Chang Final
If you earn $12/hr with probability 35%, $17/hr with probability 45%, and $20/hr with probability 20% what are your expected earnings per hour? a. $15.85 b. $16.42 c. $18.92 d. $13.27
$15.85
Which of the following is NOT a risk of buyback contracts? a. Results in a surplus inventory for supplier b. Requires the supplier to have an effective reverse logistics c. Buyer may have an incentive to push similar items that are not under buy-back d. Buybacks have a complicated supply chain to return products to the supplier
Buybacks have a complicated supply chain to return products to supplier
Forward buying a. applies to cases with a predictable seasonal patter b. Considers a combination of hand to mouth and forward strategies c. Is a policy for buying in advance of the time when the item is actually needed d. Is used when future availability of the product is not limited
Is a policy for buying in advance of the time when the item is actually needed
All of the following are barriers to global sourcing except a. Currency fluctuations b. Resistance to change c. Longer lead ties d. Labor required
Labor required
Which of the following is a characteristic of Pull Supply Chain Management? a. High Inventories b. Poor Communication c. Low Inventories d. Forecasting
Low inventories
The distributor and supplier are trying to ___ their own profits independently a. Create b. Maximize c. Limit d. Diminish
Maximize
Should TCO only be used for evaluating small purchases?
No
Which of the following is a scenario where you should not use forward buying? a. Price goes up b. No quantity discount offered c. Manufacturer offers a quantity discount over a short time period d. Future availability of the product is limited
No quantity discount offered
Which of the following is not one of the 6 steps for the spend analysis process? a. Cleanse the data b. Aggregate the data c. Find the number of suppliers by category d. None of the aboe
None of the above
___ is moving processes to a remote country (out of your own country) a. Outsourcing b. Offshoring c. Reshoring d. Free on board
Offshoring
In SWOT analysis of supply market, external factors refer to a. Strength and Weakness b. Opportunities and Threats c. Weakness and Threats d. Strength and Opportunities
Opportunities and Threats
Which of the following cost elements does not have to be paid for at the exact moment of the purchase? a. Warranty b. Installation c. Opportunity cost d. Cost of goods
Opportunity cost
True/ False: Speed and Responsiveness is an advantage of centralized purchasing
False
True/False: A company seeking to become more efficient than its competition would look to become less centralized
False
True/False: A spend analysis is a constant review of a firm's entire set of purchases
False
True/False: Assuming EOQ = 2000 units, placing an order for 2500 units would result in the fixed order cost exceeding the average holding cost
False
True/False: Center-led (hybrid) purchasing structure combines a decentralized approach for purchases common to several business units and centralized approach to unique requirements
False
True/False: Delivery date and receiving department info is closed for a blanket purchase order.
False
True/False: In a buy-back contract, the distributor takes all overstocking risk
False
True/False: Purchasing is much less than simply buying goods and services.
False
True/False: Suppliers prefer contracts with no buy-back agreement
False
True/False: The EOQ is always feasible.
False
True/False: The detection model is more effective and sustainable than the prevention model
False
True/False: When looking at a quantity discount with three different "tiers", you must only calculate EOQ or most feasible value once.
False
True/False: spend analysis is something that is done every day
False
What is a characteristic of a buy-back contract? a. Incentives for meeting target sales b. Full refund for limited number of unsold goods c. Buyer shares revenue with a supplier in return for discount wholesale price d. Partial refund for all unsold goods
Partial refund for all unsold goods
What is a characteristic of a buy-back contract? a. Partial refund for all unsold goods b. Buyer share revenue with supplier c. Full refund for unsold goods d. Provides incentives for meeting target sales
Partial refund for all unsold goods
Select the option that is NOT a supply chain flow A. Information Flow B. Product Flow C. People Flow D. Process Flow E. Cash Flow
People flow
Which is more effective and sustainable in quality management and control a. Prevention model b. Detection model
Prevention model
Which one of these costs is NOT associated with forward buying a. Warehouse storage expense b. The cost of tying up money in inventory c. Insurance cost d. Stockout costs
Stockout costs
What does "cleanse the data" mean in the steps of spend analysis? a. Create plots for your data to make sure that everything lines up b. Run a simulation to double-check the information you have gotten c. Find and correct errors in description, duplicate entries, etc. d. Check with the people that gathered all of the information and ask them if they think it is right
Find and correct errors in description, duplicate entries, etc.
When should hand to mouth purchasing not be used? a. Price goes down b. Emergency c. Getting goods using occasionally and not taken into stock d. Good used frequently that are taken into stock
Goods that are used frequently that are taken into stock
Which of the following falls under corporate level strategy? a. The chosen industry of business b. Improving product c. The medium of transporting goods d. None of the above
The chosen industry of business
What was the lesson learned for supply chains due to the Japan tsunami in 2011?
The size of the supply chain is underestimated, greater emphasis on risk management
The primary objective of supply base management and supplier development processes a. To have continuous improvement and growth of supplier capabilities b. To stop production of one supplier, but not the other c. To focus on process monitoring d. To reach both specification limits
To have continuous improvement and growth of supplier capabilities
What do we want to minimize? a. Total sourcing cost b. Units shipped out of the warehouses c. The cost of transportation d. Order size
Total sourcing cost
What company invented Just-in-Time supply scheduling in the 1970's?
Toyota
Which of the following is NOT an Inventory Related Cost? a. Holding Cost b. Order Cost c. Stock- Out Cost d. Transportation Cost
Transportation cost
Total sourcing cost= cost of gods + ___ a. Transportation costs b. Setup costs c. Storage costs d. All of the above
Transportation costs
True/False: A quantity discount is a financial incentive to encourage a buyer to purchase goods in multiple units or in large quantities
True
True/False: Breakpoints will give you the lowest total cost of ownership for a threshold if the EOQ is infeasible.
True
True/False: Contracts that encourage a distributor to purchase more and the supplier to take on more overstocking risk, lead to increases profit availability and supply chain profit
True
True/False: Demand at each warehouse must be met and supplier capacity cannot be exceeded
True
True/False: For a leverage product, competitive bidding should be promoted.
True
True/False: Functional strategy increases market share
True
True/False: Honest, straight forward, reliable, flexible, and comprehensive are the characteristics of an effective supplier selection
True
True/False: In a revenue-sharing contract, the buyer transfers a portion of the revenue from each unit sold to the end customer
True
True/False: Incoterms define at which point the ownership of products is transferred
True
True/False: Opportunity cost should be included in TCO Analysis?
True
True/False: Profits for both distributor and supplier tend to be higher using a buyback contract
True
True/False: Purchasing is a value added function and significant player in strategic cost management
True
True/False: Stratification method based on item's profitability is called Sales Method
True
True/False: The Chief Purchasing Officer has the authority for purchasing expenditures in Centralized purchasing structures
True
True/False: The distributor takes on all the risk in Supply Chain when ordering
True
True/False: The mixed buying strategy considers a combination of hand to mouth and forward strategies
True
True/False: When a buyer assumes all the cost and risks once the goods have been placed next to the vessel, the incoterm would be FAS
True
True/False: When computing the rank sum of a criterion, ri=1 indicates that criteria i is the most important
True
Blanket purchase orders: a)Used for recurring purchases b)Are a spot buy c)Are a Specialized Product d)Purchase Have closed delivery dates
Used for recurring purchases
All of the following are preferred for competitive bidding EXCEPT: a. Volume is low b. Marketplace is competitive c. No preferred supplier d. Clear specifications for the product
Volume is low
If the EOQ for a certain product is 5000 units but the minimum order size required by the supplier is 5100 units, should you still place the order? Why or why not?
Yes, because it is insensitive to small errors
(p-c)/(p-s) is the ____ ratio
critical
What are the four supply chain flows?
information, product, process, cash
What is holding cost?
the sum of all costs that are proportional to the amount of inventory physically on hand at any point in time
In order to reduce time to market, it is important to... a) Make your workers take less breaks b) Communicate with suppliers about requirements c) Lower COGS d) Increase overhead expenses
Communicate with suppliers about requirements
Which strategy gives the overall scope and direction of a corporation? a. Corporate Level Strategy b. Business Level Strategy c. Functional Level Strategy d. None of the above
Corporate level strategy
Using the rank sum method, which is considered least important? a. Quality (r=1) b. Cost (r=4) c. Technical capability (r=3) d. Delivery performance (r=2)
Cost (r=4)
What are the four core area of supplier quality management? a. Cost, technology, delivery, quality b. Cost, technology, revenue, quality c. Cost, profit, delivery, quality d. Cost revenue, profit, technology
Cost, technology, delivery, quality
A company uses a unique screw critical to a product manufacturing process that only a select few manufactures can make. What type of product is this? a) Leverage product b) Bottleneck product c) Routine d) Critical
Critical
Which product provides the most value and most supply risk? a. Bottleneck b. Routine c. Critical d. Leverage
Critical
Which equation determines the optimal order quantity for a buyback contract? a. (c-v)*Q-f b. critical ratio c. (c-v)*Q-f-b*E(# of unsold) d. none of the above
Critical ratio
What is not an advantage of Just in time Inventory a. Minimize inventory cost b. Collaboration between buyer and supplier c. Minimizes waste d. Guards against stock-out risks
Guards again stock-out risks
Which of the following describes a "push system"? a)Low Inventories b)High Inventories c)Waste reduction d)Better communication
High inventories
Which is not a drawback of Just-In-Time Inventory? a. Risk of running out of stock b. More planning required c. High inventory holding costs d. Not efficient system for dealing with the unexpected
High inventory holding costs
What was the major contribution to the shrimp population boom in Japan during 2011? Excessive Shrimp Breeding Human Carcasses Sushi Sanctions Kelp Infestation
Human carcasses
Which of these increases profits the least amount? a. Decrease COGS b. Increase Sales c. Decrease Overhead d. Increase Salesforce
Increase saleforce
Which of the following is not a purchasing objective? a. Develop Supply Base Management b. Manage the Purchasing Process Efficiently and Effectively c. Increasing your margins d. Support Organizational Goals and Objectives
Increasing your margins
The total cost of ownership is a trade-off between _____ and _____. a. Inventory Holding Cost, Price Discount b. Shipping cost, price discount c. Shipping cost, inventory holding cost d. Price discount, sell price
Inventory holding cost, price discount
What costs are associated with forward buying? a. Inventory holding costs b. Purchase costs c. End of life costs d. Stockout costs
Inventory holding costs
Find F(Q*) given price= 125, cost= 80, and salvage value= 20 F(Q*) >+ (p-c)/(p-s) a. 0.651 b. 0.5532 c. 0.4286 d. 0.89
0.4286
List the 6 major tasks of the purchasing process:
1. Identify user requirements 2. Evaluate potential suppliers 3. Competitive bidding or negotiation and supplier selection 4. Purchase approval 5. Release and receive product or service 6. Update supplier performance scorecard
How many outcomes are possible in the Prisoner's Dilemma? a. 2 b. 3 c. 4 d. infinite
4
When using hand to mouth strategy for Jan-June and the forward buying strategy for July-Dec, how many orders would you be placing for the year? a. 12 b. 7 c. 6 d. 1
7
A ___ is a periodic review, typically annually) of a firm's entire set of purchases a. Assumption b. Data aggregation c. Spend analysis d. Purchasing decision
Spend analysis
What is the point of a sourcing cost analysis? a. To reach the optimal sourcing plan b. To find the total cost c. A and B
A and B
What is mathematical optimization? a. A technique to find the solution with minimal cost b. A technique to find the solution for the best supplier c. A technique to find the solution with proper parameters d. A technique to find demand
A technique to find the solution with minimal cost
Which of the following include the stock out costs? a. Cost of emergency shipments b. Substitution to less profitable items c. Cost of customer loyalty loss d. All of the above
All of above
Hand to mouth buying is also known as a. Just in time buying b. zero stock buying c. All of the above d. none of the above
All of the above
Which is a main cost element in total cost of ownership? a. Cost of goods b. Acquisition costs c. Usage costs d. End of life costs e. All of the above
All of the above
Which of the following is a cost associated with Forward Buying? a. Warehouse storage expense b. Insurance cost c. The cost of tying up money that could be used elsewhere d. All of the above
All of the above
Which of the following is not a good time to use hand to mouth buying? a. When the price goes down b. During emergencies c. When you have limited working capital or storage space d. With perishable products e. All of the above
All of the above
All of the following are barriers to global sourcing EXCEPT: a. Lack of knowledge and skills concerning global sourcing b. Longer lead times c. Resistance to change d. Currency fluctuations e. All of the above are barriers to global sourcing
All of the above are barriers to global sourcing
Which is not a reason that suppliers offer quantity discounts? a. To compete with rivals who offer them b. To lock in customers c. To to allow sellers or manufacturers to reduce inventory by selling more units to incentivize buyers d. All of the above are reasons to offer quality discounts
All of the above are reasons to offer quality discounts
What is the most popular type of quantity discount? a. All units b. Incremental c. Individualized d. Bundled e. None of these choices are correct.
All units
What is the most popular type of quantity discount? a. All units b. Incremental c. Individualized d. Bundled e. None of these choices are correct.
All units
Why is spend analysis important?
Because you want to know how and what you are spending your money on
Which program did Campbell Soup utilize to increase the number of purchases? a. Spend and win program b. Bill and hold program c. Buy and wait program d. Refer and save program
Bill and hold program
You should use forward buying when a. the price of a product will go up b. the future availability of the product is not limited c. manufacturers offer discounts for a short period d. both A and B e. both A and C
Both A and C
___ measures, rates, or ranks ongoing supplier performance a. Report card b. Purchase requisition form c. Supplier performance management card d. Both A and C
Both A and C
Which of the following is an internal factor? a. Opportunities b. Strengths c. Weaknesses d. Threats e. Both b and c
Both b and c
Supply chain profit is the profit for ____ a. Distributors b. Suppliers c. Both distributors and suppliers d. Customers
Both distributors and suppliers
Referencing the Portfolio Analysis Matrix, low value products that are high in supply risk are referred to as: a. Routine b. Leverage c. Critical d. Bottleneck
Bottleneck
In optimization ___ are related to certain parameters (shipping costs and cost of goods) to calculate an objective function to be optimized (total sourcing cost) a. Dependent variables b. Independent variables c. Decision variables d. Constant variables
Decision variables
Is it easier to: a) Increase sales by 5% b) Decrease COGS by 8.3% c) Decrease overhead by 20% d) Have shrimp eat all of the dead bodies after the Japan Tsunami natural disaster e) Both increasing sales and decreasing COGS are equal
Decrease COGS by 8.3%
Hand to mouth is preferred when prices are: a. Increasing b. Decreasing c. Unchanging d. Unpredicatable
Decreasing
In a prisoner's dilemma, who takes all the risk and who takes no risk at all? a. Distributor, customer b. Customer, manufacturer c. Distributor, manufacturer d. Manufacturer, distributor
Distributor, manufacturer
Which of the following is NOT a constraint that needs to be put into excel? a. Every warehouse needs to be utilized b. Demand at each warehouse must be met c. Supplier capacity must be met d. Shipping quantities must be integers and non-negative
Every warehouse must be utlized
Which of these is not an important document for received purchase products? a. Material packing slip b. Bill of Lading c. Purchase requisition form d. Discrepancy report
Purchase requisition form
What is the average inventory of the product?
Q/2
Which type of contract allows distributors to receive a full refund for a limited number of unsold goods? a. Buyback b. Revenue-sharing c. Quantity flexibility d. Sales rebate
Quantity flexibility
Which type of contract is described by: "The supplier provides full refund for returned (unsold) items as long as the number of returns is no larger than a certain quantity" a. Buy-back contract b. Revenue sharing contract c. Sales rebate contract d. Quantity flexibility contract
Quantity flexibility contract
Which is not one of "The Five Rights" a. Right quality b. Right time c. Right price d. Right people e. Right quantity
Right people
Which one of these is not one of "the five rights"? a. Right Quality b. Right Quantity c. Right place d. Right price
Right place
What risk do you run utilizing "Just in Time '' inventory management strategy?
Run the risk of running out of stock
What 3 methods can be used in ABC analysis inventory stratification?
Sales method, GMROII method, Hits method
Why would a company want to used Push SCM over Pull SCM?
Seasonal demands
Which of the following is NOT an inventory related costs? a. Ordering cost b. Set up cost c. Holding cost d. Stock-out cost
Set up cost
Which of the following is NOT key supplier evaluation criteria? a. Cost structure b. Shipping speed c. Quality system and performance d. Process and technological capabilities
Shipping speed
The leverage effect of purchasing refers to: a) Increase safety stock requirements b) Small reduction on COGS that leads to significant improvement in profitability c) Large reductions in one area to reduce safety stock e) The effect of increased order variability within the supply chain
Small reduction on COGS that leads to significant improvement in profitability
Goals are ________ but objectives are ________. a. Specific; Broad b. Broad; Specific c. Internal; External d. External; Internal
Specific, broad
Which of the following is not an advantage of centralized purchasing a. Able to leverage purchase volumes b. Reduce duplication of purchases c. Development of specialized expertise d. Speed and responsiveness
Speed and responsiveness
Which of these is not included in TCO? a. Usage costs b. End of life costs c. Acquisition costs d.Strategic costs
Strategic costs
Which purchasing objective is most critical? a) Supply continuity b) Low prices c) Achieving the" five rights" d) Supporting organizational goals and objectives
Supply continuity
Which of the following is not true? a. Opportunity cost will impact a TCO model. b. TCO models should be used for evaluating all purchases. c. TCO calculates the present worth of total costs over an asset's life cycle. d. To compare suppliers, you should calculate TCO for each option.
TCO models should be used for evaluating all purchases