Chapter 4 — Supply Management Integration for Competitive Advantage
True / False
1. Purchasing offices were once corporate backwaters, filled with people who didn’t dream of advancing to the top rungs
of their organization.
a.
True
b.
False
True
Easy
Analytic
2. Integration does not require that people create a common understanding of the end goal or purpose.
a.
True
b.
False
True
Easy
Analytic
3. Outsourcing products through low cost country sourcing environments or contract manufacturers is very much the same
as sourcing in North American buyer-seller situations.
a.
True
b.
False
False
Moderate
Analytic
4. Because the links between operations and supply management have been so close, it is not unusual for supply
management to report directly to operations.
a.
True
b.
False
True
Easy
Analytic
5. Many firms are now colocating supply management personnel directly at operating locations so supply management
can respond quickly to operation’s needs.
a.
True
b.
False
True
6. Perhaps the most important and challenging linkages exist between supply management and marketing/sales.
a.
True
b.
False
False
Easy
Analytic
7. Many supply management groups are recruiting commodity managers with very strong technical backgrounds, who are
able to talk the talk and walk the walk alongside their engineering counterparts.
a.
True
b.
False
True
Moderate
Analytic
8. Supply management usually maintains significant data about individual activity costs that can increase total cost.
a.
True
b.
False
False
Easy
Analytic
9. In collaboration, the relationship is bilateral; both parties have the power to shape its nature and future direction over
time.
a.
True
b.
False
True
Easy
Analytic
10. A long-term contract does not provide an incentive for a supplier to invest in new plants and equipment.
a.
True
Easy
Analytic
Chapter 4 — Supply Management Integration for Competitive Advantage
b.
False
False
Easy
Analytic
11. The need for confidentiality regarding financial, product, and process information is the most frequently cited reason
for not developing closer supplier relationships.
a.
True
b.
False
True
Moderate
Analytic
12. Closer buyer-supplier relationships interest all suppliers.
a.
True
b.
False
False
Easy
Analytic
13. A shift to a more trusting buyer-supplier relationship is easy.
a.
True
b.
False
False
Easy
Analytic
14. External relationship management begins with internal relationship management: internal alignment is key.
a.
True
b.
False
True
Easy
Analytic
15. Experience reveals that cross-functional sourcing teams are usually part-time/continuous assignments, making the use
Chapter 4 — Supply Management Integration for Competitive Advantage
of sourcing teams a challenging way to work.
a.
True
b.
False
True
Moderate
Analytic
16. A primary objective of using teams is to bring together individuals with common perspectives and expertise to
perform better on a task compared to individuals or departments acting along.
a.
True
b.
False
17. Perhaps the greatest benefit of team interaction is that once a team makes a decision, implementing the decision often
becomes easier due to group buy-in.
a.
True
b.
False
True
Easy
Analytic
18. The use of cross-functional sourcing teams guarantees a successful outcome to a project or assignment.
a.
True
b.
False
False
Easy
Analytic
19. Membership on a team can have negative effects on individuals.
a.
True
b.
False
True
Analytic
20. A team may pressure an individual to support or conform to a lower production norm than the individual’s personal
norm.
a.
True
b.
False
True
Easy
Analytic
21. Successfully using teams does not require extensive planning before a team should be allowed to pursue an
assignment.
a.
True
b.
False
False
Easy
Analytic
22. Organizations should use teams selectively due to limited resource availability.
a.
True
b.
False
True
Easy
Analytic
23. Interacting as a team requires the same set of skills as the skills required for traditional work.
a.
True
b.
False
False
Easy
Analytic
24. If team members receive delayed reinforcement, they will exert greater effort than if the reinforcement is immediate.
a.
True
b.
False
False
Easy
25. If positive work is never recognized or reinforced through rewards, the positive effort will likely be extinguished.
a.
True
b.
False
True
Easy
Analytic
26. The effectiveness of the sourcing team leader is one of the weakest predictors of team success.
a.
True
b.
False
False
Easy
Analytic
27. Being an effective team leader means satisfying a demand set of essential operating responsibilities and requirements
while still promoting the creativity, leadership ability, and cohesiveness of team members.
a.
True
b.
False
True
Easy
Analytic
28. Goal setting is not a critical cross-functional team requirement.
a.
True
b.
False
29. Cross-functional sourcing teams are a less-than-ideal way to promote cross-organizational cooperation.
a.
True
b.
False
False
Analytic
30. Cross-functional sourcing teams that incorporate supplier participation report fewer problems coordinating work
activity between the team and key suppliers.
a.
True
b.
False
True
Moderate
Analytic
31. In forward-thinking enterprises, supply management seldom plays a key role in the development of new products and
services.
a.
True
b.
False
32. On supplier assessments, performance data should be weighted in such a manner that they are aligned with customer
performance requirements.
a.
True
b.
False
True
Easy
Analytic
33. Supplier selection should never occur before a new part is actually designed or reaches production.
a.
True
b.
False
False
Moderate
Analytic
34. If given the opportunity, suppliers seldom have a major impact on the overall timing and success of a new product.
Easy
Analytic
Chapter 4 — Supply Management Integration for Competitive Advantage
a.
True
b.
False
False
Easy
Analytic
35. According to research, the sharing of technology roadmaps often strongly influences the type of buyer-supplier
relationship that resulted in the integration process.
a.
True
b.
False
36. The physical co-location of a supplier engineer at a buying company is increasingly becoming a part of the normal
product development process structure.
a.
True
b.
False
True
Moderate
Analytic
37. Suppliers of critical nonstandard commodities are involved much later in the product development initiative.
a.
True
b.
False
False
Easy
Analytic
38. Early visibility to product requirements allows supply management to share critical information with suppliers that can
help avoid delays.
a.
True
b.
False
True
Analytic
39. Suppliers are never an invaluable source of ideas for process improvement.
a.
True
b.
False
False
Easy
Analytic
40. Many companies are encouraging suppliers to provide a permanent on-site representative who can aid the company in
improving customer order fulfillment processes.
a.
True
b.
False
True
Easy
Analytic
41. _____ involves professionally managing suppliers and developing close working relationships with different internal
groups.
a.
Purposeful cooperation
b.
Program management
c.
Credible commitment
d.
Supply integration
e.
Relationship management
42. _____ is the process of incorporating or bringing together different groups, functions, or organizations, either formally
or informally, physically or by information technology, to work jointly and often concurrently on a common business-
related assignment or purpose.
a.
Cooptation
b.
Program management
c.
Collaboration
d.
Collusion
e.
Integration
43. Which of the following are not considered relationship management skills?
a.
Ability to conduct detailed price and cost analyses
b.
Ability to act ethically.
c.
Ability to listen effectively.
d.
Ability to communicate.
e.
Ability to use creative problem-solving.
Easy
Analytic
44. All of the following are examples of the different methods that supply management will apply to achieve integration
except _____.
a.
Cross-functional or cross-organizational committees and teams
b.
Hiring English majors into supply management to correct document language
c.
Information systems such as videoconferencing and webmail
d.
Process-focused organizations that are dedicated to certain processes
e.
Colocation of suppliers and customers
45. _____ is defined as the process by which two or more parties adopt a high level of purposeful cooperation to maintain
a trading relationship over time to achieve specific goals.
a.
Supply base management
b.
Collaboration
c.
KPI
d.
Supply integration
e.
SRM
46. All of the following are characteristics that define a collaborative buyer-supplier relationship except _____.
a.
one or a limited number of suppliers for each purchased item or family of items
Moderate
Analytic
Chapter 4 — Supply Management Integration for Competitive Advantage
b.
a win-win approach to reward sharing
c.
open exchange of information
d.
a credible commitment to work together during difficult times
e.
the buyer unilaterally resolving disputes
Moderate
Analytic
47. Which of the following is not a common obstacle to closer buyer-seller relationships?
a.
Long-term contracts.
b.
Confidentiality.
c.
Limited interest by suppliers.
d.
Legal barriers.
e.
Resistance to change.
Easy
Analytic
48. [A/An] _____ consists of personnel from different functions and increasingly from suppliers who are brought together
to achieve supply management or supply chain-related tasks.
a.
Big R
b.
External RM
c.
cross-functional sourcing team
d.
Little r
e.
Internal RM
49. Which of the following is not a benefit of using a cross-functional sourcing team?
a.
Reduced time to complete a task.
b.
Increased innovation.
c.
Joint ownership of decisions.
d.
Enhanced communication among functions or organizations.
e.
Groupthink.
50. Which of the following is not a potential drawback of using a cross-functional sourcing team?
a.
Team process loss.
b.
Reduced innovation.
c.
Negative effects on individual members.
d.
Poor team decisions.
e.
Groupthink.
51. _____ is a function of the professional’s ability to translate supply market data into compelling insights that solve
business problems and to enable organizational connections and networking that accelerate business success.
a.
SRM
b.
Groupthink
c.
Reciprocity
d.
Process gain
e.
Relationship capital
Moderate
Bloom’s: Understanding
Analytic
52. _____ occurs when a team does not complete its task in the best or most efficient manner or members are not
motivated to employ their resources to create a successful outcome.
a.
Groupthink
b.
KPI
c.
Collaboration
d.
Process loss
e.
Synergy
Moderate
Bloom’s: Understanding
Analytic
53. When _____ is present, the total group effort is _____ the expected sum of the individual parts.
a.
process loss….less than
b.
groupthink….more than
c.
process loss….more than
Analytic
Chapter 4 — Supply Management Integration for Competitive Advantage
d.
collaboration….less than
e.
synergy….the same as
Easy
Bloom’s: Understanding
Analytic
54. _____ is the tendency of a rational group or team to arrive at a bad decision when other information is available.
a.
Serendipity
b.
Collusion
c.
Process loss
d.
Maverick spend
e.
Groupthink
55. Which of the following is not an example of an appropriate use of a cross-functional team?
a.
New product development.
b.
Preparing a RFQ for a routine commodity product.
c.
Locating a new production facility.
d.
Developing a commodity or purchase family strategy.
e.
Establishing a new business unit.
Easy
Bloom’s: Understanding
Analytic
56. 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
57. Which of the following is not a requirement of being an effective team member?
a.
Understands the team’s task – the member has task-relevant knowledge.
b.
Has the time to commit to the team.
c.
Has the right corporate political connections.
d.
Has the ability to work with others in a group.
e.
Can assume an organizational rather than strict functional perspective.
58. Management can exert subtle control over a team’s tasks through all of the following except _____.
a.
authorizing the creation of the sourcing team
b.
selecting the team’s task
c.
selecting the team leader and members
d.
conducting performance reviews and holding teams accountable for performance outcomes
e.
sitting in on all team meetings
59. Which of the following is not true regarding establishing sourcing team goals?
a.
Teams with established goals often use those goals as a basis for evaluating how well the team is performing.
b.
Teams will establish, on average, challenging rather than easy goals.
c.
External pressure on a team to set goals usually results in the setting of more challenging goals.
d.
Teams establish goals only because they have to.
e.
Teams with goals perform better, on average, than teams that are asked simply to perform their best without
explicit end goals.
60. All of the following are examples of how supply management should monitor and anticipate activity in its supply
market except _____.
a.
ensuring that cost accounting keeps track of historical prices paid
b.
forecasting long-term supply and prices for its basic commodities
c.
monitoring technological innovations that impact its primary materials or make substitute materials
economically attractive
Chapter 4 — Supply Management Integration for Competitive Advantage
d.
evaluating not only its existing suppliers but also other potential suppliers
e.
providing timely visibility to new-product requirements
Moderate
Analytic
61. All of the following questions are important in considering new or existing suppliers for integration except _____.
a.
Is the supplier capable of hitting affordable targets regarding cost, quality, conductivity, weight, and other
performance criteria?
b.
Does the supplier have sufficient marketing funds for promoting its new products?
c.
Will the supplier be able to meet product introduction deadlines?
d.
Will the supplier be able to increase capacity and production fast enough to meet our market share
requirements?
e.
Do the supplier’s personnel have the required training to start up required processes and debug them?
62. Using _____, the supplier is given blueprints and told to make the product from them.
a.
black box design
b.
gray box design
c.
red box design
d.
white box design
e.
shadow box design
63. Using _____, the supplier’s engineers work cooperatively with the buying company’s engineers to jointly design the
product.
a.
shadow box design
b.
gray box design
c.
red box design
d.
white box design
e.
black box design
64. Using _____, suppliers are provided with functional specifications and are asked to complete all technical
specifications, including materials to be used, blueprints, and so on.
a.
shadow box design
b.
white box design
c.
gray box design
d.
red box design
e.
black box design
65. The term _____ refers to the set of performance criteria and products and processes an organization intends to develop
or manufacture.
a.
concurrent engineering
b.
early supplier involvement
c.
process loss
d.
technology roadmap
e.
R&D plan
66. Which of the following are not examples of technology roadmaps?
a.
Incorporation of new AICPA accounting standards into existing accounting systems.
b.
Projected performance specifications for a class of products or processes.
c.
An intention to integrate a new material or component.
d.
Development of a product to meet customer requirements that is currently unavailable in the market.
e.
Integration of multiple complementary technologies that results in a radically new product.
67. All of the following are elements of successful supplier suggestion programs except _____.
a.
the savings from the suggestion are often shared 50/50, not kept solely by the buying company
b.
the program focuses on cost improvement, not simply cutting the supplier’s margins
c.
successful buying companies provide prompt feedback to the supplier on its suggestion and also implement
good suggestions promptly
Chapter 4 — Supply Management Integration for Competitive Advantage
d.
it is critical to acknowledge the supplier’s suggestion, through an awards program, newsletter, or
announcement at a supplier conference
e.
the supplier should be allowed to keep 100% of the savings since it came up with the idea