SJSU BUSS-141 Quiz 4 - Proc and Supply Mgmt

Third-party logistics service providers are carriers that always own assets (trucks, airplanes, railcars) and act as intermediaries between trading partners, for example, shippers and carriers.

False

Competitive bidding, in general, is the most efficient means of obtaining a fair price for items bought.

True

The bill of lading is the key document in the movement of goods.

True

Information regarding price trends cannot be easily obtained because most organizations are reluctant to share cost and price information.

False

Governments typically play no role in establishing prices or regulating how buyers and sellers are allowed to behave in agreeing on prices.

False

Transportation rates:

are established primarily through negotiation.

Economic, safety and environmental regulations have been eliminated for the most part for all modes of transportation.

False

Supply's role in logistics may include direct functional responsibility and acquisition of logistics services.

True

An exception to firm bidding allows the buyer and bidders the flexibility to clarify and define specifications and prices after the initial bids are received and then bidders submit best-and-final-offers (BAFOs) .

True

Canceling a contract for a technicality when market prices are falling is considered an unacceptable and unethical practice.

True

Two effective cost reduction strategies are partnering agreements with logistics services provider and long-term contracts.

True

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit, is commonly known as:

a fair price.

The cost approach to pricing:

means prices are set to cover direct costs, contribute to indirect, and attain profit.

A transportation strategy should include consideration of:

safety on the ground, in the air and on water environmental factors such pollution. alternative transport modes. Correct! Correct answer: all of the above

Costs incurred in the operation of a production plant or process, are called:

indirect costs.

Hedging is a way to:

try to minimize price and exchange risks.

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

establish a policy of firm bidding.

Assume you are the supply (or procurement) manager responsible for managing a bid process. Outline the key steps (not more than five) you would take to procure airfreight services from key logistics and transportation providers to satisfy your global airfreight needs. You should assume that the bid process is an annual exercise undertaken by the supply management team.

1. Bidders must be qualified to make the item in accordance with the buy's specifications, for example the place must be spacious enough to item size specification. 2. Bidders must be qualified to deliver it by the desired date. The customs and relevant regulations must be met when it is delivered by the desired date. 3. Bidders must be sufficiently reliable in other respect to warrant serious consideration as suppliers, make sure the backup plan for the damaged goods or loss of goods in case of there is an accident, or there is insurance 4. There are enough qualified bidders to ensure a competitive price, competition is good for supply management team to choose the best quote 5. No more bidders than necessary for competition, which means not too many bidders for too many quotes for the airfreight service from third party

With deregulation of the transportation industry and the development of intermodal service, the focus for the transport buyer is:

the carrier's ability to handle multiple parts of the logistics process.

Integrated carriers (truck-air) like UPS and Federal Express are able to capture a larger market share because they:

utilize their own aircraft. have extensive ground networks. have accurate, real-time tracking systems Correct answer: all of the above

The selection of the FOB point is important to the purchaser, for it determines:

who pays the carrier. when legal title to goods being shipped passes to the buyer. who is responsible for preparing and pursuing loss or damage claims. Correct answer: all of the above.