exam 2 sample questions
A purchase order is legally binding once it is officially issued by the buyer to the supplier
false
In-sourcing is defined as reverting to in-house production when external quality, delivery, and services do not meet expetations
true
In public purchasing for the government and non profit sector, bidders are generally required to furnish bonds as incentive to ensure that the successful bidder will fulfill the contact awarded. Which type of bond provides protection again 3rd party liens (i.e debts) not fulfilled by the bidder? bid bonds surety bonds performance bonds payment bonds
payment bonds
which one of the following is NOT a reason for buying or outsourcing? to achieve a cost savings due to insufficient capacity to make the item internally due to a lack (ie shortage) of procurement personnel to take advantage of better quality
due to a lack (ie shortage) of procurement personnel
the manufacturing strategy in which the product is designed engineered and built to specifications only after the order has been received is called what? It is used when products are unique and extensively customized for the specific needs of individual customers
engineer to order or ETO
Products with short product life cycles, volatile demand, high profit margins, and relatively little competition, are known as Innovative products
true
What is the sourcing strategy that involves commodity items where many alternatives of supply exist, supply risk is low, spend it high, and there are potential procurement savings?
leverage
Buying materials and components from suppliers instead of making them in-house, is known as? Outsourcing Offshoring Insourcing Selective sourcing
outsourcing
which manufacturing process can be characterized as creating a custom product for each customer? project process batch process line process continuous process
project process
a tender proposal or quotation submitted in response to a solicitation from a contracting authority is known as what?
bid
the operating philosophy that focuses on waste reduction and value enhancement is known as what?
LEAN
The e-procurement process has many advantages. Which one of those listed below is NOT one of these advantages? Mobility Segmentation Trackability Accuracy
Segmentation
when using a weighted criteria evaluation system with five or more categories, suppliers should be ranked based on their score in only the two highest weighted categories
false
an internal document that defines the need for goods and/or services. This document does not constitute a contractual relationship with any external party
purchase requisition
A high Return on Assets (ROA) is an indication that a company has a high level/value of assets compared to a low profit margin
False
Total Quality management (TQM) is an integrated organization effort to improve quality at every level. Which one the following is NOT part of TQM? management commitment customer segmentation continuous improvement customer focus
customer segmentation
the six sigma 5 step plan referred to as DMAIC stands for? detect, monitor, access, implement check determine, motivate, accept, investigate, conclude define, measure, analyze, improve, control defect, method, attribute, inspect, cause
define, measure, analyze, improve, control
Costs incurred in the process of finding or discovering defects including testing, evaluating, and inspecting quality is categorized as which of the following? prevention costs appraisal costs external failure costs internal failure costs
appraisal costs
Why might a company decide to outsource (i.e. buy) a product they currently make? because they want to protect their proprietary technology because they don't have the capacity in their internal factory to meet demand because they want to have better control of transportation and warehousing costs because they want to have better control of lead time
because they don't have the capacity in their internal factory to meet demand
which one of the following is NOT part of the right (8) wastes identified through LEAN manufacturing? non-utilized talent extra processing insufficient capacity overproduction
insufficient capacity
A strategic partnership with a supplier: is a commitment over an extended period to work together to the mutual benefit of both parties is a legal contract between a supplier and a buyer, binding them to certain financial obligations is the ultimate object of the end goal that a company should have with every supplier is a significant benefit to the buyer but may not be a significant benefit to the supplier
is a commitment over an extended period to work together to the mutual benefit of both parties
to make or process raw materials into a finished product, especially by means of a large scale industrial operation is called what?
manufacturing
which one of the following is NOT an element of lean manufacturing waste reduction inventory and set up time reduction small-batch scheduling mass customization
mass customization
the fastest or more immediate way that a purchasing person can directly impact the profit of their company is to: improve the delivery time to their suppliers improve the inventory turnover of the items they are buying improve the quality of the items they are buying obtain a price reduction on the items they are buying
obtain a price reduction on the items they are buying
The quality management philosophy that focuses on improving the overall quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes, is known as what?
six sigma
Which one of the following is NOT part of the seven (7) tools of quality control? pareto analysis Histograms Control charts Lean layouts
LEAN layouts
The purchasing tool described as detailed capabilities document used to determine a suppliers capability and interest in the production of a product or service (RFP)
True
Which of the following is the best description of a preferred supplier? a supplier who has the lowest price a supplier who provides the most product to your company a supplier who best meets your company's overall purchasing requirements a supplier who has high quality
a supplier who best meets your company's overall purchasing requirements
The application of ethical principles in business situations is known as?
business ethics
The primary goal of purchasing include all of the below, EXCEPT? ensure uninterrupted flows of materials and services at the lowest total cost Dvelop as many good quality suppliers as possible for each material or service Improve the quality of the finish good produced Optimize customer satisfaction
develop as many good quality suppliers as possible for each material or service
Forward vertical integration refers to a company acquiring one or more of their sources of supply
false
In a spend analysis purchases that involve items representing a low percentage of the firm's total spend and having very little supply risk, are categorized as leverage purchases
false
In the context of total cost manufacturing (TCM) procurement, production, inventory, warehousing, and transportation per unit costs each go down as volume goes up
false
Industrial buyers purchase raw materials and other components fro conversion into a finish product, but they do not purchase services or capital equipment
false
The process to evaluate a supplier's capabilities, and their capacity to supply a product or service to the buyer is known as supplier certification
false
sourcing sustainability is described as the ability to meet the current needs of the supply chain without costing the company any additional time or money
false
the goal of six sigma is the is the elimination of waste and the minimization of the amount of all resources (including time) used in the operation of a company
false
the term for a visual signal that authorizes production or the movement of materials to the next workstation is?. LEAN layouts Kanban continuous assembly kaizen
kanban
the process of pre-qualifying suppliers to enter a website and at a pre-designated time and date to try to underbid competitors is known as?
reverse auctions
If you understand the Total Cost of ownership (TCO) then you know: that the acquisition cost is almost always the largest portion of the total cost of ownership that it is better to own an item than to rent or lease and item that you need to consider all the related costs over the life of the product that you should always buy from the supplier with the lowest purchase price
that you need to consider all the related costs over the life of the product
which one of the following is NOT a reason to have a single supplier? - to establish a good relationship -To have less quality variability -To achieve transportation of economies -To spread the risk of a supply disruption
to spread the risk of a supply disruption
The practice of Supplier co-location involves a supplier's employee being embedded in a buyer's purchasing department to forecast demand, monitor inventory and place orders for the item(s) provided by the supplier
true
among other advantages, preferred suppliers are more likely to provide capacity for meeting unexpected demand, and also provide cost efficiency due to economies of scale
true
co-sourcing is the sharing of a process or function between internal staff and an external provider (i.e. a supplier)
true
ethical sourcing policies should include such things as reporting of supplier compliance to stakeholders, and detailing ethical sourcing expectations to suppliers
true
outsourcing creates an opportunity for the company that is outsourcing a product, to reduce their own staffing levels
true
strategic sourcing is a comprehensive approach for locating and sourcing key suppliers which often includes the business process of analyzing the total spend by material category
true
supply management is a newer term that encompasses all acquisition activities beyond the purchase transaction
true
the goal of a good supplier performance evaluation system is to provide metrics that are: understandable, easy to measure, and focused on real value added results understandable, quantitative, and focused on cost related results understandable, qualitative, and focused on performance related results understandable, quantitative, and focused on quality related results
understandable, easy to measure, and focused on real value added results
what is the term used in business to describe the in-depth process of capturing internal and external customer's stated and unstated expectations, preferences, likes, and dislikes
voice of customer (VOC)
