Chapter 13: Purchasing, Inventory, and quality Control
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the following are the sources that request the purchase of materials in small businesses
-People who observe that inventory is low -A system that automatically identifies the need for an item -operating manager that requests it -customer requests a given item -purchasing manager observes some special conditions that indicate the need to purchase an item
In the context of businesses, which of the following are the advantages of buying from a single source of supply? (Check all that apply.)
A single source of supply results in a more personalized relationship between suppliers and business owners. A single source of supply provides business owners with better services than multiple sources when shortages occur.
In the context of achieving effective quality control, which of the following steps should be taken by small businesses after establishing standards for the desired range of quality?
Actual performance should be measured.
the following kinds of inventories represent a major investment by all businesses?
Batches of products that are about to be processed or delivered Finished goods that are on display for sale to consumers
In the context of businesses, identify the best ways to carry inventories
By managing their movement By controlling their cost
Just-in-time (JIT)
Delivery is having materials delivered to the user at the time needed for production.
the following simplifies the purchasing procedure for a business and allows for long-range planning?
Establishing standing orders with suppliers
Assign responsibility for purchasing to one person by considering
Expected changes in prices expected changes in demand orders for specialty goods short supply of materials
In the context of businesses, identify the factors that are part of the quality of a service. (Check all that apply.)
Friendly greetings by salespersons Willingness to assist customers
Savio, the owner of a garment manufacturing business, aims to efficiently manage the inventory of his business. Which of the following operating plans should he implement to handle fluctuations in demands for his products? (Check all that apply.)
He should use special inducements to increase sales during periods of low demand. He should carry complementary products, such as winter and summer items.
Identify the operating plans that may be used by businesses to deal with seasonal variations in demand. (Check all that apply.)
Hiring temporary or part-time workers during peak periods Allowing operations to rise and decline according to the changing demands of sales Using self-service to cut down the number of employees
Esther, the owner of a small handmade jewelry store, is looking for suppliers who can provide her with high-quality gemstones. In this scenario, which of the following can be used by Esther as sources to obtain information on possible suppliers?
Internet and World Wide Web networks
true statement about inventory.
It detaches one segment of an operating procedure from another so each part can function at its optimum level.
In the context of small businesses, which of the following statements are true of Total Quality (TQ)? (Check all that apply.)
It has validated itself through the economic successes of the businesses that adopted it. It requires that the principles and practices involved in its functioning must be part of the entire business.
Identify a true statement about the method of radio-frequency identification (RFID).
It helps companies recognize, observe, and handle almost everything mobile.
Identify the true statements about supply chain management (SCM) in businesses. (Check all that apply.)
It integrates supply and demand between many businesses and within some of them. It involves coordinating the movement, storage, and all procedures, from beginning to end.
Identify a true statement about QR code.
It is used in warehousing, manufacturing, medical fields, retail sales, and in services and events.
Identify the forms in which inventories exist in small businesses. (Check all that apply.)
Miscellaneous items, such as tools stored in a toolroom Repair parts anticipating use Supplies for use in shops, stores, or offices
In the context of businesses, identify an advantage of buying from multiple suppliers.
Multiple suppliers offer a better variety of products and often better terms than a single source of supply.
What are the major objectives concerned with purchasing that the purchasing procedure of a business should accomplish? (Check all that apply.)
Obtaining proper materials, parts, goods, and so forth required to produce the goods or services Ensuring that the total price paid for the items purchased is satisfactory for sale of a finished product
Identify the factors that are picked up by rating systems while evaluating supplier performance in businesses. (Check all that apply.)
Reliability Service Quality
Martha is the owner of a small gift shop. She buys products from multiple suppliers across her locality. Which of the following steps can be taken by Martha to evaluate the performance of her suppliers?
She should develop a rating system of her own.
Identify the factors for which the potential supply sources of a business should be checked. (Check all that apply.)
Terms of payment Guarantees and warranties Desire to serve Quality of output
the following factors has revolutionized the purchasing procedure and inventory operations of small businesses?
The advances in electronic processing of information
Identify the components of the costs of carrying inventory in a small business. (Check all that apply.)
The costs related to insurance and taxes The cost of providing and maintaining storage space tied up inventory theft/destruction obsolescence and deterioration of the items.
Identify a factor on which the level of the inventory of retail stores depends at any given time.
The quantity of products purchased and kept in inventory
he following statements are true of quality circles (QCs) of businesses?
Their members receive training in areas such as communications, problem identification, and problem solving.
In the context of small businesses, identify a true statement about suppliers.
They should be selected to meet cautiously set quality and service standards.
In the context of the 80-20 rule, which of the following should be done by businesses having multiple products, parts, and services?
They should focus more on those products that have the greatest impact on costs and income.
the following can be used to find the right supplier for a business? (Check all that apply.)
Trade shows Newspapers yellow pages internet and world wide web networks trade journals
In order to achieve quality during the production of a product, which of the following must be followed by businesses? (Check all that apply.)
Workers or employees must be trained to produce a certain level of quality. Equipment must be capable of manufacturing a product within set tolerances.
supply chain
an integrated-coordinated system of activities to transform raw materials into finished products delivered to the end consumer
80-20 rule
approximately 80 percent of a company's income usually comes from 20 percent of its products.
Bar codes
are derived from a language called symbologies and used for specific identification of the objects
fully integrated production networks
are entire geographic regions where a fully integrated supply chain, from raw materials to finished products, is built up
stockouts
are sales lost because an item is not in stock.
quality circles
are small work groups meeting periodically to find ways to improve quality and performance
Purchasing
determines the company's needs and then finds, orders, and assures delivery of those items
To establish an effective purchasing procedure, businesses should _____.
establish an inventory control system
In small businesses, the first step to achieve effective quality control is _____.
establishing benchmarks for the desired quality range
True or false: If a service is needed from a business, a purchase requisition usually comes from a marketing manager.
false. If a service is needed from a business, a purchase requisition usually comes from the user of that service, as when an accounting manager requests an outside audit, a personnel manager needs to install or change an insurance program, or a marketing manager needs to place an ad with an agency.
True or false: The application of Total Quality (TQ) known as Total Quality Management (TQM) is used in manufacturing but not in services.
false. In small businesses, Total Quality Management (TQM) is used not only in manufacturing, but also in services.
scheduling
involves setting the times and sequences needed to perform specialized activities, including when an dhow long it takes to do them.
Inventory
is a formal list of all the property of a business, or the property so listed
Economic order quantity (EOQ)
is the quantity to purchase that balances the cost of placing the order with the cost of carrying the inventory
Radio-frequency identification (RFID)
method of specific identification transponders that contain information and can be read from several meters distance
supply chain management (SCM)
process of planning, organizing, directing, and controlling a supply chain from origin to consumption
Obtaining all items, including goods and services, in the proper form, quantity, and quality, and at the proper place, time, and cost, is the main objective of _____.
purchasing
Supplier-base downsizing
reducing the number of suppliers to concentrate purchasing
quality
refers to product characteristics and/or the probability of meeting established standards
standing orders
set predetermined times to ship given quantities of needed items, at a set price.
purchase order
tells the supplier to ship you a given amount of an item at a given quality and price
QR CODE
the trademark for a type of matrix barcode
In small businesses, quality-level analysis of a product is based on _____.
the value of quality to a customer
In order to achieve quality, a business that provides a particular service must _____.
train its employees to understand a customer's needs
