Operations Management Exam 2

Which of the following is not a foundational element of supply chain management? a) Operations b) Logistics c) Inventory d) Integration

c) Inventory

Blanket or open-end purchase orders are suitable for buying? a) Office supplies b) Computers c) Custom built components d) Heavy equipment

a) office supplies

Internal control is crucial to prevent abuse of purchasing funds.

True

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries

True

A pull system uses customer orders to forecast

False

Purchasing can be broadly classified into two categories: merchants and industrial buyers.

True

Successful supplier relationships involve equal decision-making control.

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 procedures for public procurement differ from the private sector.

True

Total cost of ownership is made up of all costs associated with the acquisition, use, and maintenance of a good or service.

True

80% of the effects come from 20% of the causes is referred to as the Benelli principle.

False

A SRM strategy refers to a situation wherein a supplier's employee is permanently housed in the purchasing department of the buyer's organization.

False

A pull system uses forecasting to determine how much product to produce

False

It is illegal for corporations to provide their suppliers appreciation banquets to award performance.

False

Real value of CPFR is sharing inventory with other firms

False

Transactional SRM, allows the company to analyze the complete supplier base.

False

Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception.

True

Cost savings is an advantage of using an e-procurement system.

True

Erratic Demand forecasts is referred to as the bullwhip effect

True

ISO 14000 benefits include reducing waste, pollution, and energy consumption.

True

Unless an organization has a firm grasp of the key issues surrounding supplier relationships, it cannot reap the benefits of such relationships.

True

Which of the following statements is FALSE? a) centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions b) electronic procurement systems can aid a company in saving both time and money c) more than 50% of each sales dollar typically goes towards covering supply chain costs d) if a firm lacks the technology to make a required component they will need to consider buying/outsourcing

a) centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions

Which of the following is NOT a reason firms are expanding their supply bases to include foreign suppliers? a) lower shipping rates due to lower tariffs b) lower product cost c) better product quality d) overseas supplier holding the patent to a product

a) lower shipping rates due to lower tariffs

Which of the following is a reason that single sourcing is considered risky/bad? a) there could be supplier interruptions due to political instability b) it could establish close relationships with the supplier c) larger orders make quantity discounts more likely d) decreases the item to item quality variability of items purchased

a) there could be supplier interruptions due to political instability

All of these are advantages of the e-procurement system EXCEPT: a) Accuracy b) Credibility c) Mobility d) Cost Savings

b) Credibility

Which of the following is NOT a key tenant of an SRM system? a) Automation b) Lean operations c) Visibility d) Integration

b) Lean operations

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

b) SRM

Which of the following would be a good reason to outsource (buy) versus making? a) to utilize existing capacity within a company's own firm b) a firm lacks the technology or expertise to produce an item c) to have more direct control over the design and production of an end item d) no competent supplier presently produces the needed item

b) a firm lacks the technology or expertise to produce an item

When an item is in short supply accompanied by rising prices, a firm might find it beneficial to: a) discontinue buying the product and focus more on cheaper products b) align itself with one of the suppliers to ensure a continued supply of the scarce item c) purchased the item from a manufacturer who cuts corners and provides a product below market price d) All of these

b) align itself with one of the suppliers to ensure a continued supply of the scarce item

Firms can use total cost analysis to: a) see how efficiently management is using its total assets to generate profits b) select the most cost-effective supplier c) show how many times a firm's inventory is utilized and replaced over an accounting period d) brainstorm and isolate the causes of a problem

b) select the most cost-effective supplier

The components of Time Series include: a) Trend Variation b) Time Variation c) A and D d) Random Variation

c) A and D

Which of the following is not a forecasting technique? a) Quantitative b) Time-series models c) CPFR d) Qualitative

c) CPFR

The weighted-Criteria Evaluation System does NOT include: a) Selecting key dimensions of performance b) Classify vendors based on a total score c) Choosing a supplier based on the lowest score d) Assigning different weights to different criteria

c) Choosing a supplier based on the lowest score

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

c) Traveling requisition

Supply chain management includes the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes: a) human resources and job design b) selling and marketing products c) coordination and collaboration with channel partners d) program evaluation and review techniques

c) coordination and collaboration with channel partners

According to the textbook, Supplier Recognition Programs: a) are generally not very effective b) are used by 90% of companies c) encourage suppliers to keep their performance high d) are difficult to implement

c) encourage suppliers to keep their performance high

Which of the following is not a qualitative forecasting technique? a) Delphi method b) Jury of Executive opinions c) Consumer survey d) Cause and Effect

d) Cause and Effect

The primary goals of purchasing include all EXCEPT: a) Secure materials at the lowest cost b) Maximize customer satisfaction c) Improve the quality of finished goods produced d) Ensure the highest quality raw materials are purchased

d) Ensure the highest quality raw materials are purchased

Which of the following is not a factor in CPFR? a) Cost b) Trust c) Internal change difficulty d) Forecasting

d) Forecasting

In general, European companies prefer suppliers: a) Who employ the most people b) Whose headquarters are in a developing country c) Who are in the United States d) Who have ISO 9001 certifications

d) Who have ISO 9001 certifications