badm 324 final

A!supplier!certification!program:! ! a. adds cost to the supplier, but provides few benefits to the supplier. b. may enable the buyer and seller to lower costs and improve quality. c. may improve quality, but at best will not raise costs. d. always improves quality, but usually at a higher purchase price. e. typically cost more to implement than the value of the quality improvement.

B

Deming's 14 points stress the importance of: a. incoming inspection in quality assurance. b. top management in quality control. c. annual rating or merit systems. d. minimizing total cost with a single source. e. specialized education for high potential employees.

D

Capital assets: a. are not bought and sold in the regular course of business. b. have an expected use of less than one year. c. have little or no effect on the organization's operations. d. are generally expensed. e. are acquired for fairly small sums of money.

A

Closed-loop MRP: a. is a system which closes the loop between the supplier and the purchaser. b. provides a feedback loop between capacity and the master production schedule. c. requires a feedback loop between purchasing and accounting. d. requires a check between the master production schedule and inventory. e. allows a unit manager to sequence jobs done in that department.

A

If the delivery date is some months or years away and if there is substantial chance of price escalation, a supplier may feel that there is far too much risk of loss to agree to sell under a: a. firm-fixed-price (FFP). b. firm-fixed-price plus incentive fee (FFPIF). c. cost-no-fee (CNF). d. cost-plus-fixed-fee (CPFF). e. cost-plus-incentive-fee (CPIF)

A

In statistical process control (SPC), special or assignable causes of variation: a. are outside, nonrandom problems such as breakdown of machinery, material variation, or human error. b. are intrinsic to the process and will always be there unless the process is changed. c. have everything to do with the underlying process and can only be eliminated by changing the process. d. are of secondary importance in quality control procedures used to detect and eliminate variation. e. can be present in a process that is fully capable of meeting specifications consistently.

A

Poor internal compliance with the supply process: a. may indicate that internal customers do not trust the process or suppliers. b. indicates that staff in other functional areas are not qualified for their jobs. c. has nothing to do with the process itself. d. is caused by top management's failure to mandate compliance. e. has nothing to do with organizational structure.

A

As supply chains have become more global, the risk of supply disruptions has: a. increased because other countries lack the business ethics of the U.S. b. increased because of financial and exchange rate fluctuations. c. stayed the same because the issues are similar wherever suppliers are located. d. decreased because risk is spread among suppliers all over the world. e. decreased because there are global standards for labor and safety.

B

On average, the dollars spent with suppliers as a percent of revenues is: a. about equal in service organizations and manufacturing. b. greater in manufacturing than in service organizations. c. greater in service organizations than in manufacturing. d. depends on the type of manufacturing process. e. depends on the type of service.

B

One purpose of a requisition is: a. to request or requisition supplies from external suppliers. b. to clarify the description of need before communicating with potential suppliers. c. to give users a way to authorize buyers to acquire goods and services. d. to solicit price quotes for goods or services from suppliers. e. to give finance a way to have the final say in any decision to spend money.

B

Strategic planning can be defined as: a. how each functional area will achieve its specific goals and objectives. b. an action plan to achieve specific long-term goals and objectives. c. an action plan to achieve specific operational and tactical goals. d. a procedure for allocating resources to appropriate functions in the organization. e. taking big risks to maximize current period benefits.

B

Transportation rates: a. are lower for LTL than TL shipments. b. are established primarily through negotiation. c. are established primarily by government regulation. d. typically decrease as delivery speed increases. e. typically do not change when smaller shipments are consolidated.

B

An advantage of buying by performance or function over other specification methods is that it provides: a. an opportunity to purchase identical requirements from a number of different sources of supply. b. evidence that the buyer has carefully defined the need and how it may be satisfied. c. the opportunity for the potential supplier to establish how to make the most suitable product/service. d. a standard for measuring and checking materials as supplied. e. the potential for equitable competition by ensuring that the suppliers are quoting for exactly the same material or service.

C

Determination of the "best buy" is based on: a. suitability for a given use. b. a balance between price and quality. c. trade-offs among stakeholders (e.g., marketing, operations, and supply). d. technical considerations only. e. the internal user or specifier's perceptions.

C

Subcontracts can only occur: a. in government procurement. b. when a lead contractor is behind schedule. c. if there is a prime contractor bidding out part of a job. d. if substitution is required after the specification has been set. e. when purchasing a good, not a service.

C

A request for quotation that asks for a "brand or equal" a. is one way internal users ensure that they will get the brand they prefer. b. is the least risky and lowest cost approach to attaining "best value." c. requires the buyer to assume the costs of developing detailed specifications. d. shifts responsibility for establishing equality or superiority to the bidder. e. shifts responsibility for establishing equality or superiority to the specifier.

D

Anticipation inventories are carried: a. to stock the distribution pipelines. b. to permit activities on either side of a major process. c. to protect against machine breakdown. d. to cover a well-defined future need. e. to protect against uncertainties in supply and demand

D

Effectively and efficiently applying technology to the supply management process will: a. lead to increased clerical effort from additional data entry. b. lead to damaged buyer-supplier relationships from impersonal communication. c. inhibit negotiation planning because of time spent accessing and analyzing data. d. enable electronic funds transfer which lowers the total cost of doing business. e. decrease operating performance because of the volume of available information.

D

ISO 9001: 2008: A. dictating how quality requirements should be met in every organization. B.dictating scope and flexibility for quality system implementation. C.assuming all national cultures will meet quality requirements the same way. D.providing a set of standardized requirements a quality system must meet. E. assuming all business sectors will meet quality requirements the same way

D

Outsourcing of services is: a. decreasing in volume, but increasing in scope. b. decreasing in volume and scope. c. increasing in volume, but decreasing in scope. d. increasing in volume and scope. e. about the same in volume and scope over the last decade.

D

The payment process: a. should always be owned and managed by accounts payable. b. should always be owned and managed by supply. c. must include paper invoices to avoid legal liability. d. and the supply process should be aligned in policy and practice. e. has little impact on supply management.

D

Purchasing by specification typically occurs when: a. a high degree of supplier expertise is required and difficult to define. b. the internal user's preferences are impossible to overcome. c. the buyer wants the supplier to decide how to make the most suitable product. d. a supplier holds a needed patent. e. there are multiple sources for an identical requirement.

E

Supply management may indirectly contribute to the organization's competitive advantage by: a. reducing assets tied up in inventory. b. reducing annual spend. c. reducing prices paid to suppliers. d. increasing sales to customers. e. improving process efficiency

E

Which factors have a major influence on supply's level in the organization: a. the geographical location of the supply base. b. the nature of the products or services acquired. c. the extent to which supply and suppliers can provide competitive advantage. d. the ratio of purchased material and services costs to total costs or total income. e. the credentials of the existing supply personnel. a. a and b. b. b and c. c. c and d. d. a, c and d. e. b, c and d.

E

High-performing cross-functional supply teams: A) concentrate most of the work at the front-end of the process. B) concentrate most of the work at the back-end of the process. C) rely on a sequential process across functions. D) are useful for every type and dollar value of purchase. E) require close supervision by senior management.

a

Privatization is: A) the term for outsourcing used in the public sector. B) a term used in the private sector for a make decision. C) used interchangeably with outsourcing in both the public and private sectors. D) the term used when entire operations are outsourced. E) the term used when entire operations are insourced.

a

When developing strategies related to "how to buy," decisions must be made about: A) systems and procedures. B) make or buy. C) size of inventories. D) insource or outsource. E) level of quality.

a

Supply strategies that are based on changes in demand and supply are known as: A) risk-management strategies. B) assurance-of-supply strategies. C) cost-reduction strategies. D) environmental-change strategies. E) supply chain support strategies.

b

In the outsourcing decisions in many organizations, supply has had: A) a leadership role. B) extensive involvement. C) relatively moderate involvement. D) limited involvement E) virtually no involvement.

c

The degree of purchasing centralization is reflected by: A) the number of engineers with purchasing authority. B) the number of supply professionals dispersed throughout the organization. C) the percentage of spend managed or controlled by corporate supply. D) the percentage of spend managed or controlled by business units. E) the amount of spend that is outsourced.

c

The ratio of purchased material and services costs compared to total costs or total income has a major influence on: A) the nature of the products or services acquired. B) the size of the supply base. C) supply's reporting level in the organization D) the extent to which supply and suppliers can provide competitive advantage. E) the credentials of the existing supply personnel.

c

A change from a decentralized supply structure to a centralized one: A) is solely the decision of the existing chief supply officer. B) is easily done as long as the CEO mandates the change. C) requires a consensus among existing supply management professionals. D) typically requires experience and skills not present in the existing structure. E) seldom requires new information technology.

d

Outsourcing is: A) a low risk venture because global suppliers have almost unlimited capabilities. B) a low risk venture because the costs of reversing the decision are low. C) a moderate risk venture because it is easy to determine core competencies. D) a high risk venture because the decision makers' reputations are at stake. E) a high risk venture because the costs of reversing the decision are often high.

e