A good rule of thumb is to remember that purchasers must always act in the best
interests of their employer.
a. True
b. False
Exempt carriers are highly regulated economically by the Surface Transportation Board.
a. True
b. False
Although a quantity discount has a positive effect on the purchase price, a buyer need
not be cautious about the net impact on the total cost of an item.
a. True
b. False
A major benefit of multiple sourcing is a lower price that results from the higher
volumes offered to a supplier.
a. True
b. False
Learning curve analysis is appropriate when a supplier uses a new production process
or produces an item for the first time.
a. True
b. False
A/An _____ is a purchase contract that is made on a continuing basis for a specified or
indefinite period of time, typically exceeding one year.
a. one-time buy
b. short-term contract
c. spot contract
d. long-term contract
e. None of the above.
When it comes time to create an information system around business processes, few
companies discover that they must also reengineer or change their business processes
before they can build an information system around them.
a. True
b. False
[A/An] _____ is created by buyers from various businesses to pool their buying power
together in order to reduce prices.
a. kanban
b. purchasing consortium
c. collaborative buyer-supplier relationship
d. reverse auction
e. zero-based budgeting
If the primary purpose of the contract is legal, but some terms contained within the
contract are not, then the contract may or may not itself be illegal depending on the
seriousness of the illegal terms and the degree to which the legal and illegal terms can
be separated.
a. True
b. False
Executive management sets the ethical code of behavior within a firm.
a. True
b. False
Big data and analytics will play an increasingly important role in purchasing and supply
chain management.
a. True
b. False
Supplier performance that is sufficient today should be competitive in the marketplace
of tomorrow.
a. True
b. False
A _____ is an operating instruction detailing functional duties or tasks.
a. policy
b. procedure
c. work rule
d. guideline
e. policy manual
_____ allows a buying organization to react more quickly when supply chain risk
events occur by already having previously prepared plans and proposed responses in
place in advance of the actual risk event.
a. Hedging
b. Use of third party intermediaries
c. Multiple sourcing
d. Scenario analysis
e. None of the above.
A _____ is one that requires members to use a variety of higher-level skills, supports
giving members regular feedback about performance, results in an outcome with a
significant effect on the organization and others outside the team, and provides
members autonomy for deciding how they will do the work.
a. gray box design
b. statement of work
c. technology roadmap
d. meaningful task
e. traditional buyer-supplier relationship