Chapter 20 — Purchasing and Supply Strategy Trends
1. Overall, future purchasing and supply mission and goals will be narrower and less aligned with the strategic
objectives of the firm.
a.
True
b.
False
False
Easy
Analytic
2. Purchasing and supply will be expected to play a growing role in sustainability efforts of the firms, many of
which closely involve suppliers.
a.
True
b.
False
True
Easy
Analytic
3. Providing ongoing purchase price and cost reduction, combined with quality and delivery performance
improvement, is the maximum contribution expected of purchasing and supply.
a.
True
b.
False
False
Moderate
Analytic
4. Time-related capabilities will drive the next generation of order winners in the eyes of the customer.
a.
True
b.
False
True
Easy
Analytic
5. Competition is no longer between fast and agile and slow firms but between big and small firms.
a.
True
b.
False
False
Easy
6. Purchasing will play a lesser role in time-based competition because of its inability to affect time-related
processes and activities.
a.
True
b.
False
False
Easy
Analytic
7. Perhaps the most obvious area where firms are concentrating their time-reduction efforts is during new-
product and process development along with achieving innovation.
a.
True
b.
False
True
Easy
Analytic
8. The overall purpose of a purchase category strategy is to maximize value to the buyer, but not the supplier, by
leveraging only internal company, and not external supplier, resources and capabilities.
a.
True
b.
False
False
Moderate
Analytic
9. Companies will decreasingly use value-focused sourcing approaches to evaluate how a supplier or group of
suppliers may be utilized to gain competitive advantage for categories with high business impact.
a.
True
b.
False
False
Moderate
Analytic
10. An individual supplier focus (as opposed to a supply network focus) for category strategy development will
be increasingly applied.
Analytic
Chapter 20 — Purchasing and Supply Strategy Trends
a.
True
b.
False
False
Easy
Analytic
11. Wall Street recognizes and rewards firms that achieve higher return-on-investment.
a.
True
b.
False
True
Easy
Analytic
12. Outsourcing will likely continue, although firms will be carefully examining and sometimes rebalancing
their insourcing/outsourcing patterns.
a.
True
b.
False
True
Easy
Analytic
13. Category strategies will become less complex, requiring only internal and functional executive engagement,
including review and approval.
a.
True
b.
False
False
Moderate
Analytic
14. The supply base will be viewed not only as tier one suppliers but also as supply networks that extend beyond
the tier one suppliers.
a.
True
b.
False
True
Moderate
15. Leading sustainability efforts with suppliers and their suppliers will decrease in importance.
a.
True
b.
False
False
Easy
Analytic
16. Strategic working relationships between buyers and suppliers will not have to change for increased value
creation.
a.
True
b.
False
False
Easy
Analytic
17. Technology and supplier selection discussion during new-product development have minimal effect on cost,
quality, and product/service launch, as well as future production.
a.
True
b.
False
False
Moderate
Analytic
18. Firms, not supply chains, compete.
a.
True
b.
False
False
Easy
Analytic
19. Big data and analytics will play an increasingly important role in purchasing and supply chain management.
a.
True
b.
False
True
Analytic
20. Big data combined with the capabilities of analytical tools combined with high talent people will further
improve supply analyses and decision-making across many areas.
a.
True
b.
False
True
Moderate
Analytic
21. External collaboration will signal a shift from cooperation to pure competition for some segments of a
company’s supply base.
a.
True
b.
False
False
Moderate
Analytic
22. Because of information transparency, product and service innovations from suppliers will be decreasingly
important to competitive success.
a.
True
b.
False
False
Easy
Analytic
23. Cross-functional teams will continue to be important to supply management strategy.
a.
True
b.
False
True
Easy
Analytic
24. Strong hard-side skills, such as a collaborative working style, innovative supply approaches and leadership
Easy
Analytic
Chapter 20 — Purchasing and Supply Strategy Trends
abilities versus a narrow process view, will be necessary to lead supply efforts and achieve results.
a.
True
b.
False
25. Globalization will require that companies develop specific and tailored approaches to identify and hire
foreign nationals.
a.
True
b.
False
True
Easy
Analytic
26. The currently dominant decentralized model for supply management will continue to be a key strategy and
likely the norm for the foreseeable future.
a.
True
b.
False
False
Easy
Analytic
27. Metrics to measure supplier innovation contribution, such as number of new-product/process innovations
suggested, product innovations resulting in revenue generation, and number of new patents benefiting the buyer
will be broadly implemented.
a.
True
b.
False
True
Moderate
Analytic
28. Given the global nature of many businesses, especially where customer growth is coming from new and
emerging markets, there is an increasing need for a centralized focus to meet unique customer needs.
a.
True
b.
False
False
29. Which of the following is one of the external forces affecting purchasing and supply management’s role and
required contributions to a firm’s success?
a.
Global competition and emerging market growth.
b.
Mergers, acquisitions, and supply market consolidation.
c.
Technology advances.
d.
Increased governmental regulation and social responsibilities.
e.
All of the above.
30. All of the following are examples of the future focus on supply chain performance except _____.
a.
accelerating and obtaining more innovation from suppliers
b.
focusing more and more on day-to-day tactical purchasing activities
c.
leveraging supplier capabilities and know-how to establish new sources of revenue
d.
identifying and mitigating supply risks of any kind to ensure business continuity
e.
expanding the breadth and depth of cost management efforts
31. Which of the following is not one of the components of material ordering cycle time that supply chain
management practices directly affect?
a.
Transmission of requirements to suppliers.
b.
Suppliers’ ordering and manufacturing cycle time.
c.
Allocation of manufacturing overhead costs.
d.
Delivery from suppliers.
e.
Incoming receipt and inspection.
32. The purpose of [a] _____ is to maximize value to the buyer and supplier by leveraging both internal
company and external supplier resources and capabilities.
a.
purchase category strategy
b.
just-in-time manufacturing
c.
kanban
d.
cost reduction
e.
None of the above.
33. Which of the following statements is false regarding category strategy?
a.
Companies, in the future, will look beyond cost, quality and delivery as purchase category strategy
goals.
b.
Companies will increasingly use value-focused sourcing approaches to evaluate how a supplier or
group of suppliers may be utilized to gain competitive advantage for categories with high business
impact.
c.
There will be increasing use of value chain mapping, data analytics to better understand industry
trends, cost modeling and scenario planning techniques to develop, evaluate, and select from
purchase category strategy alternatives.
d.
Establishing core competencies and capabilities has influenced the strategic planning process and
category strategy development at most firms.
e.
Groups of suppliers (versus supply networks) will become an increasing focus of purchase category
strategies.
34. Which of the following is not a reason why an emphasis on outsourcing will continue?
a.
High transportation costs will force manufacturers to only produce internally.
b.
Cost-reduction pressures will continue and are forcing organizations to use their productive resources
most efficiently.
c.
Firms will increasingly focus more on what they excel at to gain competitive advantage along with
outsourcing noncompetitive activities related to both production and administration.
d.
The need for customer responsiveness is increasingly causing companies to decide how best to
achieve greater flexibility and shorter lead times.Wall Street recognizes and rewards firms that
achieve higher return-on-investment.
e.
35. Which of the following is a question that companies will need to carefully establish their supply bases?
a.
What current and future supplier capabilities are required?
b.
How many suppliers are required to support company needs?
c.
Should we establish/require specific suppliers at the Tier 2 and Tier 3 levels?
d.
All of the above.
e.
None of the above.
36. Which of the following is not one of the strong soft-side skills for future supply managers?
a.
Collaborative working style.
b.
Innovative supply approaches and leadership abilities.
c.
Ability to lead virtual, geographically dispersed teams.
d.
Cost analytics.
e.
All of the above are strong soft-side skills.