Chapter 2 — The Purchasing Process
Easy
Analytic
46. Which of the following is not one of the common ways that internal customers should communicate their needs to
purchasing?
a.
Purchase requisitions from internal users.
b.
Chance meeting in the company cafeteria.
c.
Forecasts and customer orders.
d.
Material requirements identified during new-product development.
e.
Routine reordering systems.
Easy
Analytic
47. All of the following are required elements in a purchase requisition except _____.
a.
b.
c.
d.
e.
Easy
Analytic
48. When marketing wants to purchase an advertising media campaign, the _____ should specify the work that is to be
completed, when it is needed, and what type of service provider is required.
a.
reorder point
b.
acknowledgement
c.
traveling purchase requisition
d.
statement of work
e.
sales forecast
Easy
Analytic
49. In a _____, when inventory is depleted to a given level, the system notifies the materials control department (or the
Chapter 2 — The Purchasing Process
buyer in some organizations) to issue a request to a supplier for inventory replenishment.
a.
reorder point system
b.
traveling purchase requisition system
c.
customer service system
d.
forecasting system
e.
just-in-time system
Easy
Analytic
50. A _____ involves the physical checking of inventory to verify that system records match actual on-hand inventory
levels.
a.
reorder point system
b.
stock check
c.
just-in-time system
d.
forecasting system
e.
p-card system
Easy
Analytic
51. _____ is used when a product or service is proprietary or when there is a perceived advantage to using a particular
supplier’s products or services.
a.
Description by market grade
b.
Description by industry standard
c.
Description by specification
d.
Description by performance characteristics
e.
Description by brand
Easy
Analytic
52. _____ is might be the best choice for standard items, where the requirements are well understood and there is common
agreement between supply chain partners about what certain terms mean.
a.
Description by market grade
b.
Description by brand
c.
Description by performance characteristics
d.
Use of prototypes
e.
Description by specification
Chapter 2 — The Purchasing Process
53. _____ can cover such characteristics as the materials used, the manufacturing or service steps required, and even the
physical dimensions of the product.
a.
Description by market grade
b.
Description by specification
c.
Description by brand
d.
Description by industry standard
e.
Description by performance characteristics
54. _____ focuses attention on the outcomes the customer wants, not on the precise configuration of the product or
service.
a.
Description by industry standard
b.
Description by brand
c.
Description by specification
d.
Description by performance characteristics
e.
Description by market grade
55. A/An _____ has demonstrated its performance capabilities through previous purchase contracts and therefore receives
preference during the supplier selection process.
a.
internal supplier
b.
new supplier
c.
capable supplier
d.
final supplier
e.
preferred supplier
56. All of the following are conditions under which competitive bidding is effective except _____.
a.
the buyer has a preferred supplier for the item
b.
volume is high enough to justify this method
c.
the marketplace is competitive
d.
the specifications or requirements are clear to the seller
e.
adequate time is available for suppliers to evaluate the RFQs
Bloom’s: Remembering
57. Which of the following is not one of the conditions under which negotiation is effective?
a.
When the purchase requires agreement about a wide range of performance factors, such as price, quality,
delivery, risk sharing, and product support.
b.
When the buyer requires early supplier involvement.
c.
When the specifications or requirements are clear to the seller.
d.
When the supplier cannot determine risks and costs.
e.
When the supplier requires a long period of time to develop and produce the items purchased.
Bloom’s: Remembering
58. Which of the following is not an appropriate performance criterion to be used when evaluating suppliers?
a.
Ability to develop process and product technology.
b.
Commitment to quality.
c.
Management capability and commitment.
d.
Cost performance.
e.
Commitment to effective marketing and promotion.
Bloom’s: Understanding
59. Good reasons for allowing other departments to view purchase orders and incoming receipts does not include which of
the following?
a.
The accounting department gains visibility to future accounts payable obligations.
b.
The requestor can refer to the purchase order number when inquiring into the status of an order.
c.
Receiving has a record of the order to match against the receipt of the material.
d.
Traffic becomes aware of inbound delivery requirements and can make arrangements with carriers or use the
company’s own vehicles to schedule material delivery.
e.
There is never a good reason for purchasing to allow other departments access to purchase orders and
Chapter 2 — The Purchasing Process
incoming receipts due to the confidential nature of the price and delivery terms.
Moderate
Bloom’s: Understanding
Analytic
60. A/An _____ is an open order, usually effective for one year, covering repeated purchases of an item or family of
items.
a.
outstanding order
b.
pending order
c.
blanket purchase order
d.
completed order
e.
order acceptance
Easy
Bloom’s: Remembering
Analytic
61. When using negotiating a/an _____, it is necessary to include a/an _____ that allows a buyer to terminate the contract
in the event of persistently poor quality, delivery problems, and so on.
a.
spot buy contract….evergreen clause
b.
RFP….RFQ
c.
purchase order….purchase agreement
d.
blanket purchase order….escape clause
e.
online catalog….RFP
Easy
Bloom’s: Understanding
Analytic
62. In a _____, the price stated in the agreement does not change, regardless of fluctuations in general overall economic
conditions, industry competition, levels of supply, market prices, or other environmental changes.
a.
blanket purchase order
b.
RFQ
c.
cost-based contract
d.
material purchase release
e.
fixed-price contract
Easy
Bloom’s: Remembering
Analytic
Chapter 2 — The Purchasing Process
63. In a _____, the supplier is reimbursed all of their actual costs plus some agreed on operational margin and overhead
amount.
a.
RFP
b.
cost-based contract
c.
material purchase release
d.
fixed-price contract
e.
reverse auction
Easy
Analytic
64. The _____, which the supplier provides, details the contents of a shipment and contains the description and quantity of
the items in a shipment.
a.
material packing slip
b.
purchase requisition
c.
bill of lading
d.
electronic funds transfer
e.
request for quotation
Easy
Analytic
65. Transportation carriers use a/an _____ to record the quantity of goods delivered to a facility.
a.
electronic transfer of funds
b.
material packing slip
c.
receiving discrepancy report
d.
bill of lading
e.
purchase order
Easy
Analytic
66. The _____ helps protect the carrier against wrongful allegations that the carrier somehow damaged, lost, or otherwise
tampered with a shipment.
a.
bill of lading
b.
material packing slip
c.
invoice
d.
material purchase release
Chapter 2 — The Purchasing Process
e.
blanket purchase order
Easy
Analytic
67. Which of the following is false regarding concealed damage?
a.
A user may discover concealed damages after opening a shipping container.
b.
Responsibility for concealed damage is often difficult to establish.
c.
The carrier may blame the supplier or maintain that the damage occurred after delivery of the material.
d.
The supplier may maintain total innocence and implicate the carrier.
e.
The bill of lading protects the carrier against charges of concealed damage.
Moderate
Analytic
68. A _____ details any shipping or receiving discrepancies noted by the receiving department.
a.
receiving discrepancy report
b.
bill of lading
c.
material packing slip
d.
change notice
e.
RFP
Easy
Analytic
69. The _____ purchase category includes such items are petroleum, coal, lumber, and metals such as copper and zinc.
a.
semifinished products and components
b.
finished products
c.
MRO items
d.
raw materials
e.
capital equipment
Easy
Analytic
70. A key characteristic of a/an _____ is a lack of processing by the supplier into a newly formed product.
Chapter 2 — The Purchasing Process
a.
component
b.
semifinished product
c.
finished good
d.
MRO item
e.
raw material
Easy
Analytic
4
71. Suppliers are more often being paid through _____, which is the automatic transfer of payment from the buyer’s bank
account to the supplier’s bank account.
a.
RFQ
b.
EFT
c.
MRO
d.
PO
e.
None of the above.
b
Easy
Analytic
3
72. _____ include anything that does not go directly into an organization’s product.
a.
MRO items
b.
Raw materials
c.
Production support items
d.
Services
e.
Semifinished products and components
Easy
Analytic
4
73. _____ include(s) the materials required to pack and ship final products, such as pallets, boxes, master shipping
containers, tape, bags, wrapping, inserts, and other packaging material.
a.
Raw materials
b.
Production support items
c.
Semifinished products
d.
Components
e.
Work-in-process inventory
b
74. Which of the following is not a feature that separates capital equipment purchases from other purchases?
a.
Capital equipment purchases do not occur with regular frequency.
b.
Capital equipment investment requires large sums of money.
c.
For accounting purposes, most capital equipment is not depreciable over the life of the item.
d.
Buyers can rarely switch suppliers in the middle of a large-scale project or dispose of capital equipment after
delivery because of dissatisfaction.
e.
Capital equipment is highly sensitive to general economic conditions.
Moderate
Analytic
75. All the following are expected growth areas in e-commerce except _____.
a.
transmitting purchase orders to suppliers
b.
submitting requests for quotes to suppliers
c.
placing orders with suppliers
d.
making electronic funds transfer payments
e.
submitting written check requests to accounts payable
Moderate
Analytic
76. Once a purchaser and a supplier reach agreement on a longer-term purchase contract, material releasing responsibility
should shift to _____.
a.
marketing
b.
purchasing
c.
the supplier
d.
user groups
e.
accounts payable
Easy
Analytic
77. While similar in concept, blanket purchase orders are typically used more often for _____ purchases.
a.
unique
Easy
Analytic
Chapter 2 — The Purchasing Process
b.
lower-value
c.
complex
d.
spot buy
e.
There are no differences in the types of products or amounts purchased in either method.
Moderate
Analytic
78. Which of the following is not an advantage of online ordering systems?
a.
Immediate visibility to back-ordered items.
b.
Longer order cycle time from input to delivery.
c.
Faster order input time.
d.
Reduced ordering errors.
e.
Ability to batch multiple items from multiple users on a single order.
Moderate
Analytic
79. [A/An] _____ involves a communications standard that supports inter-organizational electronic exchange of common
business documents and information.
a.
electronic catalog
b.
cloud-based ordering system
c.
Procure-to-pay
d.
Electronic data interchange
e.
blanket purchase order
Easy
Analytic