Chapter 05: Business–to-Business Activities: Improving Efficiency and Reducing Costs
1. An important characteristic of purchasing, logistics, and support activities is flexibility.
a.
True
b.
False
True
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
2. A purchasing or logistics strategy that works this year may not work next year.
a.
True
b.
False
True
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
3. The network purchasing model has one hierarchically structured firm negotiating purchase terms with several similarly
structured supplier firms, playing each supplier against the others.
a.
True
b.
False
False
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
4. Large companies usually assign responsibility for purchasing direct and indirect materials to the same department.
a.
True
b.
False
False
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
5. Businesses make a distinction between direct and indirect materials.
a.
True
b.
False
True
6. Direct materials that companies buy on a recurring basis are called MRO supplies.
a.
True
b.
False
False
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
7. The use of Internet technologies in sourcing activities is called e-sourcing.
a.
True
b.
False
8. States can reduce the cost of providing services by using Web technologies to serve their stakeholders.
a.
True
b.
False
9. Many industry value chains no longer consist of a single sequence of companies linked in a single line but include
many parallel lines that are interconnected in a web or network configuration.
a.
True
b.
False
True
1
Easy
05.01
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
10. Industry-specific data interchange standards were used to exchange data between companies in different industries.
a.
True
b.
False
11. Electronic data interchange (EDI) was the first form of electronic commerce to be widely used in business.
a.
True
b.
False
12. Electronic receipts returned from AS2 transmissions used in the exchange of EDI transactions fail to establish
nonrepudiation.
a.
True
b.
False
False
1
Easy
05.02
United States – BUSPROG: Analytic
Bloom’s: Comprehension
13. The American National Standards Institute (ANSI) does not set standards, but maintains procedures for the
development of national standards and accredits committees that follow those procedures.
a.
True
b.
False
True
1
Easy
05.02
United States – BUSPROG: Analytic
Bloom’s: Knowledge
United States – BUSPROG: Analytic
Bloom’s: Knowledge
14. The Data Interchange Standards Association (DISA) and the EDI for Administration, Commerce, and Transport
(UN/EDIFACT) group were successful in developing a common set of international standards for electronic data
interchange.
a.
True
b.
False
False
1
Easy
05.02
United States – BUSPROG: Analytic
Bloom’s: Knowledge
15. Electronic data interchange (EDI) increases the paper flow and disperses the interchange of information among
departments within a company.
a.
True
b.
False
16. In the past, most value-added networks (VANs) did not require an enrollment fee.
a.
True
b.
False
False
1
Easy
05.03
United States – BUSPROG: Analytic
Bloom’s: Knowledge
17. In the past, one of the major advantages of VANs was the low cost of its application.
a.
True
b.
False
False
1
Easy
05.03
United States – BUSPROG: Analytic
Bloom’s: Knowledge
18. An independent exchange is a B2B marketplace model.
a.
True
Chapter 05: Business–to-Business Activities: Improving Efficiency and Reducing Costs
b.
False
False
1
Easy
05.05
United States – BUSPROG: Analytic
Bloom’s: Knowledge
19. AS3 transmissions used for EDI transactions are insecure.
a.
True
b.
False
20. Many companies use strategic alliances, partnerships, and long-term contracts to create relationships with other
companies in the supply chains for the products that they manufacture or sell.
a.
True
b.
False
True
Easy
05.04
United States – BUSPROG: Analytic
Bloom’s: Knowledge
21. By coordinating the efforts of supply chain participants, firms that engage in supply chain management are reaching
beyond the limits of their own organization’s hierarchical structure and creating a new network form of organization
among the members of the supply chain.
a.
True
b.
False
True
1
Easy
05.04
United States – BUSPROG: Analytic
Bloom’s: Comprehension
22. By engaging suppliers in cooperative, long-term relationships, companies have found that they can work together with
these suppliers to identify new ways to provide their own customers with faster, cheaper, and better services.
a.
True
b.
False
Chapter 05: Business–to-Business Activities: Improving Efficiency and Reducing Costs
True
1
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05.04
United States – BUSPROG: Analytic
Bloom’s: Comprehension
23. The ultimate goal of supply chain management is to achieve a higher-quality or lower-cost product at the end of the
chain.
a.
True
b.
False
True
Easy
05.04
United States – BUSPROG: Analytic
Bloom’s: Knowledge
24. A passive Radio Frequency Identification Device (RFID) tag does not need a power source.
a.
True
b.
False
25. A vertical portal is an industry-focused hub that offers services to more than one industry.
a.
True
b.
False
26. _____ generally includes all purchasing activities, plus the monitoring of all elements of purchase transactions.
a.
Procurement
b.
Logistics
c.
Distribution
d.
Sales
1
Easy
27. _____ activities include managing the inbound movements of materials and supplies and the outbound movements of
finished goods and services.
a.
Procurement
b.
Logistics
c.
Transaction
d.
Production
b
1
Easy
05.01
Bloom’s: Knowledge
28. The classic objective of _____ is to provide the right goods in the right quantities in the right place at the right time.
a.
procurement
b.
logistics
c.
marketing
d.
production
b
1
Easy
05.01
United States – BUSPROG: Analytic
29. One common support activity that underlies multiple primary activities is _____.
a.
warehousing
b.
purchasing
c.
training
d.
procuring
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
30. _____ is the intentional collection, classification, and dissemination of information about a company, its products, and
its processes.
a.
Database management
b.
Knowledge management
c.
Intelligence warehousing
d.
Data mining
b
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
31. One trend that is becoming clear in purchasing, logistics, and support activities is the shift away from hierarchical
structures toward _____ structures.
a.
vertical
b.
horizontal
c.
network
d.
bottom-up
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
32. In _____, the company negotiates long-term contracts for most of the materials that it will need.
a.
replenishment purchasing
b.
blanket purchasing
c.
spot purchasing
d.
tactical purchasing
1
Easy
05.01
United States – BUSPROG: Analytic
Bloom’s: Knowledge
33. The roots of Web technology for business-to-business transactions lie in a hierarchically structured approach to inter-
firm information transfer called _____.
a.
power line communication
b.
data terminal interoperation
c.
object technology
d.
electronic data interchange
34. EDI is the acronym for _____.
a.
Education Interchange
b.
Elementary Decision Implementation
c.
Electronic Data Interchange
d.
Electronic Distance Interface
35. Most Electronic Data Interchange-Internet Integration (EDIINT) exchanges today are encoded using the _____
specification.
Chapter 05: Business–to-Business Activities: Improving Efficiency and Reducing Costs
a.
Applicability Statement 1 (AS1)
b.
Applicability Statement 3 (AS3)
c.
Applicability Statement 2 (AS2)
d.
Applicability Statement 4 (AS4)
36. Electronic data interchange (EDI) is still the single most commonly used technology in online _____ transactions.
a.
consumer-to–business
b.
business-to-business
c.
business-to-government
d.
business-to-consumer
37. The _____ has been the coordinating body for standards in the United States since 1918.
a.
Association for Computing Machinery
b.
Institute of Electronic and Electrical Engineers
c.
American National Standards Institute
d.
Institution of Engineering and Technology
1
Easy
05.02
United States – BUSPROG: Analytic
Bloom’s: Knowledge
38. In 1979, American National Standards Institute (ANSI) chartered a new committee to develop uniform electronic data
interchange (EDI) standards. This committee is called the _____.
a.
ASC X12
b.
DISA
c.
EDIFACT
d.
EDIINT
Easy
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United States – BUSPROG: Analytic
Bloom’s: Knowledge
39. _____ requires each business in the network to operate its own on-site electronic data interchange (EDI) translator
computer.
a.
Open EDI
b.
Direct connection EDI
c.
Internet EDI
d.
Web EDI
40. To use the services of a value-added network (VAN), a company must install electronic data interchange (EDI) _____
software that is compatible with the VAN.
a.
switch
b.
interpreter
c.
translator
d.
router
41. _____ allows trading partners to pass messages through a value-added network instead of connecting their computers
directly to each other.
a.
Indirect connection EDI
b.
Direct connection EDI
c.
Wireless EDI
d.
Repeated EDI
42. Since electronic data interchange (EDI) transactions are business contracts and often involve large amounts of money,
the existence of an independent audit log helps establish _____.
a.
secrecy
b.
abrogation
c.
nonrepudiation
d.
privacy
1
Easy
05.02
United States – BUSPROG: Analytic
Bloom’s: Knowledge
43. Electronic data interchange (EDI) on the Internet is also called _____.
a.
open EDI
b.
closed EDI
c.
linked EDI
d.
digital EDI
1
Easy
05.03
United States – BUSPROG: Technology
Bloom’s: Knowledge
44. When companies integrate their supply management and logistics activities across multiple participants in a particular
product’s supply chain, the job of managing that integration is called _____.
a.
supply chain management
b.
supply intelligence management
c.
supply resource planning
d.
supply workflow planning
Bloom’s: Knowledge
45. The long-term relationships that are created among participants in the supply chain are called _____.
a.
quality partnerships
b.
JIT alliances
c.
supply alliances
d.
joint partnerships
United States – BUSPROG: Analytic
46. Businesses that engage in supply chain management work to establish long-term relationships with a small number of
very capable suppliers who are called _____.
a.
tier-one suppliers
b.
primary suppliers
c.
secondary suppliers
d.
tier-two alliances
United States – BUSPROG: Analytic
Bloom’s: Knowledge
47. _____ are business-to-business (B2B) marketplace models used in electronic commerce.
a.
Independent exchanges
b.
Industry marketplaces
c.
Public marketplaces
d.
Customer portals
United States – BUSPROG: Technology
Bloom’s: Knowledge
48. A(n) _____ is a business-to-business (B2B) marketplace model that has a password-protected entrance and offers
negotiated price reductions on a limited selection of products.
a.
industry marketplace
b.
public marketplace
c.
private store
d.
independent exchange
49. A(n) _____ is a marketplace that provides auctions, request for quote postings, and other features to companies that
want to operate their own marketplaces.
a.
private store
b.
independent industry marketplace
c.
customer portal
d.
private company marketplace
50. A(n) _____ is a marketplace formed by several large buyers in a particular industry.
a.
private company marketplace
b.
independent industry marketplace
c.
industry consortia-sponsored marketplace
d.
customer portals marketplace
51. Offshoring nonmanufacturing activities such as purchasing, research and development, recordkeeping, and
information management is called _____.
business process offshoring
United States – BUSPROG: Analytic
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52. The total dollar amount of the goods and services that a company buys during a year is called its _____.
Chapter 05: Business–to-Business Activities: Improving Efficiency and Reducing Costs
53. In _____ purchasing, by negotiating contracts in advance, companies can obtain low prices and good delivery terms.
54. _____ are those materials that become part of the finished product in a manufacturing process.
55. MRO is the acronym for maintenance, repair, and _____.
56. _____ give individual managers the ability to make multiple small purchases at their discretion while providing cost-
tracking information to the procurement office.
57. _____ business processes include activities such as making payments, processing payments received from customers,
planning capital expenditures, and budgeting and planning to ensure that sufficient funds will be available to meet the
organization’s obligations as they come due.
58. _____ processes include activities such as hiring, training, and evaluating employees; administering benefits; and
complying with government record-keeping regulations.
59. The U.S. government’s Bureau of Public Debt operates the _____ site, which allows individuals to buy savings bonds
and financial institutions to buy treasury bills, bonds, and notes.
60. Some researchers use the term “_____” instead of “supply chain” because many industry value chains include many
parallel lines that are interconnected in a network configuration made up of strategic alliances or complex configurations
of outsourcing contracts.
61. _____ are the names of the formats for specific business data interchanges.
62. A(n) _____ is a company that provides communications equipment, software, and skills needed to receive, store, and
forward electronic messages that contain electronic data interchange (EDI) transaction sets.
63. _____ is the ability to establish that a particular transaction actually occurred.
64. A(n) _____ is the movement of money from one bank account to another.
65. _____ prevents either party involved in an electronic data interchange (EDI) transaction from denying the
transaction’s validity or existence.
66. A(n) _____ system is a service that banks use to manage their accounts with each other.
67. _____ are small chips that use radio transmissions to track inventory.
68. _____ tags can be placed anywhere on or in most items and are readable even when covered with packing materials,
dirt, or plastic bands.
69. The use of other organizations to perform specific activities is called _____.
70. Companies in industries with long supply chains have, in the past, often found it difficult to maintain customer focus,
which is sometimes called a(n) _____.
71. Vertical portals consisting of industry marketplaces, independent exchanges, and public marketplaces are known
collectively as _____ marketplaces.
72. A(n) _____ is a vertical portal which is not controlled by a company that is an established buyer or seller in the
industry.
73. _____ are vertical portals which are open to new buyers and sellers just entering the industry.
74. Firms that exchange data in specific standard formats of electronic data interchange are said to be _____.
75. Buying products from loosely organized markets is called _____.
76. Differentiate between purchasing activities and procurement activities.
77. Differentiate between direct and indirect materials.
78. What is the difference between indirect connection electronic data interchange (EDI) and direct connection electronic
data interchange (EDI)?
79. What are the advantages of using value-added networks (VANs)?
80. List the advantages of using Internet technologies in supply chain management.