MKTG 333 EXAM 3

The governing convention on shipping terms and responsibilities involved in international transportation is called: A) INCOTERMS (International Commercial Terms). B) FOB (Free on Board) terms. C) EXQ (Ex Quay) terms. D) FCA (Free Carrier named place) terms. E) ITAPS (International Transport and Payment Specifications) terms.

A) INCOTERMS (International Commercial Terms).

When there is a large number of common requirements across facilities or business units, and the supply base is dispersed geographically, an appropriate global sourcing structure is: A) a global commodity management organization. B) regional purchasing offices that manage the region's spend for every commodity. C) a centralized international purchasing office equidistant from key suppliers. D) a centrally managed global sourcing office located in the corporate headquarters. E) a decentralized structure where purchasing managers are at each facility.

A) a global commodity management organization

To select a potential supplier-partner, the buyer should consider: A) both hard and soft factors with an eye toward long-term outcomes. B) both hard and soft factors with an eye toward short-term outcomes. C) soft factors such as congruence of management values and compatibility. D) hard factors such as quality, quantity, cost, and technology. E) the willingness of the supplier to quickly change processes for results.

A) both hard and soft factors with an eye toward long-term outcomes.

Value analysis compares: A) function to cost. B) value to cost. C) function to value. D) value to quality. E) cost to quality.

A) function to cost.

In a contract for services, a key personnel clause: A) may be included if success depends on specific individuals B) legally cannot be included because work assignment is the responsibility of the service provider. C) is undesirable from the buyer's perspective because on-going negotiations are a better way to ensure the best personnel are assigned throughout the contract. D) should always be included no matter the nature of the service. E) is desirable from the supplier's perspective to ensure that the buyer cannot demand personnel changes mid-contract.

A) may be included if success depends on specific individuals

Commercial bribery: A) may become an industry practice. B) is outlawed in very few countries. C) is outlawed throughout the West, but not in Asia. D) legal rulings rest on the doctrine of promissory estoppel. E) usually involves only one company offering bribes.

A) may become an industry practice.

Target costing starts with the: A) price of a final product or service. B) price the buyer wants to pay for a good or service. C) cost of materials to make an end product. D) Price the supplier wants to charge for goods or servies. E) total cost of doing business with a supplier.

A) price of a final product or service.

The document used to identify activities in the first step in the internal supply chain is a: A) receiving report. B) inspection report. C) supplier scorecard. D) bill of lading. E) packing slip.

A) receiving report.

If the buyer perceives a buyer-supplier relationship is in the desirable region on the purchaser-supplier satisfaction matrix, but there are problems, the buyer is most likely to: A) share information to find a mutual solution. B) refuse to pay bills. C) refuse to accept shipments. D) sever purchases without advance notice. E) use or threaten legal action.

A) share information to find a mutual solution.

In order to return scrap to the manufacturer from whom it was purchased, either for cash or for credit toward future purchases: A) the firm must be a large consumer. B) there normally must be at least two suppliers. C) the quantity involved must be small. D) the material normally must be in short supply. E) b and d.

A) the firm must be a large consumer.

When cross-functional teams are used to conduct research, it is best if: A) the team has strong leadership. B) the team has total autonomy to decide objectives and set expectations. C) team members are randomly selected from departments. D) performance evaluation and reward systems foster individual contributions. E) each team member develops time management skills to handle the assignment

A) the team has strong leadership.

Which of the following is a factor in determining the validity of a contract? A) opposing parties. B) competent parties. C) employment in the legal department. D) amount over $500. E) offer and counteroffer.

B) competent parties.

The assessment of a supplier's financial situation: A) is best left up to finance experts. B) enables the development of risk minimization strategies. C) is done primarily to ensure the supplier has the cash to pay its bills. D) usually is unnecessary if the supplier has been in business for more than 5 years. E) is required before a contract can be ratified.

B) enables the development of risk minimization strategies.

The authority that is necessary, usual, and proper to carry through to completion the express authority conferred, is called: A) apparent authority. B) implied authority. C) implicit authority. D) direct authority. E) performance authority.

B) implied authority.

A weighted point evaluation system: A) is seldom used because the costs usually outweigh the benefits. B) includes evaluation criteria, an importance factor for each, and a rating system. C) includes efficiency and effectiveness metrics weighted by users perceptions. D) is the most commonly used process because of ease of design and use. E) allows each rater to weight the criteria, but all raters use the same rating scales.

B) includes evaluation criteria, an importance factor for each, and a rating system.

A document which is drawn by the buyer's bank at the buyer's request, and guarantees that the bank will pay the agreed-on amount when all prescribed conditions, such as satisfactory delivery, have been completed, is called a: A) bill of material. B) letter of credit. C) bill of exchange. D) a sight draft. E) letter of exchange.

B) letter of credit.

A document that is produced by the supplier and provides a description of the goods, quantity; the customer's purchase order number, and often a tracking number, is called a: A) bill of lading. B) packing slip. C) purchase order. D) requisition. E) bill of material.

B) packing slip.

A comprehensive commodity study should result in a(n): A) thorough analysis of sources used over time. B) strategy to lower cost and assure supply. C) review of past predictions and variances from actual prices paid. D) assessment of the performance of the commodity manager. E) trend analysis of volume requirements over time.

B) strategy to lower cost and assure supply.

Strategic supply management is founded on the conviction that a significant contribution to competitive edge is made by: A) suppliers of operational and strategic goods and services. B) suppliers, supply systems and buyer-supplier relationships C) the supply management department and internal supply systems. D) suppliers of strategic goods and services. E) suppliers and the information systems used to manage relationships.

B) suppliers, supply systems and buyer-supplier relationships

When sourcing offshore: A) differing cultural and social norms will have little impact since most businesspeople are accustomed to working with North Americans. B) the buyer should learn about the culture, customs, norms, taboos, and history of the supplier's country. C) the need for personal space is generally the same in most regions of the world. D) the global availability and use of email, fax, and phone has largely eliminated communication barriers. E) the buyer should immediately establish an informal first-name basis with the supplier's representatives.

B) the buyer should learn about the culture, customs, norms, taboos, and history of the supplier's country.

Co-location refers to placing: A) supply management personnel at a key supplier's location. B) supply management personnel in an internal user's department. C) a key supplier's personnel in a department at the buyer's location. D) a key supplier's personnel in a department in another key supplier's location. E) a key internal user in the supply management department.

C) a key supplier's personnel in a department at the buyer's location.

When one condition of a countertrade agreement is that government and/or military-related exports be purchased, this is called: A) pure barter. B) mixed barter. C) an offset arrangement. D) co-production. E) buyback.

C) an offset arrangement.

Purchasing performance benchmarking attempts to: A) analyze a firm's own internal trends. B) provide industrywide standards for overall firm performance. C) determine what results have been achieved by purchasing and supply activities. D) determine how an organization achieves results in purchasing and supply. E) provide baseline metrics to compare companies' supply performance.

C) determine what results have been achieved by purchasing and supply activities.

If a termination for convenience clause is included in a services contract: A) its validity depends on whether the contract is in the private or public sector. B) it is easy to determine if it is exercised in bad faith or an abuse of discretion. C) if exercised in bad faith, it may mean the termination is a breach of contract. D) specifically identifies events that will trigger termination. E) it defines what constitutes sufficient cause to terminate.

C) if exercised in bad faith, it may mean the termination is a breach of contract.

Research on the supply management process focuses on: A) developing a strategy to reduce cost or ensure supply. B) deciding whether to single or multiple source. C) increasing efficiency by automating wherever possible. D) improving buyer-seller relationships. E) conducting cost analysis to identify unnecessary costs.

C) increasing efficiency by automating wherever possible.

Industry performance benchmarks typically provide: A) analysis of a company's own internal trends to identify improvements. B) a comparison of a company's current performance to past performance. C) industry reference points for an individual company to compare itself to. D) specific financial data about individual companies. E) data so that an individual company can compare itself to its major competitor.

C) industry reference points for an individual company to compare itself to.

Supply chain management effectiveness is driven primarily by the organization's ability to manage the: A) internal link between supply management and its internal customers. B) internal link between supply management and senior management. C) internal and external links of customers, the buying organization and suppliers. D) external link between a buying organization and its key suppliers. E) external link between a buying organization and its key customers.

C) internal and external links of customers, the buying organization and suppliers.

In a contractual dispute between buyer and seller, the process of elevating the discussion from buyer and sales representative to their supervisors and up through the organization before referring the matter to an outside unbiased referee is called: A) arbitration. B) mediation. C) internal escalation. D) negotiation. E) adjudication.

C) internal escalation.

When it comes to product liability, supply management: A) has little or no role since this is essentially a legal action. B) has responsibility only to the internal customer, not the final customer. C) lowers risk by ensuring that suppliers deliver defect-free goods. D) is liable depending on the type of warranty agreed to in the contract. E) is responsible for establishing the cost of the actual damage.

C) lowers risk by ensuring that suppliers deliver defect-free goods.

Investment recovery is often assigned to: A) engineers who can suggest possible uses of the material within the organization. B) financial analysts because they set the target return on all investments. C) supply managers because of their knowledge of supply markets and price trends. D) salespeople because they have contact with buyers who may use the material. E) marketing managers because they have information on internal users.

C) supply managers because of their knowledge of supply markets and price trends.

Which of the following would encourage countertrade? A) excess foreign exchange. B) readily available credit. C) the need to develop export markets for new products. D) a well-developed domestic economy. E) a strong base of suppliers.

C) the need to develop export markets for new products.

A U. S. buyer may be discouraged from sourcing offshore if: A) unemployment is high in the U. S. B) the supplier offers lower overall costs. C) the political situation in the country of interest is questionable. D) there are few domestic sources. E) popular opinion in the U. S. is against it.

C) the political situation in the country of interest is questionable.

Which of the following provides the maximum return on the original investment: A) return to the supplier for cash or credit. B) sell through a broker. C) use "as is" elsewhere in the firm. D) reclaim materials for use elsewhere within the firm. E) sell to a scrap dealer.

C) use "as is" elsewhere in the firm.

The potential benefits of having accounts payable (AP) report to the same executive as supply include: A) familiarity with the supplier and the order. B) opportunities to reduce transaction costs, but increase headcount. C) the ability for supply to ensure that payments for suppliers are made on time. D) a and c. E) b and c.

D) a and c.

One of the reasons why companies are paying more attention to the effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste materials is that: A) consumers overwhelmingly demand environmental responsibility. B) it is easy to administer and highly profitable. C) most organizations generate little scrap, surplus, obsolete and waste materials. D) disposal costs are rising and environmental legislation is strengthening. E) disposal is a fairly simple problem that is easily resolved.

D) disposal costs are rising and environmental legislation is strengthening.

Suppliers that anticipate operational and strategic needs of the purchaser and are capable of meeting and exceeding them are called: A) unacceptable. B) acceptable. C) preferred. D) exceptional. E) supplier partners.

D) exceptional.

In international buying, the entity that makes a contract with the buyer and then buys the product in its name from the foreign supplier, takes title, delivers to the place agreed on with the buyer, and then bills the buyer for the agreed-on price, is a(n): A) import broker. B) import agent. C) sales agent. D) import merchant. E) trading company.

D) import merchant.

The United Nations Convention for the International Sale of Goods (CISG): A) replaces the UCC as the worldwide body of law governing international trade. B) should always be the preference for a buyer from the United States. C) always puts the United States buyer at an advantage. D) is automatically applied if both nations have adopted the CISG, unless another body of law is agreed upon in the contract. E) is automatically applied if both nations have adopted the CISG, and there can be no exceptions.

D) is automatically applied if both nations have adopted the CISG, unless another body of law is agreed upon in the contract.

When dealing with an international supplier, a knowledgeable buyer: A) normally will attempt to negotiate a cost-plus-incentive-fee contract. B) will attempt to price in Euro Dollars. C) will normally price in the currency of the seller's country. D) may decide to deal in international currency options. E) will always state the price in U.S. dollars.

D) may decide to deal in international currency options.

The budget which begins with an estimate of expected operations, based on sales forecasts and plans, is called the: A) operating budget. B) capital budget. C) cash flow budget. D) operations purchase budget. E) organizational budget.

D) operations purchase budget.

Research dollars will most likely be allocated to the: A) most unprofitable end-product or service. B) most profitable end-product or service. C) most likely candidate for a successful new product or service rollout. D) product or service with the highest current or projected dollar value. E) supplier with the poorest performance record.

D) product or service with the highest current or projected dollar value.

A seller may include a protection clause stating that "the buyer agrees and warrants that the product will not be resold in its present form or for its original usage application" if it is: A) surplus product. B) waste. C) hazardous waste. D) rejected items that are trademarked or branded. E) scrap metals.

D) rejected items that are trademarked or branded.

The Sarbanes-Oxley Act: A) has no impact on the supply management process. B) requires the Chief Purchasing Officer to sign off on every contract. C) requires supply management to report directly to the Chief Financial Officer. D) requires listing off-balance sheet items such as long-term purchase agreements. E) affects internal accounting procedures of privately-held companies.

D) requires listing off-balance sheet items such as long-term purchase agreements.

Which of the following is a result of forming a buyer-supplier partnership: A) the amount of time committed to the buyer-supplier relationship is greatly reduced. B) buyer-supplier relationships are greatly improved at the expense of internal relationships. C) the buying organization can enjoy the benefits of horizontal integration without the disadvantages. D) the design process and the introduction of new designs is faster due to earlier supplier and supply involvement. E) significant quality improvements occur and total cost typically increases.

D) the design process and the introduction of new designs is faster due to earlier supplier and supply involvement.

The legal authority of a salesperson normally is: A) the same as that of a buyer. B) to make legally-binding contracts for $500 or less. C) to make legally binding contracts for sales over $500. D) to solicit orders and get ratification and acceptance from his or her employer. E) based on the length of time the salesperson has been employed.

D) to solicit orders and get ratification and acceptance from his or her employer.

Supply can contribute to the organization's environmental management program by: A) developing sourcing and usage alternatives for hazardous materials. B) focusing on substitution of non-hazardous materials for hazardous materials. C) encouraging and participating in designing products that do not use or generate hazardous waste. D) a and b. E) a, b and c.

E) a, b and c.

One of the assumptions on which the purchasing-supplier satisfaction model is based is that: A) the satisfaction level cannot be assessed well enough to draw definitive conclusions. B) the purchaser and supplier always have the same perceptions of the same relationship. C) attempts to move to a different position fall only in the win-lose and win-win categories. D) there are few tools and techniques available to move positions or improve stability. E) an unsatisfied party may use various tools to improve the relationship.

E) an unsatisfied party may use various tools to improve the relationship.

To enhance the chance for successful strategic alliances, the supply manager must: A) ensure that price formulation and price escalator clauses are included in the contract terms and conditions. B) clearly establish what is required from the supplier and the penalties for failure to perform. C) reinforce the notion that the supply manager can easily switch to another alliance if the supplier fails to perform. D) analyze the supplier's capability for e-procurement and ensure that the supplier can effectively and efficiently manage online catalogs. E) identify suppliers whose management views on quality and productivity match those of the buying organization and have both parties establish expectations.

E) identify suppliers whose management views on quality and productivity match those of the buying organization and have both parties establish expectations.

When the goods fit the ordinary purpose for which goods of that description are used in the trade, there is a(n): A) express warranty. B) implicit warranty. C) warranty of title and against infringement. D) implied warranty of fitness for a particular purpose. E) implied warranty of merchantability.

E) implied warranty of merchantability.

Reducing the obsolescence and waste of maintenance, repair, and operating (MRO) supplies through better materials and inventory management will: A) increase the costs of disposing of MRO items that are obsolete or waste. B) increase carrying cost by increasing inventory levels, especially of obsolete items. C) improve environmental performance by increasing waste that goes into landfills or incinerators. D) have little impact because MRO is a small percentage of annual spend and the items usually have low environmental impact. E) simultaneously reduce costs and improve environmental performance.

E) simultaneously reduce costs and improve environmental performance.