Lab 5

Equipment, real estate, and construction are examples of capital acquisitions, but information technology is not. (True/False)

False

For non-repetitive requirements, a system or process of acquisition can be designed. (True/False)

False

MRO stands for Maintenance, Resale, and Operating Supplies. (True/False)

False

Packaging is an easy category to buy because it has few disposal, environmental, and transportation implications. (True/False)

False

The price of a semiprocessed material—steel sheets instead of ingots, frozen pork bellies instead of hogs, cocoa butter instead of beans—tends to move in the opposite direction of the price of the basic raw material. (True/False)

False, they always move in the same direction

Assets may be tangible or intangible (True/False)

True

Buying capital equipment differs from other types of purchases because determination of final cost includes estimates over the life of the equipment. (True/False)

True

Capital items can be depreciated, are often bought under a separate budgetary allocation, and may require special financing arrangements. (True/False)

True

New technology frequently permits an organization to gain competitive advantage on the bases of different products and services at significantly lower cost. (True/False)

True

Quality as a term covers both functionality: "Does it do the job we want done?" and conformance to specification: "Does it fit the specification agreed to?" (True/False)

True

Standardization:

means agreement on definite sizes, design, and quality.

An advantage of buying by performance specification over other specification methods is that it provides:

the opportunity for the potential supplier to establish innovative ways to make the most suitable product

The primary purpose of identifying the function of an item to be required is:

to assist in the determination of what represents acceptable value.

Early supply involvement can be accomplished by:

using cross-functional teams on new product development.

Supply chain risks include:

a. interruptions to the flow of goods or services. b. actions that lower the company's attractiveness to the investment community. c. lack of regulatory compliance. a, b, and c

A buyer may be compelled to purchase by specification when:

an opportunity exists to purchase identical requirements from several sources

Capital assets are long-term assets that:

have an ongoing effect on the organization's operations.

Description by brand:

may be a necessity because the manufacturing process is secret.

When a specification is widely known, commonly recognized and readily available to every buyer, it is called a:

standard specification

Supply's growing involvement in the acquisition of services may be explained by:

the high dollars spent on services and the opportunities to reduce costs