Supply Chain Management Exam 2

The sourcing strategies including; maintaining safety and/or strategic stocks, developing contingency plans, strengthening relationships, and searching for alternatives, are appropriate for which item category?

Bottleneck Items

What is the term that is often used for the acquisition of services?

Contracting

A strong supplier partnership requires that both buyer and supplier adopt a strong tactical perspective

False

An effective supplier certification program may increase the time spent on incoming inspections

False

Award-winning suppliers serve as role models for other suppliers and may, therefore, be exempt from audits and certification programs

False

LEAN production is an operating philosophy or mindset that attempts to minimize the impact of supply variability and flaws in forecasting through the use of safety stock inventories.

False

While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices

False

The concept of Distributive Negotiations refers to both sides work together to maximize the outcome or create a win-win result.

False It refers to a process that leads to self-interested, one-sided outcome

The Profit-Leverage Effect states that a decrease in purchasing expenditures will directly decrease profit

False. The Profit-Leverage Effect states that a decrease in purchasing expenditures directly increases profit before taxes (assuming no decrease in quality or purchasing total cost).

A purchase order is legally binding once issued by the buyer

False. It becomes a legally binding contract only when accepted by the supplier.

The purchasing function is one of the most value-enhancing functions in any organization, and therefore, it is not necessary to periodically monitor the purchasing function's performance against a set of standards or industry benchmarks.

False. The purchasing function in an organization is frequently responsible for Supply Management and therefore plays a large part in the amount of inventory the company holds.

Industrial Buyers

Individuals within an organization who purchase raw materials for conversion into products, and/or purchase services, capital equipment, and MRO supplies.

Total Cost of Manufacturing include the following:

Manufacturing and Procurement activities Inventory and Warehousing activities Transportation activities

What company originated the concept of Six Sigma?

Motorola

All of the following are included in the eight wastes EXCEPT?

Overspending

The process commonly utilized in continuous improvement is known as?

Plan, Do, Check, Act

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as?

Strategic Sourcing

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as?

Supplier Certification

procurement

The process of selecting and vetting suppliers, negotiating contracts, establishing payment terms, and the actual purchasing of goods and services.

The sum of all costs associated with every activity in the supply stream of a product, is referred to as?

Total Cost of Ownership

A management philosophy based on the principle that every employee must be committed to maintaining high standards of work in every aspect of a company's operations is called ?

Total quality management

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network.

True

A Supplier Code of Conduct is intended to inform suppliers of ethical sourcing expectations and is typically a condition for becoming an approved supplier.

True

Collaborative Negotiations - Both sides work together to maximize the outcome or create a win-win result. Requires open discussions and a free-flow of information between parties.

True

Duties, taxes, or customs imposed by the host country for imported or exported goods, are known as Tariffs

True

Outsourcing allows a firm to concentrate on core capabilities and reduce staffing levels

True

Pain and Gain Share contract provisions are associated with supplier rewards and recognition programs.

True

Successful supplier relationships involve equal decision-making control between both the buyer and the supplier.

True

The primary design objective of a LEAN layout is to reduce wasted movements of workers and/or materials.

True

The following term refers to an act that creates the greatest good for the greatest number of people?

Utilitarianism

Which one of the following is among the most important elements of the LEAN manufacturing philosophy?

Waste reduction and continuous improvement

ISO 14000 is a widely accepted management and quality certification standard

False

The keys to developing successful supply partnerships include all of the following:

- Personal relationships - Mutual benefits and needs - Performance metrics

An outsourcing program can result in all of the following positive outcomes:

- Reducing staffing levels - Cost reduction - Gains in manufacturing flexibility

The best supplier candidates for Supplier Relationship Management (SRM) include all of the following:

- They provide high volumes of a product/service - They provide lesser quantities of a crucial product/service - They serve many business units of a company or organization - Where intensive engineering, manufacturing and/or logistics interaction is essential

Benefits derived from implementing an e-procurement system include all of the following:

- Time savings - Real time access - Trackability

VMI stands for Vendor-Managed Inventory

True

Term used in business to describe the in-depth process of capturing internal and external customer's expectations, preferences, likes, and dislikes

Voice of Customer

Merchants

Wholesalers and retailers who purchase for resale

purchase requisition

a document that communicates needs between the user and supply management

Institute of Supply Management (ISM)

defines supply management as the "Identification, acquisition, access, positioning, and management of resources an organization needs or potentially needs in the attainment of its strategic objectives."

LEAN regularly results in: the following benefits EXCEPT?

Increased inventory

E-procurement

The business-to-business (B2B) purchase and sale of supplies and services over the Internet.

Benefits of implementing an effective supplier certification program include all of the following:

- Build long-term relationships - Reducing time spent on incoming inspections - Recognizing excellence

Which of the following are the primary goals of Purchasing?

- Ensure the uninterrupted flow of materials and services at the lowest total cost - Improve the quality of the finished goods produced - Optimize customer satisfaction

Which of the following would be a good reason to outsource (buy) versus make an item?

A firm lacks the technology or expertise to produce an item

Which of the following is NOT one of the "Seven Tools of Quality Control"

Small Batch Scheduling

Purchase Order (PO)

is an external commercial document external commercial document. It is the official offer issued by a buyer to a seller to acquire goods or services.