mktg 333 exam 2
Most direct costs are: A) fixed costs. B) variable costs. C) overhead costs. D) general and administrative costs. E) semivariable costs.
B
The Sherman Antitrust Act states that suppliers: A) must adjust price so that profit does not exceed a set percentage of direct costs. B) not talk with competitors about price. C) use standard grade descriptions in advertising products. D) meet competition by adjusting price. E) must sell the same item, in the same quantity, to all customers at the same price.
B
In the portfolio matrix, characteristics of goods and services in the leverage quadrant are: A) few suppliers with adequate capability so substitution and switching are difficult. B) item substitution is possible, switching is difficult, many suppliers are available. C) item substitution and supplier switching are possible, but few suppliers are capable. D) competitive supply market, substitution is possible, price per unit is important. E) competitive supply market, substitution is possible, total cost is a primary focus.
D
what are some of the aspects of quality assurance when buying services?
"part of quality management focused on providing confidence that quality requirements will be fulfilled." - fulfilling requirements
Intermodal transportation in North America has increased due in large part to: A) increased reliability from technological and operational improvements B) improved service levels from railways after railway consolidation. C) deterioration of roads, bridges, and highways and the effect on trucking. D) improvements in roadways, bridges, and highways throughout North America. E) none of the above since intermodal business is declining, not increasing.
A
When assessing the quality of a telecommunications provider, a key indicator of superior quality to a competitor is the ability to: A) compress more high resolution information on the same bandwidth. B) have the leanest network of repeater stations. C) have the most extensive intermodal operations. D) own and operate the largest network of land and sea cable. E) own radio frequencies with greater range.
A
master production schedule
indicates when and how much of each product will be demanded.
Pros/cons of 100 percent sampling and inspection
inspection of each individual unit or component received from a supplier to determine specification and quality compliance- good bc you get a lower cost of returned items, etc. Bad bc your cost of internal quality inspects go up; takes a large amount of time
ABC analysis
is an inventory categorization method which consists in dividing items into three categories (A, B, C): A being the most valuable items, C being the least valuable ones.best for grouping inventory
Best buy
product or service that, in the buyer's opinion, represents acceptable quality at a fair or low price for that quality level
buffer inventory
supply on hand in case needed
In portfolio analysis, the goal when purchasing non-critical or routine spend is to: A) assure quality at expected levels. B) minimize acquisition time and cost. C) minimize price per unit. D) reduce or eliminate customization. E) assure continuous supply at lowest total cost of ownership
B
When a supplier offers a lower price for a larger quantity, the buyer should: A) order according to the EOQ model. B) determine the return on investment. C) always take the quantity discount. D) never take the quantity discount. E) determine the preference of senior management.
B
Which of the following statements supports single sourcing: A) there is a high probability of a devastating natural disaster. B) the use of just-in-time production, stockless buying, or systems contracting. C) concerns exist about supplier capacity for future volume. D) there is a need to reduce dependence on a supplier. E) there is volatility in the supplier market
B
In FOB Origin: A) the buyer gains title of the goods when the carrier signs at point of destination. B) the buyer gains title of the goods when the carrier signs at point of origin. C) the seller has the responsibility for selecting the carrier. D) the seller has the responsibility for filing any damage claims during transit. E) the carrier holds title of the goods during transit.
A
If the buyer wants to motivate the seller to manage total costs, the best type of contract is: A) cost-plus-incentive-fee (CPIF) B) cost-plus-fixed-fee (CPFF). C) cost-no-fee (CNF). D) firm-fixed-price (FFP). E) firm-fixed-price plus incentive fee (FFPIF).
A
What IOS 9000 certified? ISO 14000?
9000- effective quality assurance system for manufacturing and service industries. 140000- a guideline or framework for organizations that need to improve their environmental management efforts.
Decision trees: A) may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option. B) may be useful in making effective supplier selection decisions the first-time a buying decision is made, but not on repetitive purchases. C) may be useful in making effective supplier selection decisions when making repetitive purchases, but not special, one-time purchases. D) are of limited value because options can only be evaluated qualitatively, not quantitatively. E) cannot reflect past decisions so they are useless as a decision tool when making repetitive purchases.
A
Reverse marketing is: A) encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains. B) when the buying organization has decided to stop making something inhouse and identifies a supplier from its existing supply base. C) is an aggressive, marketing-initiated, approach to finding and developing world class suppliers. D) requires that the marketing department in the buyer's organization fully understand the needs of supply. E) is most appropriate when the product is fairly standard and available from multiple local suppliers.
A
Sustainability is the ability to: A) sustain economic prosperity through long-term relationships with key suppliers. B) achieve economic prosperity, a higher quality of life and protect natural systems. C) develop a supply base that meets requirements and protects natural systems. D) sustain long term bottomline growth with a stable supply base. E) achieve economic prosperity for the company and its shareholders and avoid environmental litigation.
A
The demand for a particular service may be: A) continuous, discrete, or periodic. B) dependent or independent. C) fixed quantity or fixed period. D) variable or static. E) tangible or intangible.
A
The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called: A) total cost of ownership. B) activity-based costing. C) target costing. D) competitive bidding. E) learning curve.
A
The zone of negotiation: A) indicates the feasibility of negotiation and the likelihood of an agreement. B) is the mindset that one must be in prior to initiating face-to-face negotiations. C) may be positive or negative depending on the gap between buyer's and seller's objectives. D) is the range of options the buyer will consider during the negotiation. E) is perceived in exactly the same way by buyer and seller in a negotiation.
A
"A" items in ABC analysis are: A) reviewed infrequently. B) particularly critical in financial terms. C) normally carried in large quantities. D) ordered infrequently. E) commonly managed by carrying inventory.
B
A fair price: A) is based on market conditions, and cost structure has no bearing on the determination of a fair price. B) is the lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit. C) is based on the cost to produce an item or service without consideration for the supplier's profit margin. D) is an amount arrived at through negotiations where the seller's price is a starting point. E) is when all sellers of equal goods or services receive the same per unit price.
B
A mode of transportation is: A) a transportation provider that moves goods and/or passengers. B) the means by which people, freight or information gain mobility. C) the means by which tangible goods gain mobility. D) a private business that trucks goods from point A to B. E) Burlington Northern Santa Fe Railway (BNSF).
B
A reduction in set-up costs and time impacts: A) transit inventories. B) cycle inventories. C) anticipation inventories. D) decoupling inventories. E) buffer inventories.
B
A supplier's references: A) should always be in the same industry as the buying organization. B) may be useful if they are of similar size and objectives as the buyer's organization. C) are never completely trustworthy and therefore of little use. D) should be ask closed-ended (yes-no) questions. E) are useful only to confirm factual information.
B
A cash discount allows: A) the seller to secure prompt payment, but has no benefits for the buyer. B) the buyer to pay a lower price per unit, but has no benefits for the seller. C) the seller to secure prompt payment, and the buyer to pay a lower price per unit. D) the seller to demand payment in cash on demand (C.O.D. upon receipt of goods. E) the buyer to always calculate the discount based on the delivery date.
C
Activity based costing attempts to correct the distortions built into product costing: A) by improving the way that direct costs are allocated. B) by improving the way that the learning curve is applied to direct labor costs. C) by tracking cost drivers of indirect costs and turning indirect costs into direct. D) by tracking cost drivers of direct costs and turning direct costs into indirect. E) by capturing labor and material usage more accurately.
C
Decoupling inventories are carried: A) to cover a well-defined future need. B) to stock the distribution pipelines. C) to permit activities on either side of a major process. D) to protect against machine breakdown. E) to protect against uncertainties in supply and demand.
C
Forward buying: A) offsets transactions to protect against price and exchange risks B) involves no risk for the buying organization. C) involves purchasing for known or estimated future requirements. D) is the same as speculation. E) seeks to take advantage of price movements.
C
On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $150. If the inventory carrying cost is 25 percent per year and assuming no ordering costs A) buying 100 at a time will save the company $6,250 per year. B) buying 100 at a time will save the company $4,125 per year. C) buying 100 at a time will save the company $3,937.50 per year. D) buying 100 at a time will save the company $3,875 per year. E) buying 100 at a time will lose the company $875 per year.
C
One of the advantages of integrated carriers (truck-air) like UPS and Federal Express is that they: A) utilize commercial airlines for air service. B) outsource much of their air network. C) own their own aircraft. D) rely more on air than ground transportation. E) outsource much of their ground network.
C
Supply management's role in environmental considerations is: A) expanding because purchasing has primary responsibility for specification writing. B) limited because environmental issues have little impact on the acquisition cycle. C) expanding because the goal of zero environmental impact affects the buying cycle. D) limited by the product design developed by design engineers. E) limited to compliance with government laws and regulations.
C
The market approach to pricing: A) means prices are set to cover direct costs, contribute to indirect, and attain a profit. B) is the only defensible pricing mechanism for ethical companies to use. C) implies that prices are set based on what the market will bear. D) means that prices are adjusted regularly to ensure that the seller recoups all its marketing costs. E) implies that market analysis is the only technique that should be employed to negotiate prices.
C
When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of: A) a deterministic model. B) a causal model. C) a time series forecasting technique. D) a qualitative model. E) a repetitive pattern technique.
C
When selecting freight carriers, buyers are most concerned with: A) types of equipment available. B) intermodal capabilities. C) ability to deliver on-time with no damages. D) geographic coverage. E) shipment security.
C
Which tool will focus everyone in the organization on cost management: A) learning curve. B) negotiation. C) target costing. D) activity based costing. E) portfolio analysis.
C
Continuous Planning, Forecasting and Replenishment (CPFR) generates the most accurate forecast possible and develops effective replenishment plans by: A) linking sales and marketing to supply management inside the buying organization. B) linking sales and marketing processes across supply chain organizations. C) linking a supply chain department with sales representatives in a supply chain. D) enabling multiple trading partners to collaborate. E) enabling supply management to collaborate internally with other functions.
D
Gmail is an example of: A) Just-in-time delivery. B) Just-in-case delivery. C) On-premise delivery. D) Off-premise delivery. E) On-need delivery.
D
Identical prices received from various sources should: A) be expected when the specification is highly customized. B) always make the buyer suspicious of collusion. C) only draw attention if the buyer is dissatisfied with the price quoted. D) draw attention if the specification is complex or detailed. E) result in the buyer taking legal action against all bidders
D
Capacity requirements planning (CRP): A) uses ABC analysis as an integral part of the process. B) is essential to minimize in-house inventories. C) ignores the human resources required, and focuses on needed machine resources. D) performs for manufacturing resources what MRP does for materials. E) calculates the service level by dividing average inventory carried by annual sales.
D
In portfolio analysis, the goal when purchasing leverage items is: A) assure supply. B) assure continuous supply at lowest total cost of ownership. C) assure quality at expected levels. D) minimize acquisition time and cost and price per unit. E) reduce or eliminate customization
D
Organizations operating under a just-in-time system, require: A) international coverage. B) heightened security. C) lowest price. D) on-time deliveries. E) real-time package tracking.
D
Small suppliers: A) are most suited for large dollar value "A" requirements. B) usually represent very low risk to the purchaser. C) tend to have a strong financial base. D) often provide the greatest responsiveness and flexibility. E) tend to have an extensive management structure.
D
The following cost is not a carrying, holding, or possession cost: A) interest on the money invested in inventory. B) transactional costs of keeping inventory records. C) cost of obsolete inventory. D) the purchase price of the item. E) insurance on inventory.
D
The learning curve is based on: A) the difficult to prove premise that more training leads to lower costs. B) the assumption that labor will never forget how to do something. C) a direct relationship to overhead costs. D) the common principle that one becomes more proficient with experience. E) an indirect relationship to direct material costs.
D
A material requirements planning (MRP) system: A) controls the "A" items. B) maximizes inventory. C) is easily carried out without technology. D) minimizes the use of data. E) requires explosion of the bill of material as the basis of planning.
E
A third party logistics (3PL) services provider: A) handles only administrative tasks such as auditing and billing. B) handles physical movement of goods, but does not perform administrative tasks. C) a subcontractor working with a prime logistics services provider. D) is a separate entity that provides management of inbound and outbound goods. E) is a separate company from the buyer's and supplier's organizations.
E
Outsourcing or using third party logistics services has: A) remained flat due to increased challenges of international logistics. B) become increasingly popular with small organizations, but not large ones. C) declined in popularity due to declining service provider performance. D) declined as transportation has been re-regulated. E) increased as organizations focus on core competencies.
E
Assessment of a potential supplier's financial situation: A) is best left to the finance department which will alert supply to any issues that might adversely affect a pending deal. B) seldom relies on financial information provided by the supplier. C) is always necessary and follows a strict protocol no matter what type of purchase or dollar value. D) is usually unnecessary because it is highly unlikely that a supplier will go out of business, and, even if they do, it is relatively easy to replace a supplier. E) may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations.
E
Items for which prices may be fixed or variable, by the job or by the hour, day, or week are called: A) raw and semiprocessed materials. B) parts, components, and packaging. C) maintenance, repair, and operating supplies. D) capital assets. E) services
E
Public purchasers are required to award contracts to the lowest "responsible" and "responsive" bidder. This means the bidder is: A) a business in the local community and submits the bid by the deadline. B) a respected business in the local community and responds within 48 hours of all requests. C) fully capable and willing to perform the work and responds to the bid in a timely manner. D) willing to perform the work using some minority-owned sub-contractors and submits the bid by the deadline. E) fully capable and willing to perform the work and submits a bid that conforms to the invitation for bid.
E
To avoid risk, a buyer can: A) hedge in a commodities market. B) require bid or performance bonds. C) decide not to do business in certain countries. D) a and b. E) a, b, and c.
E
Total cost of ownership (TCO) can used to: A) highlight cost reduction opportunities. B) compare suppliers in a supplier selection decision. C) prepare for a negotiation. D) assess the reasonableness of a supplier's prices. E) all of the above.
E
When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to: A) decide if negotiation makes sense. B) establish negotiation points. C) avoid setting unrealistic expectations. D) b and c. E) a, b, and c.
E
JIT vs MRP
Just in time gets materials in right when needed so no inventory while MRP Manufacturing Resource Planning, keeps inventory, and has extra in case deliveries ect goes wrong
Kan Ban and why is it used
a scheduling system for lean manufacturing and just-in-time manufacturing. Used to improve manufacturing efficiency
