_____ is the avoidance of nonconformance in products and services by not allowing
errors or defects to occur in the first place.
a. Detection
b. Inspection
c. Prevention
d. The hidden factory
e. Optimization
Experienced negotiators do not need to understand their counterparts through research
and experience.
a. True
b. False
Decentralized purchasing personnel should gain a greater understanding and
appreciation of local operating requirements.
a. True
b. False
All of the following are common signaling methods used in a kanban system except
_____.
a. single-card system
b. color coding of containers
c. designated storage spaces
d. computerized bar coding systems
e. verbal notification
A serious problem in measurement is that the data that managers pay attention to are
often the wrong data.
a. True
b. False
_____ stems from the instructions and granting of authority to the purchasing manager
via the job description provided by the employer.
a. Apparent authority
b. Fiduciary responsibility
c. Mutual assent
d. Personal liability
e. Actual authority
A buyer must focus intently on determining an acceptable initial price because over the
course of the long-term contract the price adjustment mechanism will use the initial
price as the base for future adjustments.
a. True
b. False
_____ is a way to achieve continuous performance improvement in an item, product, or
service, but it is not a technique for cheapening a product or service by lowering quality
or other performance attributes below what customers expect.
a. Make-buy analysis
b. Total cost analysis
c. Price analysis
d. Cost analysis
e. Value analysis
Buyers cannot move too aggressively when reducing the supply base.
a. True
b. False
A _____ is a key individual or unit that controls substantial indirect spending and
typically has a position of great responsibility within the organization.
a. purchasing consortium
b. maverick spender
c. 3PL
d. power spender
e. kanban
There is an incentive, at least in the short run, for suppliers to be inefficient in
cost-based contracts because they are rewarded with higher prices.
a. True
b. False
The challenge today for location of authority is to know which activities, processes, and
tasks to control or coordinate centrally and which to assign to operating units.
a. True
b. False
In a PERT network, the difference between the _____ and the _____ is slack.
a. late finish¦.early finish
b. late start¦.late finish
c. early finish¦.late start
d. early start¦.early finish
e. None of the above.
Once a long-term contract with a supplier has been executed, it is much more difficult
(and expensive) to switch suppliers.
a. True
b. False
As the total dollar value/unit cost of the contract decreases, purchasers must spend more
effort creating effective pricing mechanisms.
a. True
b. False
When firms produce goods in anticipation of future customer orders, they are operating
in a just-in-time environment.
a. True
b. False
An abundance of competitors and choices have conditioned customers to want higher
quality, faster delivery, and products and services tailored to their individual needs at a
higher total cost.
a. True
b. False