The Gwallter Reece Chihuahua Sweater Co. (GRCCo) was established in
2013. It recently signed a large contract with PetCo pet stores. GRCCo
will be required to track and forecast sweater sales by linking in to PetCo’s
sales database. GRCCo will then be responsible for shipping products to
PetCo as needed. The relationship between GRCCo and PetCo is an
example of
A) sales force automation.
B) electronic data interchange.
C) optical character recognition.
D) vendor-managed inventory.
A) sales force automation.
B) electronic data interchange.
C) optical character recognition.
D) vendor-managed inventory.
One of the basic activities in the expenditure cycle is the receiving and
storage of goods, supplies, and services. What is the counterpart of this
activity in the revenue cycle?
A) sales order entry process
B) shipping function
C) cash collection activity
D) cash payments activity
A) sales order entry process
B) shipping function
C) cash collection activity
D) cash payments activity
The traditional approach to inventory management to ensure sufficient
quantity on hand to maintain production is known as
A) safety stock.
B) just-in-time production.
C) economic order quantity.
D) optimal inventory quantity.
A) safety stock.
B) just-in-time production.
C) economic order quantity.
D) optimal inventory quantity.
Economic Order Quantity (EOQ) includes several variables that must be
taken into consideration when calculating the optimal order size. One
variable, the costs associated with holding inventory, is referred to as
A) ordering costs.
B) carrying costs.
C) the reorder point.
D) stockout costs.
A) ordering costs.
B) carrying costs.
C) the reorder point.
D) stockout costs.
The ________ specifies the point at which inventory is needed.
A) company inventory policies
B) reorder point
C) economic order quantity
D) stockout point
A) company inventory policies
B) reorder point
C) economic order quantity
D) stockout point
Which electronic files are either read or updated when goods are ordered
from a vendor?
A) inventory, vendors, and accounts payable
B) vendors and accounts payable
C) inventory, vendors, and open purchase orders
D) open purchase orders and accounts payable
A) inventory, vendors, and accounts payable
B) vendors and accounts payable
C) inventory, vendors, and open purchase orders
D) open purchase orders and accounts payable
What is a key feature of materials requirements planning (MRP)?
A) minimize or entirely eliminate carrying and stockout costs
B) reduce required inventory levels by scheduling production rather than
estimating needs
C) determine the optimal reorder point
D) determine the optimal order size
A) minimize or entirely eliminate carrying and stockout
costs
B) reduce required inventory levels by scheduling
production rather than estimating needs
C) determine the optimal reorder point
D) determine the optimal order size
Materials requirements planning (MRP)
A) reduces the uncertainty about when materials are needed, thereby
reducing the need to carry large levels of inventory.
B) is able to compute exactly the cost of purchasing by taking into account
all costs associated with inventory carrying.
C) requires vendors to deliver inventory to the production site exactly
when needed and in the correct quantities.
D) None of the above is correct.
A) reduces the uncertainty about when materials are
needed, thereby reducing the need to carry large levels of
inventory.
B) is able to compute exactly the cost of purchasing by
taking into account all costs associated with inventory
carrying.
C) requires vendors to deliver inventory to the production
site exactly when needed and in the correct quantities.
D) None of the above is correct.
________ attempts to minimize or eliminate carrying and stockout costs.
A) Just-in-time inventory
B) Materials requirements planning
C) Economic order quantity
D) Evaluated receipt settlement
A) Just-in-time inventory
B) Materials requirements planning
C) Economic order quantity
D) Evaluated receipt settlement
Just-In-Time (JIT) inventory is best characterized by
A) frequent deliveries of large quantities to be held at the work centers.
B) frequent deliveries of smaller quantities of items to the work centers.
C) less frequent deliveries of large quantities of goods to central receiving.
D) infrequent bulk deliveries of items directly to work centers.
A) frequent deliveries of large quantities to be held at the
work centers.
B) frequent deliveries of smaller quantities of items to the
work centers.
C) less frequent deliveries of large quantities of goods to
central receiving.
D) infrequent bulk deliveries of items directly to work
centers.
What is the key difference between the MRP and JIT inventory
management approaches?
A) Only JIT reduces costs and improves efficiency.
B) MRP is especially useful for products such as fashion apparel.
C) JIT is more effectively used with products that have predictable
patterns of demand.
D) MRP schedules production to meet estimated sales needs; JIT
schedules production to meet customer demands.
A) Only JIT reduces costs and improves efficiency.
B) MRP is especially useful for products such as fashion
apparel.
C) JIT is more effectively used with products that have
predictable patterns of demand.
D) MRP schedules production to meet estimated sales
needs; JIT schedules production to meet customer
demands.
When would an MRP inventory approach be a preferred to a JIT inventory
approach?
A) when a product has a short life cycle
B) when demand for inventory is fairly predictable
C) when demand for inventory is very unpredictable
D) MRP is always a preferred method over JIT.
A) when a product has a short life cycle
B) when demand for inventory is fairly predictable
C) when demand for inventory is very unpredictable
D) MRP is always a preferred method over JIT.
Which of the following is least likely to be a major criterion in vendor
selection?
A) prices of goods
B) credit rating of the vendor
C) quality of goods
D) ability to deliver on time
A) prices of goods
B) credit rating of the vendor
C) quality of goods
D) ability to deliver on time
Once a vendor is selected for a product, the vendor’s identity is recorded
in the
A) purchase requisition transaction file.
B) purchase requisition master file.
C) inventory transaction file.
D) inventory master file.
A) purchase requisition transaction file.
B) purchase requisition master file.
C) inventory transaction file.
D) inventory master file.
Duc An Incorporated provides free coffee to employees. Starbucks
delivers coffee packages, sugar, creamer, and filters each week. Every
month, Starbucks sends Duc An an invoice. This arrangement is best
described as a
A) set purchase order.
B) fixed purchase order.
C) blanket purchase order.
D) standard purchase order.
A) set purchase order.
B) fixed purchase order.
C) blanket purchase order.
D) standard purchase order.
A major cost in the purchasing function is the number of purchase orders
processed. One technique that may reduce purchasing-related expenses is
to have suppliers compete with each other to meet demand at the lowest
price. The name of this technique is
A) an EDI auction.
B) a trading exchange.
C) a reverse auction.
D) a supplier consortium.
A) an EDI auction.
B) a trading exchange.
C) a reverse auction.
D) a supplier consortium
Which of the following is generally not shown on a receiving report?
A) price of the items
B) quantity of the items
C) purchase order number
D) counted and inspected by
A) price of the items
B) quantity of the items
C) purchase order number
D) counted and inspected by
A receiving clerk notes that a delivery of 10 units has been received, but
the purchase order specified 12 units. A debit memo will need to be
prepared to adjust for the difference between the quantity ordered and
received. Who should prepare this document?
A) the receiving clerk
B) the controller
C) the vendor
D) the purchasing department manager
A) the receiving clerk
B) the controller
C) the vendor
D) the purchasing department manager
Identify in which of the following scenarios a company could adjust the
balance due the vendor by issuing a debit memo.
A) quantity different from that ordered
B) damage to the goods
C) goods that fail inspection for quality
D) All of the above are possible scenarios.
A) quantity different from that ordered
B) damage to the goods
C) goods that fail inspection for quality
D) All of the above are possible scenarios.
What is one of the best ways to improve the overall efficiency and
effectiveness of the receipt and storage of ordered items?
A) requiring all suppliers to have the carrier verify quantities and item
numbers before shipment
B) requiring all suppliers to include RFID tags on their items
C) requiring all suppliers to use EDI to expedite the receiving department
function
D) requiring all delivery trucks to have satellite data terminals to expedite
the receiving department function
A) requiring all suppliers to have the carrier verify
quantities and item numbers before shipment
B) requiring all suppliers to include RFID tags on their
items
C) requiring all suppliers to use EDI to expedite the
receiving department function
D) requiring all delivery trucks to have satellite data
terminals to expedite the receiving department function
Vendor invoices are approved by the ________, which reports to the
________.
A) purchasing department; controller
B) accounts payable department; treasurer
C) purchasing department; treasurer
D) accounts payable department; controller
A) purchasing department; controller
B) accounts payable department; treasurer
C) purchasing department; treasurer
D) accounts payable department; controller
The disbursement voucher and supporting documents are sent to the
________ for payment prior to the due date.
A) cashier
B) treasurer
C) controller
D) accounts payable department
A) cashier
B) treasurer
C) controller
D) accounts payable department
A(n) ________ system posts an approved invoice to the vendor account
A) nonvoucher
D) All of the above are correct.
A) electronic data interchange.
B) vendor-managed inventory.
C) sales force automation.
D) optical character recognition.
C) alarm clocks.
D) motor oil.