Chapter 17 — Purchasing Services
61. Which of the following is not one of the common examples of indirect spend?
a.
Professional and consulting services.
b.
Employee benefits.
c.
Travel.
d.
Maintenance, repair, and operating supplies.
e.
Production components.
62. _____ is defined by CSCMP as that part of supply chain management that plans, implements, and controls
the efficient, effective forward and reverse flow and storage of goods, services, and related information between
the point of origin and the point of consumption to meet customers’ requirements.
a.
b.
c.
d.
e.
63. Which of the following is not one of the major transportation service linkages throughout a typical supply
chain?
a.
Production planning.
b.
Inbound logistics
c.
Intraorganizational movements.
d.
Outbound logistics.
e.
Recovery and recycling.
64. _____ includes movement and handling of materials between production facilities within the same
organization as well as movement into and out of intermediary storage facilities.
a.
Inbound logistics
b.
Recovery
c.
Outbound logistics
d.
Intraorganizational movement
e.
Recycling
65. _____ represents the link between a company and its customers.
a.
Inbound logistics
b.
Intraorganizational movement
c.
Reverse logistics
d.
Outbound logistics
e.
Recovery and recycling
66. Freight shipped _____ means the supplier retains title to the goods and controls the shipment until it is
physically received and off-loaded at the consignee’s dock.
a.
FOB carrier
b.
FOB origin
c.
FOB destination
d.
FOB in transit
e.
None of the above
67. When freight is shipped _____, the buyer, or consignee, is responsible for choosing the carrier, arranging for
the physical movement of the goods, paying the freight bill, and filing loss and damage claims.
a.
FOB destination
b.
FOB origin
c.
FOB delivered
Chapter 17 — Purchasing Services
d.
FOB supplier
e.
None of the above.
68. All of the following are criteria used to measure transportation performance except _____.
a.
speed
b.
reliability
c.
capability
d.
accessibility
e.
operator hours of service
69. _____ refers to the accuracy and on-time consistency of the transportation service, arriving neither late nor
early.
a.
Reliability
b.
Capability
c.
Accessibility
d.
Total cost
e.
Speed
70. _____ refers to a mode’s or carrier’s ability to provide the proper equipment and provide the appropriate
services for a given product movement.
a.
Accessibility
b.
Capability
c.
Speed
d.
Total cost
e.
Reliability
71. _____ refers to a mode’s or carrier’s ability to provide service over a geographic area.
a.
Speed
b.
Capability
c.
Total cost
d.
Accessibility
e.
Reliability
72. Which of the following is not one of the advantages of motor carrier over other modes of transportation?
a.
High flexibility.
b.
Good reliability.
c.
Good for JIT delivery.
d.
Good speed.
e.
Low cost.
73. Which of the following is not one of the disadvantages of motor carrier over other modes of transportation?
a.
High cost.
b.
Limited to domestic or regional transportation.
c.
Very long lead times.
d.
Cannot be used for large volumes.
e.
None of the above.
74. Which of the following is not one of the advantages of rail carrier over other modes of transportation?
a.
Lower cost.
b.
Good for expediting/emergency situations.
c.
Can handle a wide range of items.
Chapter 17 — Purchasing Services
d.
Piggyback service can increase flexibility.
e.
Direct between major cities.
75. Which of the following is not one of the disadvantages of rail carrier over other modes of transportation?
a.
Seasonal availability.
b.
Limited access to rail line.
c.
Longer in-transit lead times.
d.
Less flexible – may not have rails to all locations.
e.
Limited access to rail spur.
76. Which of the following is not one of the advantages of air carrier over other modes of transportation?
a.
Quick and reliable.
b.
Good for light/small, high-value shipments.
c.
Good for expediting/emergency situations.
d.
Low cost.
e.
None of the above.
77. Which of the following is not one of the disadvantages of air carrier over other modes of transportation?
a.
Very high cost.
b.
Location of large airports limits shipping points.
c.
Seasonal availability.
d.
Cannot be used for large, bulky, or hazardous shipments.
e.
None of the above.
78. Which of the following is not one of the advantages of water carrier over other modes of transportation?
a.
Good for bulk commodities (inland).
b.
High flexibility.
c.
Good for heavy, large items (international).
d.
Can handle most types of freight.
e.
Low cost.
79. Which of the following is not one of the disadvantages of water carrier over other modes of transportation?
a.
Limited flexibility.
b.
Seasonal availability.
c.
Very long lead times.
d.
Poor reliability.
e.
Cannot be used for large volumes.
80. Motor carriers are characterized by _____ variable costs, while rail carriers have comparatively _____ fixed
costs.
a.
higher….high
b.
lower….high
c.
higher….low
d.
lower….low
e.
There is no difference in variable and fixed costing between motor and rail carriers.
81. The total cost structure of _____ is similar to _____ as the equipment, rights-of-way, and physical structure
have a high fixed cost and a low variable operating cost.
a.
motor carriers….air carriers
b.
motor carriers….pipelines
c.
water carriers….rail carriers
Chapter 17 — Purchasing Services
d.
pipelines….rail carriers
e.
Cannot determine from the above information.
82. By law, a/an _____ must serve the general public without discrimination based on published rates for
specific goods.
a.
contract carrier
b.
private carrier
c.
common carrier
d.
motor carrier
e.
intermodal carrier
83. A/An _____ serves the transportation requirements of the party with which it has a legal agreement and
provides only those services that have been negotiated with the shipper at a mutually agreed upon price.
a.
intermodal carrier
b.
private carrier
c.
common carrier
d.
exempt carrier
e.
contract carrier
84. A/An _____ is a manufacturer or distributor that controls and manages its own transportation equipment,
whether owned or leased.
a.
common carrier
b.
private carrier
c.
contract carrier
d.
intermodal carrier
e.
exempt carrier
85. A/An _____ involves picking smaller amounts of materials from a series of nearby suppliers to be used in a
just-in-time or lean manufacturing environment.
a.
common carrier
b.
exempt carrier
c.
milk run
d.
private carrier
e.
contract carrier
86. The presence of _____ ensures a supply of available transportation in markets where only one-way traffic
exists.
a.
exempt carriers
b.
one-way carriers
c.
common carriers
d.
motor carriers
e.
All of the above
87. In order for _____ to work, both the buyer and the logistics service provider must explicitly agree as to what
the buyer’s desired outcomes, goals, and objectives are and how the logistics service provider can help meet
them.
a.
PBL
b.
MRO
c.
TQM
d.
TCO
e.
KPIs
88. Which of the following is not an advantage of using a 3PL?
a.
Economies of scale and increased flexibility.
b.
Improve service performance levels.
c.
Loss of dedicated in-house managed staff.
d.
Release capital from sale of assets.
e.
Concentrate on core business activities.
89. Which of the following is not an advantage of using a 3PL?
a.
Economies of scale and increased flexibility.
b.
Improve service performance levels.
c.
Loss of dedicated in-house managed staff.
d.
Release capital from sale of assets.
e.
Concentrate on core business activities.
90. Which of the following is not a disadvantage of using a 3PL?
a.
Relinquish control, ownership, and expertise.
b.
Loss of integration between sales and supply.
c.
Loss of dedicated in-house managed staff
d.
Concentrate on core business activities.
e.
Sacrifice key business service differentiation.
91. All of the following are types of information a 3PL should provide to the buyer except _____.
a.
choice of mode
b.
number of carriers providing inbound, intraorganizational, and outbound transportation services
c.
total transportation expenditures by specific carrier and mode of transportation
d.
breakdowns of volumes by commodity or type of material
e.
percentage of shipments arranged by suppliers versus by buyers
92. A/An _____ system provides status alerts, via e-mail, fax, pager, and so on, to a buyer or salesperson that a
particular shipment has been delayed and that this may affect other entities in the supply chain.
a.
event-based
b.
MRP
c.
ERP
d.
DRP
e.
None of the above.
Easy
Analytic
93. _____ can be defined as that amount of an organization’s total procurement budget that is purchased from
unauthorized sources.
a.
Indirect spend
b.
Direct spend
c.
PBL
d.
E-commerce
e.
Maverick spend
Easy
Analytic
94. [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
Easy
Analytic
Moderate
Analytic
95. 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
Easy
Analytic
96. Which of the following is not a key part of a project’s scope?
a.
Project deliverables.
b.
Milestones and guidelines.
c.
Service provider’s background and experience.
d.
Budget.
e.
Rewards and penalties.
Easy
Analytic
97. Which of the following is not an advantage of centralizing professional service procurement?
a.
Increase the accountability of outside consultants to the buyer by increasing the monitoring and
auditing of services provided.
b.
Lead to the ability to reduce the number of professional service providers.
c.
Reduce service provider redundancy.
d.
Reduce the likelihood of unnecessary charges.
e.
Improve the working relationship between internal user and professional service provider.
Moderate
Analytic
98. _____ can be defined as how easy the professional service provider is to do business with.
a.
Wavelength
b.
Collaboration
c.
Cooperation
d.
Preference
Chapter 17 — Purchasing Services
e.
None of the above.