that are: a. Understandable, easy to measure, focused on value-added results b. Understandable, quantitative, focused of cost-related results c. Understandable, qualitative, focused on performance-related results d. Understandable, quantitative, focused on quality-related results
true
According to the textbook, 'integration' is one of the four supply chain elements.
false
According to the textbook, Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices.
true
According to the textbook, a supply chain's end customers are the only true source of income for all supply chain organizations.
b. Cost
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
D. Cooperation among firms
According to the textbook, conditions which must be present for successful supply chain management include: A.Vertical Integration B. Corporate contracts regarding performance expectations C. Short-term company focused performance D. Cooperation among firms
false
According to the textbook, environmental and social impacts are considered outside of supply chain management.
false
According to the textbook, in the 1950's and 1960's, mass production techniques focused on creating supplier partnerships, improving process design and flexibility, and improving product quality.
d. Hybrid (centralized-decentralized)
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)
false
According to the textbook, third-party logistics providers (3LPs) do not offer assistance with helping products clear customs.
c. Intel
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. Early supplier involvement
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
true
Benchmarking is the practice of copying what other businesses do best.
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.
c. Creates numerous additional job opportunities in the purchasing department
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. Increasing supplier base
Benefits of implementing an effective supplier certification program include all or the following EXCEPT: a. Building long-term relationships b. Reducing time spent on incoming inspections c. Increasing supplier base d. Recognizing excellence
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.
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.
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.
d. All of these
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
b. Supplier development
Harold's Fish Shop decides to reduce its purchases from poorly performing fish suppliers and focus future orders with suppliers that have been top-performing in the past. This is an example of: a. Supply base rationalization b. Supplier development c. Top-tier supplier selection d. Selective sourcing
true
ISO 14000 is a family of international standards for environmental management.
true
ISO9000 is a standardized program for certifying suppliers.
true
If a company is effectively focusing on its core competencies, its level of outsourcing is likely to increase.
b. Forward vertical integration
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
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.
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.
true
Improved quality is one benefit of using a lean production system.
false
In a TCO system, certification and training of suppliers would be considered post-transaction costs.
true
In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs.
a. Material requirements planning (MRP)
One operational method for controlling and managing inventory is the implementation of a software system which can be referred to as: a. Material requirements planning (MRP) b. Demand capacity tracking (DCT) c. Inventory sourcing (IS) d. Demand process reengineering (DPR)
false
One result of an effective supplier certification program is an increase in the supplier base.
d. Strategic sourcing
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
c. Profit-Leverage Effect
The measurement of the impact of change in purchase spend on a firm profit before taxes, assuming gross sales and other expenses remain unchanged, is referred to as: a. Break-Even Analysis b. Direct Offset c. Profit-Leverage Effect d. Leveraging Purchase Volume
false
The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.
b. Insourcing
The primary benefits of ____ include costs savings and freeing up time for purchasing staff to concentrate on the firm's core activities. a. eProcurement b. Insourcing c. The Ethical Trade initiative d. Six Sigma
b. Ensure the highest quality raw materials are purchased
The primary goals of purchasing include all EXCEPT: a. Secure materials at the lowest cost b. Ensure the highest quality raw materials are purchased c. Improve the quality of finished goods produced d. Maximize customer satisfaction
a. Pretransaction Cost
The process of certifying a new supplier is considered what type of major cost category? a. Pretransaction Cost b. Supplier-Development Cost c. Transaction Cost d. Turnover Cost
d. Global sustainability index
Wal-mart is the driving force behind a system of measurement intended to influence how products are made and purchased in the future. This system of measurement is the: a. Greenstream b. ISO 17000 c. Retail carbon footprint d. Global sustainability index
a. Select the key dimensions of performance based on what is important to the consumer
When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Select the key dimensions of performance based on what is important to the consumer b. The weights for all dimensions must sum to 1 c. Evaluate each of the performance measures on a rating between zero and one-hundred d. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score
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.
c. MRP - Manufacturing Responsiveness and Planning
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
d. ERP - Estimated Response Parameters
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. 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 can be classified as a 3PL? a. A company that offers warehousing services b. A company that offers transportation services c. A company that offers customs clearing services d. All of these
d. All of these
Which of the following can be used as a punishment for suppliers that perform poorly? a. Elimination of future business with the focal firm b. Downgrade the supplier's status c. Billback penalty d. All of these
d. Purchase order
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. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses
Which of the following illustrates Forward Vertical 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
b. VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items
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
c. Incoterming
Which of the following is NOT a form of countertrade? a. Barter b. Offset c. Incoterming d. Counterpurchase
c. Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development
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
b. Developing efficient processes that will remain unchanged for the duration of the partnership
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
d. Continuous improvement and change management are both keys to building successful partnerships.
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.
c. VMI stands for Vendor-Managed Inventory
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. The limited (finite) capacity of one supplier
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
A. recycling products and components
Which of the following is a reverse logistics activity: A. recycling products and components B. delivering finished goods to your customer C. developing a collaborative relationship with your supplier D. managing the quality of products
d. Both MRP and ERP
Which of the following is a system that aids in controlling inventory? a. MRP b. ERP c. AARP d. Both MRP and ERP
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
b. Six Sigma
Which of the following is strategy usually employed by lean organizations in an effort to ensure continued quality compliance among suppliers and with internal production facilities? a. MRP II b. Six Sigma c. 3PL d. CAPS
b. Decentralized purchasing means not having any purchasing departments and allowing all
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. Strategic partnerships are seen as one of the foundations of supply chain management
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
a. Business process reengineering
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. A firm lacks the technology or expertise to produce an item
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 design and production of an end item d. No competent supplier presently produces the needed item
c. A firm that leases storage warehousing
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
d. Disposable Camera
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
b. ISO 9000
Which third party certification was adopted by the European Union in 1992 that caused US suppliers wanting 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
c. Traveling requisition
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)
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.