SCMT 370 Ch.10

If identical bids are received, the buyer might choose to:

reject all bids and negotiate with one or more suppliers.

Accepting a price discount for ordering larger quantities leads to lower levels of anticipation inventory. True False

F

A payment bond protects the buyer against liens that might be granted to suppliers of material and labor to the bidder, in the event the bidder does not make proper payment to its suppliers. True False

T

The process for bidding in the public sector is generally similar to the private sector, although there are a few important differences. True False

T

The purchasing manager indexes (PMIs) are leading economic indicators derived from monthly surveys of purchasing managers about forecasted company conditions. True False

T

Labor and material costs are typically:

direct costs.

If the delivery date is some months or years away and if there is substantial chance of price escalation, a supplier may feel that there is far too much risk of loss to agree to sell under a:

firm-fixed-price (FFP).

Costs incurred in the operation of a production plant or process, but normally cannot be related directly to any given unit of production or service provided, are called:

indirect costs.

A cash discount allows:

the seller to secure prompt payment and the buyer to pay a lower price per unit.

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit, is commonly known as:

a fair price.