Chapter 12

In selecting a vendor, a buyer may need to obtain competitive bids by means of a document called a purchase order.

False

Inventory personnel use the vendor master data to select an appropriate vendor.

False

Reorder point (ROP) analysis reorders inventory when the item reaches a certain inventory level that was determined in advance based on the item's purchase rate.

False

The inventory master data contains a record of each vendor that is approved for use by the organization.

False

The item number is the primary key for relational table for vendors.

False

The purchasing supervisor is responsible for receiving incoming goods, signing the bill of lading presented by the carrier, reporting the receipt of goods, and making prompt transfer of goods to the appropriate warehouse or department.

False

The warehouse master data contains a record of each inventory item which is stocked in the warehouse and/or regularly ordered from a vendor.

False

The warehouse number is the primary key for the relational table for inventory.

False

An employee has a conflict of interest when he (she) has a financial interest (direct or indirect) in a company with which the employer does business.

True

Collaborative processes across the supply chain using a set of processes and technology models are called Collaborative Planning, Forecasting, and Replenishment (CPFR).

True

Digital signatures allow the vendor to determine that the sender of the message has the authority to send it and thus prevents an unauthorized purchase.

True

E-procurement is the use of information technology to automate significant portions of the procurement process.

True

The connections from the suppliers of merchandise and raw materials through to an organization's customers, including the flow of information, materials, and services, are its supply chain.

True

The purchase order master data is a compilation of open POs and includes the status of each item on order.

True

The purchase receipts data is an event data store with each record reflecting a receipt of goods and services.

True

The purchase requisition is sent from the inventory control department to the purchasing department.

True

The purchasing manager usually performs major buying activities as well as the required administrative duties of running a department.

True

Which of the following is a technique for ranking items in a group based on the value, activity, sales, or other relevant metric for the items?

ABC analysis

A receiving report is to goods what a(n) ____ is to services.

Acceptance report

Which of the following managers is most likely to report to the controller?

Accounts payable department manager

Which of the following is a potential problem with supply chain management initiatives?

All the above (confused lines of responsibility, inaccurate data within the supply chain, over-reliance on demand forecasting)

Which of the following data stores would you least expect to see in the Purchasing Process - Level 0 Diagram?

Cash receipts event data

Which type of supply chain collaboration methods includes the vendor replenishing standard merchandise while the buyer manages the replenishment of promotion merchandise?

Co-managed inventory

Which type of supply chain collaboration methods includes the retailer and manufacturer forecasting demand and scheduling production jointly?

Collaborative Forecasting and Replenishment (CFAR)

Which type of supply chain collaboration methods includes collaborative processes across the supply chain using a set of processes and technology models?

Collaborative Planning, Forecasting and Replenishment (CPFR)

Which type of supply chain collaboration methods includes the vendor obtaining the buyer's current sales, demand, and inventory data in real time and replenishing the buyer's inventory?

Continuous Replenishment (CRP or Vendor Managed Inventory (VMI)

Which of the following is least likely to report directly to the vice president of logistics?

Controller

Issues related to the purchasing function, such as kickbacks, bribes, conflicts of interest, and the like are often addressed by ____.

Corporate codes of conduct

In the Purchasing Process - Level 0 Diagram, a data flow called "inventory's purchase requisition" most likely would be sent by the inventory management process to which of the following processes?

Determine requirements

Which of the following techniques analyzes all incremental costs associated with acquiring and carrying particular items of inventory?

EOQ models

The control plan compare vendors for favorable prices, terms, quality, and product availability is directed primarily at which of the following control goals?

Ensure effectiveness of operations

A receiving report is an external request for the purchase of goods or services from a vendor.

False

According to the context diagram for the purchasing process, when a purchase order is sent to the purchaser, the vendor responds by sending the goods along with a packing slip.

False

As used in the purchasing process chapter, the term "goods and services" refers to raw materials, merchandise, supplies, fixed assets, or intangible assets only.

False

Goal congruence exists when each individual manager's goals are achieved.

False

It is not uncommon for the copy of the PO available for the receiving department to be a carbon copy, meaning that certain data is blanked out.

False

Notifications that a PO has been prepared and sent to the vendor are sent to the receiving department, the accounts receivable process, and the department or process that requested the purchase.

False

The document used to record merchandise receipts is called a purchasing report.

False

When the data on the inventory record indicate a need to replenish the stock, the inventory system prepares a purchase order.

False

Which of the following process bubbles would you not expect to see in the Purchasing Process - Level 0 Diagram?

Make payment

Which of the following items is not a control plan of the purchasing process?

Minimizing inventory carrying costs

In an entity-relationship (E-R) diagram for the purchasing process, you would expect that the word yield would appear in the diamond showing the relationship between:

PURCHASE_ORDERS and PURCHASE_RECEIPTS

In an entity-relationship (E-R) diagram for the purchasing process, you would expect that the word generate would appear in the diamond showing the relationship between:

PURCHASE_REQUISITIONS and PURCHASE_ORDERS

At the time that a purchasing process places an order for goods or services, which of the following is typically updated?

Purchase order master data

The ____ is a compilation of open purchase orders and includes the status of each item on order.

Purchase order master data

Which of the following is not a cost element as part of the inventory carrying costs?

Purchase order preparation costs

The purchasing process is part of the ____ process for a merchandising firm.

Purchase-to-pay

Which of the following most likely would be "blinded" on a copy of the purchase order sent to the receiving department?

Quantities

Which of the following is not included in the SCOR model as one of the five basic components of supply chain management?

Receive

In the Purchasing Process - Level 0 Diagram, a data flow called "vendor packing slip" would most likely be sent by the vendor to which of the following processes?

Receive goods and services

The vendor packing slip triggers which process?

Receive goods and services

Which of the following is not a potential benefit of supply chain management?

Reduced customer orders

Which of the following techniques has the reorder point based on each inventory item's sales rate?

Reorder point analysis

Who usually authorizes a purchase requisition?

The supervisor of the requisitioning department

A paperless system would eliminate documents and forms as the medium for conducting business transactions.

True

A retailer could misread a demand signal doubling its normal order, and the wholesaler could respond and also double its order resulting in four times the retail order. This is an example of the bullwhip effect.

True

ABC analysis is a technique for ranking inventory items according to their relative importance.

True

After the vendor has been selected, the buyer prepares a purchase order.

True

EOQ is a technique of analyzing all incremental costs associated with acquiring and carrying particular items of inventory.

True

In many organizations professional buyers do the actual buying.

True

RFID tags are computer chips with an antenna that contains information about the object to which it is attached.

True

The business document that accompanies the purchased inventory from the vendor identifies the shipment and triggers the inventory receiving process is the vendor packing slip.

True

Whereas a receiving report normally indicates that goods have been received, some organizations use an acceptance report to acknowledge formally the satisfactory completion of a service contract.

True

With continuous replenishment (CRP) a vendor obtains a buyer's current sales, demand, and inventory data in real time and replenishes the buyer's inventory.

True

In a database containing (among others) six relationsVENDORS, PURCHASE_REQUISITIONS, PURCHASE_ORDERS, PURCHASE_RECEIPTS, INVENTORY, and EMPLOYEESyou would expect that the attribute Vend_No (vendor number) would be the primary key in the ____ relation.

VENDORS

The typical information flows in a purchasing process might include all of the following except:

a copy of a receiving report is sent to the cashier

In a purchasing process, receiving goods, but not a vendor invoice, from a supplier typically results in an update to all of the following data stores except the:

accounts payable master data

The resources for which the purchasing process wants to ensure security for which of the following:

both a and b (purchase order master data and inventory)

In a purchasing process, the receiving report may be accessed by all of the following except:

cashier

Inventory carrying costs include all of the following except:

clerical cost of ordering goods

In the process of preparing a receiving report, the receiving department should perform all of the following tasks except:

compare the vendor's packing slip to a copy of the purchase requisition

The purchasing manager is evaluated by his/her supervisors based on purchasing inventory at the lowest price. Consequently, the purchasing manager knowingly orders materials only based on price. This has resulted in the purchase of inferior quality materials. This improved the purchasing manager's performance evaluation, but had a negative impact on production due to an increase in scrapped materials. This situation is an example of a failure of:

goal congruence

Supply chain management:

helps to ensure delivery of goods and services to customers at the lowest costs while providing the highest value

Assume that one of the process bubbles in the Purchasing Process - Level 0 Diagram is called "order goods and services." The data flow between "order goods and services" and the "vendor" is called a:

purchase order

The document one business sends to another business that identifies the goods or services to be purchased is a:

purchase order

At the time that a purchasing orders goods and services, the process is likely to interact with all of the following data stores except the:

purchase receipts data

A "blind" copy of the purchase order should be sent to receiving so that:

receiving clerks will be forced to actually count the goods that are received

When large or expensive items are purchased, most organizations make use of a procedure to obtain competitive bids from multiple vendors. The document used to obtain competitive bids is called a(n):

request for quotation

A control that can ensure that receiving clerks are not influenced by quantity information while actually counting incoming goods is to:

send a "blind" copy of the purchase order to receiving

The typical purchasing process would capture and record data related to the day-to-day operations of all of the following except:

shipping

In a purchasing process, once requirements are determined and a vendor selected, the next step is:

the purchase order

Supply chain management (SCM) is the combination of processes and procedures used to ensure the delivery of goods and services to customers at the lowest cost while providing the highest value to the customers.

true

Outputs of a purchasing process normally might include all of the following except:

vendor invoice

Data about vendor compliance with the terms of the purchase order normally would be included in the:

vendor master data

The purchasing processreceive goods and servicesnormally would be triggered by the data flow:

vendor packing slip

Purchase orders are sent to:

vendors

As used in the text, the term services specifically refers to:

work performed by outside vendors