SCM CH 14
In the _____ approach to a systems supplier's level of service, the outsource service supplier takes on only two or three small functions from the client, using a stepping stone approach. a. evergreen b. turnkey c. shared d. modular e. time and materials
D
A/An _____ clause assumes the contract will be renewed every year unless the supplier is otherwise notified that this is not the case. a. evergreen b. due diligence c. penalty d. escape e. None of the above.
A
A/An _____ is defined as a contract purchase that is routinely made over a relatively limited time horizon, typically one year or less. a. short-term contract b. alliance c. spot contract d. long-term contract e. partnership
A
A/An _____ occurs in situations in which a buyer is allowed to automatically discount the published purchase price by a negotiated percentage for all purchases from a given price list or catalog during the contract period. a. pricing agreement b. international contract c. national contract d. open-ended order e. None of the above.
A
A/An _____ specifies that business units within a corporate organization must buy from specific suppliers during the term of the contract. a. corporate agreement b. open-ended order c. online MRO catalog d. blanket order e. open-ended order
A
In a _____ contract, the supplier receives reimbursement for all of its allowable costs up to a predetermined amount plus a fixed fee, which typically represents a percentage of the targeted cost of the good or service being procured. a. cost plus fixed-fee b. fixed-price with redetermination c. time and materials d. fixed-price plus fixed-fee e. None of the above.
A
In the _____ approach to a systems supplier's level of service, the service provider and the client company share resources and operational control over the outsourced service. a. shared b. commonality c. evergreen d. modular e. turnkey
A
The _____ clause in a contract provides guidelines regarding what type of reporting statistics and measures the supplier must provide to the buyer on a regular basis, defined clearly. a. statistics b. notices c. most favored customer d. confidentiality e. third-party rights
A
The _____ clause in a contract provides specific details on how the supplier's performance will be measured and if any compensation will be awarded by the supplier to the buyer if these certain defined levels of performance are not maintained. a. key performance indicators and compensation b. liability c. notices d. third-party rights e. assignment and contracting
A
The _____ clause of a contract states whether the buyer can expect to receive preferential status over the supplier's other customers. a. most favored customer b. confidentiality c. notices d. liability e. scope of agreement
A
The _____ clause of a contract stipulates whether either party has the ability to terminate the contract at any time, and how much advance notice must be given. a. effective date and termination b. payment c. third-party rights d. most favored customer e. force majeure
A
With pure ______ contracts, allowable costs are shared between the parties on a predetermined percentage basis. a. cost-sharing b. time and materials c. fixed-price with incentives d. cost plus incentive fee e. fixed-price with redetermination
A
[A/An] _____ is an intervention between conflicting parties to promote reconciliation, settlement, or compromise. a. mediation b. arbitration c. litigation d. mini trial e. rent-a-judge
A
A/An _____ contract is designed to provide access to expensive computer networks and software that single companies are unable to afford on their own. a. time and materials b. systems c. firm fixed price d. cost-sharing e. evergreen
B
A/An _____ generally runs for a 12-month period and may or may not come up for renewal at the end of the year. a. national contract b. annual contract c. open-ended agreement d. blanket order e. None of the above.
B
The _____ clause in a contract describes how an issue will be addressed if a portion of the agreement is void or unenforceable, and which court of law will resolve the difference. a. force majeure b. severability c. notices d. intellectual property e. supply and delivery
B
The _____ clause in a contract establishes where bills, invoices, notices, and other documents should be sent, as well as the key contact person at the buying and supplying companies to whom all questions and issues concerning the relationship. a. severability b. notices c. governing law d. supply and delivery e. intellectual property
B
The _____ clause of a contract describes the course of events that occur if there are unforeseen calamities such as earthquakes or hurricanes that prevent a supplier from fulfilling its obligations to the buyer. a. liability b. force majeure (LO #1 c. confidentiality d. third-party rights e. governing law
B
The _____ clause of a contract identifies any free trade issues and benefits, and how to share the benefits. a. assignment and contracting b. free trade areas c. key performance indicators and compensation d. payment e. scope of agreement
B
The _____ clause of a contract specifies method of manufacture and quality requirements and may include language specific to terms of quality. a. liability b. specifications, quality, and health, safety, environment c. intellectual property d. assignment and contracting e. confidentiality
B
The _____ clause of a contract stipulates whether the supplier can assign its rights described in the agreement to another party, and whether subcontracting is permissible. a. key performance indicators and compensation b. assignment and contracting c. supply and delivery d. scope of agreement e. None of the above.
B
Which of the following is not one of the potential disadvantages of using long-term contracts? a. Supplier volume uncertainty. b. Volume leveraging. c. Buyer is unreasonable. d. Selecting the wrong supplier. e. Supplier foregoes other business.
B
_____ is defined as the submission of a disagreement to one or more impartial persons with the understanding that the parties will abide by the decision. a. Negotiation b. Arbitration c. Litigation d. Mediation e. Authorization
B
_____ refers to the volatility of pricing conditions for major elements of the product, such as raw materials, purchased components, and labor. a. Supplier's ability to impact costs b. Component market uncertainty c. Process or technology uncertainty d. Total dollar value of the purchase e. None of the above.
B
In a firm fixed price contract, if market prices for a purchased good or service _____ the stated contract price, the _____ bears the brunt of the financial loss. a. rise above....purchaser b. rise above....seller c. fall below....seller d. stay the same....seller e. None of the above.
B
A/An _____ is an agreement that typically covers many different items that can be purchased under the same purchase order number, thereby minimizing repetitive paperwork in the purchasing department for relatively low-cost items. a. annual contract b. national contract c. blanket order d. national buying agreement e. corporate agreement
C
A/An _____ is similar to a/an _____ but allows the addition of items not originally included in the order and may allow the original purchase order to be extended for a longer term. a. closed-end order....open-ended order b. national contract....national buying agreement c. open-ended order....blanket order d. open-ended order....pricing agreement e. blanket order....national buying agreement
C
In the _____ approach to a systems supplier's level of service, the client company essentially turns over the entire outsourced service at a given point in time. a. modular b. incremental c. turnkey d. shared e. None of the above.
C
In the _____ contract, if the supplier can demonstrate actual cost savings through production efficiencies or substitution of materials, the resulting savings from the initial price targets are shared between the supplier and the purchaser at a predetermined rate. a. time and materials b. cost plus fixed fee c. fixed-price with incentives d. firm fixed price e. fixed-price with escalation
C
The ____ clause of a contract defines what is in and out of scope, which might include the geographical limitations, the validity or invalidity of prior contracts, preferential treatment by the supplier, or other elements. a. force majeure b. supply and delivery c. scope of agreement d. liability e. key performance indicators and compensation
C
The _____ clause of a contract specifies conditions regarding who own any IP rights that comes out of the agreement, and who owns what IP going into the agreement. a. liability b. confidentiality c. intellectual property d. technology improvements e. assignment and contracting
C
The _____ the term of the purchase agreement, the _____ firm fixed-price contracts will be acceptable to the supplier. a. shorter....less likely b. longer....more likely c. longer....less likely d. longer....same likelihood that e. There is no relationship between contract term and acceptability to the supplier.
C
The most basic contractual pricing mechanism is called a/an _____ contract. a. fixed price with escalation b. cost plus incentive fee c. firm fixed price d. cost-sharing e. fixed price with redetermination
C
Which of the following is not an example of a contingency element of a long-term contract? a. Initial price. b. Price-adjustment mechanisms. c. Delivery dates and times. d. Supplier performance improvement. e. Evergreen, penalty, and escape clauses.
C
Which of the following is not one of the factors to consider when deciding which dispute-resolution mechanism to use? a. Status of the relationship between the parties in the dispute. b. Type of outcome desired by the purchaser. c. Type of contract leading to the dispute. d. Level of emotion displayed by the principals. e. None of the above.
C
_____ are based on the notion that as purchase volume increase, cost structures change. a. Short-term contracts b. Firm fixed price contracts c. Long-term contracts with incentives d. Time and materials contracts e. Blanket orders
C
A _____ is defined as a purchase that is made on a nonrecurring or limited basis with little or no attention of developed an ongoing relationship with the supplier. a. purchasing alliance b. long-term contract c. short-term contract d. spot contract e. JIT contract
D
A/An _____ specifies that the buyer will buy a certain amount of goods and services for the duration of the agreement. a. pricing agreement b. evergreen clause c. national buying agreement d. national contract e. blanket order
D
All of the following are reasons for suppliers preferring long-term contracts except _____. a. the supplier receives better scheduling information, which in turn helps the supplier's production area improve efficiency and materials planning b. detailed projections of volumes and delivery dates allow the supplier to better budget the flow of funds and investment stemming from the expectation of continued future volume c. the supplier's organization lowers unit costs because fixed costs are spread out over the term of the contract d. the supplier can afford to pay its workforce higher wages to increase productivity e. the supplier can realize lower administrative costs over the term of the contract.
D
In a firm fixed price contract, if market prices _____ the stated contract price because of outside factors such as competition, changes in technology, or raw material prices, the _____ assumes the risk or financial loss. a. rise above....purchaser b. stay the same....seller c. stay the same....purchaser d. fall below....purchaser e. None of the above.
D
The _____ clause in a contract ensures that all information, technology, and so on shared between the parties remains confidential and is not shared with other customers or suppliers. a. assignment and contracting b. liability c. third-party rights d. confidentiality e. intellectual property
D
The _____ clause of a contract specifies terms such as "current price," "prior price," and other criteria that determine how or if prices will be adjusted over the course of the contract. a. force majeure b. most favored customer c. key performance indicators and compensation d. payment e. intellectual property
D
The _____ clause of a contract specifies whether the buyer, if he or she becomes aware of any technology or cost improvements of other products in the market, he or she can share this information with the supplier, and how the supplier should act on this information. a. confidentiality b. intellectual property c. liability d. technology improvements e. governing law
D
The _____ clause of a contract stipulates the court of law where any disputes will be settled. a. third-party rights b. notices c. assignment and contracting d. governing law e. liability
D
The _____ contract is generally used in plant and equipment maintenance agreements, where the supplier cannot determine accurate costs prior to the repair service. a. fixed-price with redetermination b. firm fixed price c. cost-sharing d. time and materials e. cost plus fixed-fee
D
A/An _____ is a purchase contract that is made on a continuing basis for a specified or indefinite period of time, typically exceeding one year. a. one-time buy b. short-term contract c. spot contract d. long-term contract e. None of the above.
D
[A/An] _____ is a form of presentation, involving an exchange of information between managers from each organization involved in the dispute. a. mediation b. arbitration c. rent-a-judge d. mini trial e. dispute prevention
D
_____ involves spending more time in the initial contracting stages to fully understand stakeholder requirements, expectations, and repeated communication of expectations, to gain a full understanding of elements. a. Arbitration b. Mediation c. Contingency contracting d. Preventive contracting e. None of the above.
D
A _____ contract should be used in cases where the parties cannot accurately predict labor or materials costs and quantities to be used prior to the execution of the purchase agreement. a. fixed-price with escalation b. firm fixed price c. cost sharing d. cost-based e. fixed-price with redetermination
E
A/An _____ clause allows the buyer (and possibly the supplier) to terminate the contract if either side fails to live up to contractual requirements. a. penalty b. evergreen c. systems contract d. time and materials e. escape
E
A/An _____ is new intellectual property (such as tools, methodologies, and knowledge) developed as the result of the interaction between the enterprise and the consulting company. a. evergreen contract b. output c. good d. service e. residual
E
A/An _____ is nonbinding on either the buyer or the supplier and typically provides discounts to corporate buyers based on total volume for the corporation as a whole, not for any subunits individually. a. annual contract b. pricing agreement c. corporate agreement d. escape clause e. national buying agreement
E
All of the following are important factors to consider when negotiating with a supplier over contract type except _____. a. component market uncertainty b. degree of trust between buyer and seller c. process or technology uncertainty d. supplier's ability to impact costs e. physical distance between the buyer and supplier facilities
E
All of the following are major issues to be considered with respect to e-commerce contract issues except _____. a. parity between electronic and paper records b. enforceability of shrinkwrap, clickwrap, and boxtop agreements and licenses c. attribution procedures d. digital signatures e. location of the supplier's facility in relationship to the buyer's location
E
In [the] _____, a court refers a pending lawsuit between the parties to a private, neutral party who conducts a "trial" as though it were conducted in a real court. a. mediation b. mini trial c. dispute prevention d. arbitration e. rent-a-judge
E
The _____ clause in a contract stipulates that any benefits attributed to a third party (other than the buyer or supplier) identified in the contract must be enforced. a. governing law b. severability c. most favored customer d. assignment and contracting e. third-party rights
E
The _____ clause of a contract defines all of the important terms contained within the contract and is important so everyone understands exactly what each term means. a. supply and delivery b. specifications, quality, and health, safety, environment c. scope of agreement d. force majeure e. definitions
E
The _____ clause of a contract generally specifies who is responsible if there are injuries or damage, over the course of the contract, and any damages to be paid. a. supply and delivery b. key performance indicators and compensation c. definitions d. free trade areas e. liability
E
The _____ clause of a contract outlines the relationship between the Agreement and any other purchase orders issued by the company to the supplier. a. specifications, quality, and health, safety, environment b. most favored customer c. statistics d. effective date and termination e. purchase orders
E
The _____ clause of a contract specifies the terms for supply and delivery of the product or service. a. specifications, quality, and health, safety, environment b. scope of agreement c. payment d. confidentiality e. None of the above.
E
The use of [a/an] _____, or third party, to help settle contractual disputes is the fastest-growing method of conflict resolution among contracting parties, both in the United States and overseas. a. rent-a-judge b. litigation c. mediation d. mini trial e. outside arbitrator
E
Which of the following is not one of the basic levels of service that a systems supplier can provide to the buyer? a. Turnkey. b. Modular. c. Shared. d. All of the above. e. None of the above.
E
Which of the following is not one of the potential advantages of using long-term contracts? a. Assurance of supply. b. Volume leveraging. c. Access to cost/price information. d. Access to supplier technology. e. Supplier opportunism.
E
