MKT 411 Test 1

What type of major cost category is considered in the cost associated with placing and receiving the order? a. Turnover Cost b. Transaction Cost c. Supplier-Development Cost d. Pre-transaction Cost

b. Transaction Cost

A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as: a. Win-win negotiations b. DMAIC improvement cycle c. Distributive negotiations d. Optimal review period

a. Win-win negotiations

Which of the following can happen as a result of the bullwhip effect? a. Quicker distribution to warehouses b. Decreased levels of safety stock c. Increase in defective products d. Excess costs for each firm in a supply chain

d. Excess costs for each firm in a supply chain

Petty cash is being phased out in favor of: a. P-card b. A blank check c. Score-carding d. Hard cash

a. P-card

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about: a. 10% of their time on expediting orders b. 30% of their time on expediting orders c. 20% of their time on expediting orders d. None of these choices are correct

a. 10% of their time on expediting orders

A reason for making items instead of buying them would include better quality control. a. True b. False

a. True

Which of the following is NOT a form of countertrade? a. Offset b. Counterpurchase c. Barter d. Kaizen blitz

d. Kaizen blitz

Lean production is typically associated with which of the following company's production systems? a. Toyota b. Kraft c. Proctor and Gamble d. Samsung

a. Toyota

Blanket or open-end purchase orders are suitable for buying a. Computers b. Custom built components c. Office supplies d. Heavy equipment

c. Office supplies

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as: a. Supply Management b. Supplier Inspection c. Quality Systems Certification d. Supplier Certification

d. Supplier Certification

Which of the following activities allows buyers to assume the supplier will meet certain product quality and service requirements? a. Distribution network b. Business process reengineering c. Right-shoring d. Supplier certification

d. Supplier certification

An internal or external event that causes a disruption or failure of supply chain operations is an example of a. Back-shoring b. Bull-whip effect c. Six Sigma quality management d. Supply chain risk

d. Supply chain risk

Which of the following terms refers to an act that creates the greatest good for the greatest number of people: a. Corporate responsibility b. Social sustainability c. Rights and duties d. Utilitarianism

d. Utilitarianism

In general, European companies prefer suppliers: a. Who employ the most people b. Who are in the United States c. Whose headquarters are in a developing county d. Who have ISO 9001 certifications

d. Who have ISO 9001 certifications

Given the following make-buy information, what would be the break-even point?Make OptionBuy OptionFixed Costs$5,500$1,500Variable Costs$4$9 a. 800 units b. 460 units c. 1,708 units d. 1,200 units

a. 800 units

Which of the following activities would fall under the foundational element of operation? a. Demand management b. Distribution network c. Supplier management d. Third-party logistics services

a. Demand management

Which of the following is NOT a key tenant of an SRM system? a. Lean operations b. Automation c. Visibility d. Integration

a. Lean operations

Which of the following acronyms is NOT paired with its correct "translation?" a. TLS - Third-party Logistics Services b. TQM - Total Quality Management c. ERP - Enterprise Resource Planning d. JIT - Just-in-Time

a. TLS - Third-party Logistics Services

One standard which is measured in environmental supplier certification is: a. The suppliers' recycled content b. The number of on-time deliveries c. The number of trucks owned by the supplier d. Technology investment by the supplier

a. The suppliers' recycled content

Automating procurement activities can lead to significant cost savings as buyers move toward managing processes by exception. a. True b. False

a. True

Criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments. a. True b. False

a. True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs. a. True b. False

a. True

According to the text, the goal of a good performance evaluation system is to provide metrics that are: a. Understandable, easy to measure, focused on value-added results b. Understandable, quantitative, focused on quality-related results c. Understandable, quantitative, focused of cost-related results d. Understandable, qualitative, focused on short-term results Hide Feedback

a. Understandable, easy to measure, focused on value-added results

______________ considers the public consequences of organizational buying. a. Benchmarking b. Ethical sourcing c. The bullwhip effect d. Vendor managed inventory

b. Ethical sourcing

It is illegal for corporations to provide their suppliers appreciation banquets to award performance. a. True b. False

b. False

Trends in supply chain management include expansion of the supply chain and decreasing supply chain visibility. a. True b. False

b. False

Sustainability reporting is ______________ for American companies: a. Required every 3 years b. Largely a voluntary effort c. Required in the U.S. d. Mandated quarterly

b. Largely a voluntary effort

Which of the following is TRUE? a. SRM software modules are very affordable (less than $50,000) and can be implemented with a week. b. Performance metrics and personal business relationships are both keys to building successful partnerships. c. ISO 75000 is the supplier award given to the highest rated supplier in Japan. d. The key to successful partnerships is developing performance measures with weights greater than 3.50. Hide Feedback Correct

b. Performance metrics and personal business relationships are both keys to building successful partnerships.

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as: a. ISO 9000 b. SRM c. CRM d. SCSS

b. SRM

The following strategy is usually employed by lean organizations in an effort to ensure continued quality compliance among suppliers and with internal production facilities: a. CAPS b. Six Sigma c. 3PL d. MRP II

b. Six Sigma

ISO 14000 may play a role in a firm's. a. Manufacturing flexibility program b. Supplier certification program c. Negotiated pricing program d. Customer certification program

b. Supplier certification program

The use of environmental supplier certification programs assists companies by which of the following? a. Identifying companies who are the most popular with consumers b. Helping communities who are in jeopardy of plant closures c. Identifying strategic alliance candidates d. All of these choices are correct.

c. Identifying strategic alliance candidates

When using a Weighted Criteria Evaluation System to evaluate suppliers, all of the following are true EXCEPT: a. Evaluate each of the performance measures on a rating between zero and one-hundred b. Multiply the dimension ratings by their respective important weights and then sum to get an overall weighted score c. Select the key dimensions of performance based on what is important to the end consumer d. The weights for all dimensions must sum to 1 or 100%

c. Select the key dimensions of performance based on what is important to the end consumer

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT: a. Personal relationships b. Mutual benefits and needs c. Performance metrics d. Individualized objectives

d. Individualized objectives

Total Cost of Ownership does NOT consider which of the following factors? a. Tooling costs b. Freight costs c. Payment terms d. Purchase order costs

d. Purchase order costs

_______ refers to one that is manufactured or grown by a disadvantaged producer in a developing country that receives for its goods. a. A fair trade product b. Bitcoin c. An imported product d. Freedom of association

a. A fair trade product

A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses:Quality (0.25)Responsiveness (0.10)Delivery (0.15)Cost (0.15)Technology (0.30)Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(90), Delivery(80), Cost(80), Technology(85). What is its total score? a. 81.0 b. 84.5 c. 82.5 d. 83.0

a. 81.0

Which of the following would be a good reason to outsource (buy) versus making? a. A firm lacks the technology or expertise to produce an item b. To have more direct control over the design and production of an end item c. To utilize existing capacity within a company's own firm d. No competent supplier presently produces the needed item

a. A firm lacks the technology or expertise to produce an item

When a particular item is in short supply accompanied by rising prices, a firm might find it beneficial to: a. Align itself with one of the suppliers to ensure a continued supply of the scarce item. b. Purchase the item from a manufacturer who cuts corners and provides a product below market price. c. Discontinue buying the product and focus more on cheaper products. d. All of these choices are correct.

a. Align itself with one of the suppliers to ensure a continued supply of the scarce item.

Which company is experimenting with the management of the final mile of delivery in some markets, using small aerial drones to deliver shoebox-size packages from fulfillment centers? a. Amazon b. Zappos c. FedEx d. UPS

a. Amazon

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Certify suppliers as ISO 9001 compliant b. Establish corporate ethical and sustainable sourcing policies c. Develop a performance measurement system d. Prioritize items based on ethical and sustainability opportunities and ease of implementation

a. Certify suppliers as ISO 9001 compliant

While most public procurement is focused on goals like those of purchasing departments in the private sector, U.S. federal government purchases must comply with the: a. Federal Acquisition Regulation b. Federal Code of Conduct for Procurement c. Fair Standards and Equitable Purchases Act d. Services and Materials Acquisition Act

a. Federal Acquisition Regulation

When a product is purchased which is complicated or highly technical a ______________may be issued instead of a request for quotation. a. Request for proposal b. Sales order c. Contract for sale d. Purchase order

a. Request for proposal

Firms can use total cost analysis to: a. Select the most cost-effective supplier b. Show how many times a firm's inventory is utilized and replaced over an accounting period c. See how efficiently management is using its total assets to generate profits d. Brainstorm and isolate the causes of a problem

a. Select the most cost-effective supplier

The total cost of ownership for Supplier A is $2,670,000. The total cost of ownership for Supplier B is $1,750,000. The total cost of ownership for Supplier C is $2,990,000. Using Total Cost Analysis, it will be more cost-effective to use a. Supplier B b. Supplier A c. Supplier C d. Cannot be determined.

a. Supplier B

Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management. a. True b. False

a. True

The bullwhip effect causes an amplification of the variation in the demand pattern along the supply chain. a. True b. False

a. True

The following is an example of the bullwhip effect: a. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction of replacements to companies involved in its supply chain b. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers c. Barkley's produces a defective product and thus realizes an excessive increase in consumer returns d. Barkley's products are so successful that it adds a new retailer for distribution

b. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular retailers

The continuing cycle of erratic demand causing forecasts to include safety stock which in turn magnify supplier forecasts and cause production planning problems is known as: a. Supply chain management b. Bullwhip effect c. Back-shoring d. Process integration

b. Bullwhip effect

Developed in the 1990's as a popular way of developing radically new business processes in an effort to reduce waste and increase performance is referred to as: a. Process integration b. Business process reengineering c. Vertical integration d. Benchmarking

b. Business process reengineering

SRM software can automate procurement activities that lead to significant cost savings as purchasing professionals move toward: a. Expediting each order b. Collaborative planning c. Improving capacity d. Diversifying their hiring

b. Collaborative planning

According to the textbook, conditions which must be present for successful supply chain management include: a. Corporate contracts regarding performance expectations b. Cooperation among firms c. Short-term company focused performance d. Vertical Integration

b. Cooperation among firms

According to the textbook, Supplier Recognition Programs: a. Are difficult to implement b. Encourage suppliers to keep their performance high c. Are used by 90% of companies d. Are generally not very effective

b. Encourage suppliers to keep their performance high

The primary goals of purchasing include all EXCEPT: a. Secure materials at the lowest cost b. Ensure the highest quality raw materials are purchased c. Maximize customer satisfaction d. Improve the quality of finished goods produced

b. Ensure the highest quality raw materials are purchased

The purchasing department at Big Horn Sheep Corporation decided to intentionally increase purchases from small, underdeveloped nations. This decision can be considered: a. Utilitarianism b. Ethical Sourcing c. Unethical d. Illegal

b. Ethical Sourcing

Inventory Turnover can be calculated by: a. Ratio of inventory days in stock over average inventory cost b. Ratio of cost of goods sold over average inventory cost c. Ratio of average inventory cost over inventory days in stock d. Ratio of average inventory cost over cost of goods sold

b. Ratio of cost of goods sold over average inventory cost

According to the text, the FOUR important elements of the supply chain are: a. Purchasing, manufacturing, logistics, transportation b. Supply, operations, logistics, integration c. Supply, operations, manufacturing, distribution d. Purchasing, manufacturing, transportation, retail stores

b. Supply, operations, logistics, integration

Why do firms assess their sourcing capabilities? a. They are looking for ways to reduce their employee headcount b. They can gauge their success in improving their own value-enhancing contributions to the firm c. They can easily spot suppliers who are not practicing sustainable sourcing practices d. All of these choices are correc

b. They can gauge their success in improving their own value-enhancing contributions to the firm

Which of the following is NOT a reason for supplier recognition programs? a. To reward suppliers for excellent performance b. To select the best suppliers c. To encourage suppliers to be more innovative d. To help suppliers' reputation in the marketplace

b. To select the best suppliers

Which type of requisition is used for materials and standard parts that are requested on a recurring basis? a. Recyclable requisition (Cyc-Rec) b. Traveling requisition c. Blanket requisition d. Open requisition

b. Traveling requisition

Sustainable sourcing policies should include which of the following? a. Use of child labor b. Use of renewable energy c. Fair working conditions d. Use of minority workers

b. Use of renewable energy

Which of the following would be considered a third party provider? a. An end product manufacturer b. A Raw materials supplier c. A firm that leases storage warehousing d. An intermediate component manufacturer Hide Feedback

c. A firm that leases storage warehousing

The main benefit(s) from benchmarking sourcing practices is/are: a. Larger market for products, economies of scale in purchasing and production, and lower labor costs. b. Savings in energy consumption and materials, lower distribution costs, and improved corporate image among regulators, customers and community. c. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies. d. Lower prices of goods and services, use of fewer buyers and lower administrative costs

c. Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies.

According to the text, which of the following is considered a current trend in supply chain management? a. Increasing supply chain visibility b. Using supply chain analytics c. Both "Using supply chain analytics" and "Increasing supply chain visibility" d. None of these choices are correct. Hide Feedback

c. Both "Using supply chain analytics" and "Increasing supply chain visibility"

Supply chain management includes the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes: a. Selling and marketing products b. Program evaluation and review techniques. c. Coordination and collaboration with channel partners d. Human resources and job design

c. Coordination and collaboration with channel partners

For a large company with many strategic supplier alliances, what would be the best way to manage them? a. Hire an outside firm to manage them b. Reduce the number of supplier alliances to less than five c. Create an alliance board to oversee alliances d. All of these choices are correct.

c. Create an alliance board to oversee alliances

Which of the following is an advantage of a centralized purchasing department? a. Less bureaucracy b. More frequent shipments c. Specialization d. Closer contact between buyer and user

c. Specialization

Convincing your supplier to cutting back on packaging, fuel, or electricity is an example of: a. Global sourcing b. Ethical sourcing c. Sustainable sourcing d. Sole sourcing

c. Sustainable sourcing

Which of the following is a reason that single sourcing is considered risky/bad? a. Decreases the item to item quality variability of items purchased b. Larger orders make quantity discounts more likely c. There could be supplier interruptions due to political instability d. It could establish close relationships with the supplier

c. There could be supplier interruptions due to political instability

SRM software should be capable of: a. Making information flow between partners more visible b. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally c. Automating transactional processes d. All of these choices are correct.

d. All of these choices are correct.

Which of the following can be used as a punishment for suppliers that perform poorly? a. Elimination of future business with the focal firm b. Downgrade the supplier's status c. Billback penalty d. All of these choices are correct.

d. All of these choices are correct.

Which of the following is important in developing successful relationships in a partnership? a. Interpersonal business relationships between employees of the companies b. Mutual/compatible needs that result in a win-win situation for the partners c. Commitment by top management d. All of these choices are correct.

d. All of these choices are correct.v

Which of the following statements is FALSE? a. Electronic procurement systems can aid a company in saving both time and money. b. More than 50% of each sales dollar typically goes towards covering supply chain costs. c. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing. d. Centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions.

d. Centralized purchasing is where individual, local purchasing departments, such as at the plant level, make their own purchasing decisions.

Which of the following is NOT important in developing a successful strategic alliance? a. Developing cross-functional team capabilities externally and within the company b. Open lines of communication that both promote sharing and secure confidentiality c. Developing performance metrics d. Developing efficient processes that will remain unchanged for the duration of the partnership

d. Developing efficient processes that will remain unchanged for the duration of the partnership

Which of the following is NOT a typical strategy for firms to obtain benchmarking data about other companies? a. Utilizing resources from the Center for Advanced Purchasing Studies b. Discussing sourcing strategies with colleagues at business association meetings c. Collecting published trade information on benchmarking studies d. Hiring former employees from other companies and assessing their knowledge

d. Hiring former employees from other companies and assessing their knowledge

Which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers? a. Lower product cost b. Better product quality c. Overseas supplier holding the patent to the product d. Lower shipping rates due to lower tariffs

d. Lower shipping rates due to lower tariffs

Some businesses refer to sustainability in terms of supporting the three P's. This stands for: a. People, place, price b. Place, price, promotion c. Planet, people, price d. People, planet, profit

d. People, planet, profit

Which of the following refers to the measurement of the impact of change in purchase spend on a firm's profit before taxes, assuming gross sales and other expenses remain unchanged? a. Direct Offset b. Break-Even Analysis c. Leveraging Purchase Volume d. Profit-Leverage Effect

d. Profit-Leverage Effect

Which of the following is a reverse logistics activity: a. Delivering finished goods to your customer b. Managing the quality of products c. Developing a collaborative relationship with your supplier d. Recycling products and components

d. Recycling products and components

According to the text, one of the most basic and successful approaches to protecting trade secrets is: a. Threat of litigation b. Working with law makers to increase fines and sentences for those that steal trade secrets c. Requiring employees and partners to get ISO 9000 certified d. Requiring employees and vendors to sign non-disclosure agreements

d. Requiring employees and vendors to sign non-disclosure agreements