Which of the following is a disadvantage of a cost-based supplier evaluation system?
a. Least reliable.
b. Most complex so implementation costs are high.
c. Less frequent generation of evaluations.
d. Most subjective.
e. Tends to focus on unit price.
The ____ clause of a contract defines what is in and out of scope, which might include
the geographical limitations, the validity or invalidity of prior contracts, preferential
treatment by the supplier, or other elements.
a. force majeure
b. supply and delivery
c. scope of agreement
d. liability
e. key performance indicators and compensation
Scenario planning begins with the creation of viable working strategies and plans that
would allow managers to respond quickly in the event that a specific risk scenario
should actually come about.
a. True
b. False
In a _____, when inventory is depleted to a given level, the system notifies the
materials control department (or the 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
Supply management usually maintains significant data about individual activity costs
that can increase total cost.
a. True
b. False
The costs and penalties for patent infringement are so mild that most standard
purchasing agreements do not contain an appropriate patent indemnification clause.
a. True
b. False
Suppliers seldom use trade journals to advertise their products or services.
a. True
b. False
All of the following are positive results from early supplier design involvement except
_____.
a. longer lead-times in order to find and fix product defects before they get to the
customer
b. better quality and product design
c. establishing reasonable tolerances
d. suppliers can anticipate and begin preproduction work
e. improved product quality and manufacturability
_____ is a program that distributors market to manage their customers inventory for
them.
a. Just-in-time
b. Supplier managed inventory
c. Self-managed inventory
d. Countertrade
e. Preferred supplier inventory
A _____ is a voluntary group where buyers are in the same industry and conduct
business with many of the same suppliers.
a. group purchasing organization
b. consortium
c. lead division buying group
d. global sourcing council
e. strategic sourcing group
Buyers use competitive bidding when price is a minor criteria and the required item (or
service) has complex material specifications.
a. True
b. False
The _____ presents pricing for individual products and services that is set to enhance
the sales of the overall product line rather than to ensure the profitability of each
product.
a. price volume model
b. competition pricing model
c. market skimming model
d. promotional pricing model
e. revenue pricing model
In should-cost modeling, _____ refers to the integrity and transparency of the cost
model created.
a. direct cost
b. value stream maps
c. make-or-buy analysis
d. fixed cost
e. auditability
The _____ clause of a contract specifies the terms for supply and delivery of the
product or service.
a. specifications, quality, and health, safety, environment
b. scope of agreement
c. payment
d. confidentiality
e. None of the above.
A major disadvantage of a rail carrier is its relatively higher cost.
a. True
b. False
_____ indicates that the purchaser is responsible for payment of transportation costs
and assumes title of the goods at the suppliers shipping dock.
a. F.O.B. origin
b. F.O.B. delivered
c. F.O.B. carrier
d. F.O.B. intermediate storage point
e. F.O.B. destination