80) Which of the following characterizes organizational buyer-seller relationships?
A) Purchases are often made after brief negotiations.
B) Purchases are usually of small dollar values.
C) Long-term contracts are often prevalent.
D) Reciprocal arrangements are prohibited by the federal government.
E) Delivery schedules are largely irrelevant.
81) Which of the following characterizes organizational buyer-seller relationships?
A) Purchases are often made after brief negotiations if any.
B) Supply partnerships may eventually develop.
C) Short-term contracts are often prevalent.
D) Reciprocal arrangements provide the most flexibility to buyer and seller.
E) Delivery schedules are less important than production capacity.
82) The existence of reciprocal arrangements, the long-term contracts, and the buyer-seller
relationships that can evolve into supply partnerships, are all examples of
A) illegal activities that are a common weakness of organizational buying.
B) illegal activities that result from collusion between buyers and sellers.
C) activities that are strictly governed by the NAICS.
D) the nature of relationships between buyers and sellers in organizational buying.
E) activities that result from extreme competition between manufacturers when there are too few
suppliers.
83) Merrill Lynch and Thompson Financial had a three-year, $1 billion project that put
workstations on the desks of 25,000 of Merrill Lynch’s brokers. These machines put the world of
investing information at brokers’ fingertips. Thompson, the supplier, was obliged to not only
deliver technology and services on time and on budget, but also constantly improve customer-
satisfaction levels among Merrill Lynch’s brokers and customers. This is an example of
A) a reciprocity agreement.
B) exclusive dealing.
C) supplier alliance.
D) a buyer-seller relationship.
E) a tying arrangement.
84) An industrial buying practice in which two organizations agree to purchase each other’s
products and services is referred to as
A) a tying arrangement.
B) exclusive dealing.
C) reciprocity.
D) a supply partnership.
E) noncompetitive bidding.
85) In a buyer-seller relationship, reciprocity refers to
A) the practice whereby a seller requires the purchaser of one product to buy another item in the
line.
B) an industrial buying practice in which two organizations, in this case a manufacturer and a
supplier, agree to purchase each other’s products and services.
C) an arrangement a manufacturer makes with a reseller to only handle its products and not those
of competitors.
D) the illegal practice of refusing to purchase a seller’s products unless the seller agrees not to
purchase that product or any similar products from any other buyer.
E) when a supplier requires a buyer purchasing some of its products to also buy others.
86) The practice of ________, which can affect the normal operation of the free market and limit
the flexibility of buyers, is disapproved of by the U.S. Justice Department.
A) tying agreements
B) just-in-time procurement
C) quid pro quo
D) supply partnerships
E) reciprocity
87) Although not strictly illegal, the U.S. Justice Department frowns on reciprocity because the
practice
A) gives an unfair advantage to smaller companies.
B) gives an unfair advantage to larger corporations.
C) reduces the amount of taxes paid by the parties involved.
D) restricts the normal operation of the free market.
E) encourages free trade.
88) Although the U.S. Justice Department frowns on ________ because it restricts the normal
operation of a free market, it is still legal for two companies to have an agreement to buy one
another’s products.
A) reciprocity
B) tying agreements
C) just-in-time procurement
D) quid pro quo
E) supply partnerships
89) If General Motors (GM) purchases Borg-Warner transmissions, and Borg-Warner buys
trucks and cars from GM, they would be demonstrating which type of buyer-seller interaction?
A) exclusive dealing
B) supply partnerships
C) tying arrangements
D) noncompetitive bidding
E) reciprocity
90) A ________ exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost or increasing the value of products
and services delivered to the ultimate consumer.
A) supplier development agreement
B) reciprocal arrangement
C) shareholder relationship
D) supply partnership
E) strategic alliance
91) A supply partnership refers to
A) an arrangement a manufacturer makes with a reseller to handle only its products and not those
of competitors.
B) the illegal practice of refusing to purchase a seller’s products unless the seller agrees not to
purchase that product or any similar products from any other buyer.
C) a supplier that requires a buyer purchasing some products from it to also buy others.
D) a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives,
policies, and procedures for the purpose of lowering the cost of or increasing the value of
products and services delivered to the ultimate consumer.
E) the practice whereby a seller requires the purchaser of one product to also buy another item in
the line.
92) A supply partnership exists when a buyer and its supplier adopt mutually beneficial
objectives, policies, and procedures for the purpose of
A) putting competitors of both buyers and sellers out of business.
B) lowering costs and increasing profits for the supplier.
C) lowering costs or increasing value of products or services to the ultimate consumer.
D) creating a single channel of distribution.
E) creating an exclusionary relationship from all other buyers and sellers.
93) Milsco Manufacturing markets ________ in partnership with its customers like Harley-
Davidson.
A) motors
B) braking systems
C) transmissions
D) seats
E) customized wheels
94) Milsco Manufacturing emphasizes
A) signing lifetime contracts with suppliers to demonstrate its loyalty to them.
B) supplier partnerships when designing products for its customers.
C) reciprocity arrangements with its customers so that each can maximize profit.
D) co-branding as a form of supply partnerships with customers.
E) extending health care benefits to its suppliers’ employees as a result of the Affordable Care
Act.
95) Apple Inc. custom-orders the microprocessors for its iMac, iPhone, and iPad. Intel makes
chips for the iMac, and Samsung produces Apple-designed chips for the iPhone and iPad. Intel
and Samsung work with Apple to minimize costs for each type of chip while maximizing quality,
ultimately giving customers good value for their money. These are examples of
A) symbiotic partnerships.
B) make-buy decisions.
C) reciprocal agreements.
D) supply partnerships.
E) exclusive dealings.
96) Walmart asked that Procter & Gamble (P&G) electronically link to its computerized cash
register scanning system, allowing for direct electronic ordering and replenishing for all of its
stores. This way, Walmart can tell P&G what merchandise it needs, along with how much, when,
and to which store to deliver on a daily basis. Walmart is engaged in
A) ISO 9000 certification.
B) ISO 14000 certification.
C) a supply partnership.
D) sustainable development.
E) cause marketing.
97) Purchasing that aims to integrate environmental considerations into all stages of an
organization’s buying process with the goal of reducing the impact on human health and the
physical environment is referred to as
A) ecological procurement.
B) sustainable procurement.
C) green marketing.
D) supplier partnership.
E) stakeholder procurement.
98) Because many companies are concerned with the depletion of natural resources, supply
partnerships often include provisions for
A) green marketing.
B) regulatory exemptions.
C) stakeholder procurement.
D) ecological procurement.
E) sustainable procurement.
99) Starbucks purchases from coffee growers located in more than 20 countries. It pays the
coffee farmers a fair price for the beans, the coffee is grown in an ecologically sound manner,
and Starbucks invests in the farming communities where its coffees are produced. This is an
example of
A) green marketing.
B) ISO 14000 certification.
C) sustainable procurement.
D) ecological procurement.
E) cause marketing.
100) Starbucks is using its purchasing power to continue its quest to reduce its energy usage.
Recently, the company announced plans to replace all of the traditional incandescent and halogen
bulbs in its stores worldwide with more efficient light-emitting diode (LED) bulbs—a move the
company claims will enable it to cut energy consumption in its stores by up to 7 percent.
Starbucks would be considered a leader in
A) ISO 9000 certification.
B) sustainable procurement.
C) cause marketing.
D) ecological procurement.
E) sustainable development.
101) Recently, Matt Kistler, a senior vice president at Walmart, claimed the company was
making progress on achieving three major goals: (1) to be supplied by 100 percent renewable
energy, (2) to create zero-waste, and (3) to increase the sale of renewably produced products.
Walmart is focusing on
A) using ecological buying centers.
B) complying with government regulations.
C) engaging in cause marketing.
D) increasing its sustainable procurement.
E) meeting ISO 9000 standards.
102) The decision-making process that organizations use to establish the need for products and
services and identify, evaluate, and choose among alternative brands and suppliers is referred to
as
A) the consumer purchase decision process.
B) the industrial purchase procedure.
C) organizational buying behavior.
D) the offering purchase framework.
E) the sustainable procurement process.
103) Organizational buying behavior is
A) the actions consumers take in purchasing and using products and services, including the
mental and social processes that come before and after the action.
B) the decision-making process that organizations use to establish the need for products and
services and identify, evaluate, and choose among alternative brands and suppliers.
C) purchase behavior based upon derived demand.
D) determining what to purchase and the quantity to purchase based upon the derived supply.
E) the process that organizations use to purchase the raw materials and tools used in the
manufacturing of a product.
104) In organizations, the buying function involves gathering and screening information about
products and services, prices, and suppliers, which are known as
A) agents.
B) procurement sources.
C) resellers.
D) shops.
E) vendors.
105) Organizational buying behavior is similar to consumer behavior in some ways and different
in others. Common to both is that they
A) use the same five stages in the buying decision process.
B) use formal vendor ratings when choosing among alternative brands.
C) are affected by derived demand.
D) have virtually unlimited options for suppliers.
E) rely on gatekeepers to control product information.
106) Which of the following possible characteristics of consumer buying is least likely to enter
into an organizational buying decision?
A) comparison of product performance with expectations
B) purchase decisions based on the highest overall evaluation
C) alternatives evaluated on important criteria
D) information gathered from internal and external searches
E) problem recognition triggered by self-actualization motives
107) Organizational buying behavior is similar to consumer behavior in some ways and different
in others. One key difference is that in the organizational buying process,
A) only four stages are used.
B) fewer individuals are involved.
C) firms are not affected by derived demand.
D) the postpurchase evaluation behavior is more formalized.
E) there is less reliance on gatekeepers to control product information.
108) The first stage in the organizational buying decision process is
A) information search.
B) antecedent states.
C) alternative evaluation.
D) purchase decision.
E) problem recognition.
109) The sales department’s identification of an improvement made to a competitor’s product
would occur during which stage of the organizational buying decision process?
A) supplier search
B) alternative evaluation
C) problem recognition
D) purchase decision
E) information search
110) Once an organization passes through the problem recognition stage of the organizational
buying decision process, it reaches the ________ stage.
A) information search
B) value analysis
C) alternative evaluation
D) purchase decision
E) behavioral learning
111) At which stage of the organizational buying decision process would design and production
engineers draft specifications?
A) problem recognition
B) information search
C) alternative evaluation
D) purchase decision
E) value analysis
112) At which stage of the organizational buying decision process would purchasing and
engineering personnel visit potential suppliers to assess their facilities, production capability, and
quality control?
A) problem recognition
B) information search
C) purchase decision
D) alternative evaluation
E) post-purchase behavior
113) At which stage of the organizational buying decision process would purchasing assess the
financial status of potential suppliers?
A) problem recognition
B) information search
C) alternative evaluation
D) purchase decision
E) post-purchase behavior
114) At which stage of the organizational buying decision process would a firm use key
organizational buying criteria such as price, quality, delivery time, and technical capability to
select a supplier?
A) problem recognition
B) information search
C) purchase decision
D) purchase review
E) alternative evaluation
115) During the next-to-last stage of the organizational buying decision process, the organization
A) drafts specifications.
B) formally rates suppliers that were used.
C) evaluates supplier facilities.
D) awards the contract.
E) recognizes a need for change.
116) Which of the following is indicative of the purchase decision stage of the organizational
buying decision process?
A) The purchase decision is usually quick once the information search has been completed.
B) Even after the bid is submitted and even once accepted, terms must still be negotiated.
C) Even if several vendors make it onto the bidder’s list, ultimately only one supplier is chosen.
D) If a supplier on the bidder’s list is not selected, it is rarely told the reason it was rejected.
E) Once an agreement has been formally reached, neither the buyer nor the seller is permitted to
make changes to the terms of the contract.
117) What is the last stage of the organizational buying decision process?
A) information search
B) postpurchase behavior
C) alternative evaluation
D) purchase decision
E) purveyor review
118) Comparing the stages in a consumer and organizational purchase decision process reveals
key differences. In organizations, the ________ stage is more formal, often involving a vendor
rating system.
A) problem recognition
B) information search
C) purchase decision
D) postpurchase evaluation
E) performance review