Operations Management quiz

Successful partnerships have the potential to: a. Create a competitive advantage for the firm b. Contribute to innovations c. Improve material flows between buyers and suppliers d. All of these choices are correct.

All of these choices are correct.

Which of the following is a potential challenge for global sourcing? a. Dealing with duties b. Currency exchange c. Political problems d. All of these choices are correct.

All of these choices are correct.

A company using a weighted-criteria evaluation system has established these 4 categories and the appropriate weight in parentheses: Reputation (0.20), Quality (0.35), Environmental (0.15), Cost (0.30). The scores for each category are shown below. Measure Company A Company B Company C Reputation 75 70 75 Quality 80 90 85 Environmental 90 80 85 Cost 70 75 80 Calculate the scores and choose which of the following companies has the highest total score? a. Company B b. Company A c. Company C d. All companies scored the same.

Company C

Which of the following is a criteria generally found in certification programs: a. No negative income b. Planned order releases c. Non-disclosure agreements d. No incoming nonproduct rejections over a specified time

No incoming nonproduct rejections over a specified time

Petty cash is being phased out in favor of: a. Venmo b. Bitcoin c. P-cards d. Kanban

P-cards

A program used to celebrate the achievements of the best suppliers is: a. The Supplier Development Program b. The Evaluation and Certification Program c. The Supplier Recognition Program d. The Top Quality Management Program (TQM)

The Supplier Recognition Program

Which of the following is an advantage of decentralized purchasing departments? a. Use of common supply base b. Lower transportation costs c. Avoids duplication d. Better knowledge of unit requirements

Better knowledge of unit requirements

A(n) ____________ purchase order is negotiated for repeated supply over a fixed time period, such as quarterly or yearly. a. Invitation for bid b. Blank check c. Blanket d. Automatic

Blanket

Suppose your in-house fixed costs are $200,000, in-house unit production cost is $10, and the outsourcing unit cost is $30. What is the break-even point? 5,000 10,000 20,000 30,000

10,000

Given the following information, find the break-even quantity using Break-even Analysis. Costs Make Option Buy Option Fixed Cost $100,000 $5,000 Variable Cost $12 $15 a. 31,667 units b. 35,000 units c. 33,333 units d. 25,000 units

31,667 units

Making all the purchasing decisions, including order quantity, pricing policy, contracting, negotiations, and supplier selection and evaluation are the key characteristics of a. Single stage replenishment b. Logistics Management c. Centralized Purchasing d. Decentralized Purchasing

Centralized Purchasing

SRM software allows buyers to focus on more strategic and value-added activities such as: a. Simplification b. Time utility c. Risk pooling d. Collaborative planning

Collaborative planning

Which of the following is NOT a reason for favoring multiple sourcing? a. Encourages competition among suppliers b. Increases information about new processing technologies c. Spreads the risk of supply interruption d. Less quality variability

Less quality variability

Which of the following is NOT a factor to consider when selecting suppliers for important materials? a. Reliable product quality level b. Number of customers with which the supplier currently has contracts c. Supplier's distance from the manufacturing facility d. Supplier's willingness to share technologies

Number of customers with which the supplier currently has contracts

Which of the following is a reason that single sourcing is considered risky/bad? a. Firms cannot take advantage of transportation economies b. It is easier to establish a mutually beneficial strategic alliance c. Poor supplier performance could result in plant shutdowns d. Volume of order may be too small

Poor supplier performance could result in plant shutdowns

When evaluating supplier performance, the cost of certifying and training suppliers, is part of which major cost category? a. Transaction costs b. Pre-transaction cost c. Post-transaction costs d. All of these choices are correct

Pre-transaction cost

Which of the following is least accurate for the case illustrated? An increase in the in-house fixed costs will increase the break-even point. A decrease in the out-sourcing unit cost will increase the break-even point. Production quantities smaller than the break-even point will result in a net loss. A decrease in the in-house unit production costs will decrease the break-even point.

Production quantities smaller than the break-even point will result in a net loss.

The purchasing and supply management function in the government and nonprofit sectors, such as educational institutions; hospitals; and federal, state, and local governments is called: a. Public procurement b. Competitive buying c. Public spending d. Transactional procurement

Public procurement

Which of the following is NOT a key factor for developing a successful supplier partnership? a. Personal relationships b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Shared vision and objectives d. Information sharing and lines of communication

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

One of the primary goals of purchasing is to: a. Maximize stockholder wealth b. Help build the organization's public image and reputation c. Facilitate the processes of knowledge transfer between individuals and between organization d. Ensure uninterrupted flows of raw materials at the lowest total cost

Ensure uninterrupted flows of raw materials at the lowest total cost

In 2016, ___________ was the leading market for U.S. exports. a. Canada b. Mexico c. China d. Japan

Canada

Purchasing activities include all the following EXCEPT: a. Negotiations b. Logistics considerations c. Contract administration d. Franchising services

Franchising services

Which of the following is NOT used to calculate total transportation cost when using the Total Cost of Ownership concept? a. Distance to factory b. Number of units c. Weight per unit d. Gas prices

Gas prices

More than a dozen presidential executive orders requiring federal purchasing officials to include environmental considerations and human health when making purchasing decisions can be attributed to a concept called: a. Green Purchasing b. Counter Purchasing c. Hybrid Purchasing d. Buy America Act

Green Purchasing

All of the following are important capabilities offered by SRM software EXCEPT: a. Automation b. Visibility c. Optimization d. Human Resource Management

Human Resource Management

For continuous improvement to succeed, employees must first: a. Identify areas that are not working b. Understand transaction costs c. Identify areas that are working d. Be compensated for making suggestions

Identify areas that are working

A(n) _______________ performs transactions for a fee, and does not take title to the goods. Instead, title passes directly from the seller to the buyer. a. Second-tier-supplier b. Keiretsu c. Import broker d. Leverage buyer

Import broker

One of the most basic and successful approaches for protecting trade secrets is to: a. Increase the supplier base b. Contribute to innovations c. Require employees and vendors to sign a nondisclosure agreement d. All of these choices are correct.

Require employees and vendors to sign a nondisclosure agreement

Suppose your in-house fixed costs are $200,000, in-house unit production cost is $10, and the outsourcing unit cost is $30. If both the in-house and out-source costs per unit increase by $5, what happens to the break-even point? Decreases to 8,000 Increases to 13,333 Stays the same at 10,000 Decreases to 5,000

Stays the same at 10,000

The total cost of ownership for Supplier 1 is $1,670,000. The total cost of ownership for Supplier 2 is $1,750,000. The total cost of ownership for Supplier 3 is $1,690,000. Using Total Cost Analysis, it will be more cost-effective to use

Supplier 1

____________ involves streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively. a. Supplier Certification Program b. Corporate Social Responsibility c. Supplier Relationship Management d. Performance Measurement

Supplier Relationship Management

Transactional SRM: a. Provides answers to questions such as: Which suppliers would make the company more profitable? b. Tends to focus on short-term reporting and is event driven c. Focuses on long-term procurement strategies d. Helps organizations assess where they want to go in the future to meet their strategic purchasing goals

Tends to focus on short-term reporting and is event driven

Which of the following do organizations use in supplier evaluation and certification processes? a. Tracking service quality b. Inventory turnover ratio c. Consumer sales d. Logistics

Tracking service quality

ISO 9000 certification is described best by which of the following? a. A series of management and quality assurance standards in design development, production, installation and services b. Developed by the International Organization for Standardization for environmental compliance c. A prerequisite for obtaining ISO 14000 certification d. A series of purchasing standards developed by Toyota in the 1970s

A series of management and quality assurance standards in design development, production, installation and services

Customers and suppliers must develop stronger relationships and partnerships based on: a. A strategic perspective b. The profit leverage effect c. A tactical perspective d. Simplification

A strategic perspective

According to the text, which of the following is TRUE? a. One of the most basic and successful approaches to protecting trade secrets is threat of litigation b. About 75% of companies recognize excellent performance with supplier awards and appreciation banquets c. One result of an effective supplier certification program is an increase in the supplier base d. About 50% of companies recognize excellent performance with supplier awards and appreciation banquets

About 50% of companies recognize excellent performance with supplier awards and appreciation banquets

Benefits for organizations that successfully implement supplier relationship management can include: a. Increased speed to market b. Reduced costs c. Improved quality d. All of these choices are correct

All of these choices are correct

Which of the following is an advantage to utilizing an e-procurement system? a. Mobility b. Time savings c. Cost savings d. All of these choices are correct.

All of these choices are correct.

Which of the following is NOT important in developing a successful supplier partnership? a. Open communication and information exchange b. Annual sales knowledge of the supplier c. Creating value for all participants d. Mutual/compatible needs that result in a win-win situation for the partners

Annual sales knowledge of the supplier

Hormel Food Corporation's No. 1 Award program differs from other programs because: a. The award is given out once every five years b. Qualification for the award include green recovery criteria c. The award is given out bi-annually d. They provide cash incentives to the recipients

The award is given out once every five years

A benefit to the firm for utilizing a supplier recognition program would be: a. It will lead to the silo-effect b. Suppliers are more likely to lower their product costs c. It will increase the supply base d. The award recipients can serve as role models for a firm's other suppliers

The award recipients can serve as role models for a firm's other suppliers