Trade shows are seldom an ineffective way to gain exposure to a large number of
suppliers at one time.
a. True
b. False
According to Porter, a firms value chain is composed of primary and support activities
that can lead to competitive advantage when configured properly.
a. True
b. False
The use of a full-service trading company may actually result in a lower total cost for
international purchases compared with performing each activity individually.
a. True
b. False
Which of the following is not one of the disadvantages of air carrier over other modes
of transportation?
a. Very high cost.
b. Location of large airports limits shipping points.
c. Seasonal availability.
d. Cannot be used for large, bulky, or hazardous shipments.
e. None of the above.
The insourcing/outsourcing decision cannot be applied to virtually every process
conducted within the traditional walls of an organization.
a. True
b. False
In ERP, visibility of specific transactions taking place in each business process is
accessible to everyone in the organization.
a. True
b. False
Buyers rarely rely on suppliers for cost-reduction assistance.
a. True
b. False
_____ is the most basic and important tenet of the MBNQA criteria.
a. Continuous improvement
b. Six Sigma
c. Statistical process control
d. Process capability
e. None of the above.
Purchasing activities are concerned with the laws regarding contracts and the laws
regarding agency, the majority of which concern contract laws.
a. True
b. False
All of the following are major areas of the scope of purchasing and supply management
jobs in larger organizations except _____.
a. material handling
b. sourcing, negotiation, and contract management
c. market intelligence and research
d. operational support and follow-up
e. administration and data management
The _____ group is responsible for developing the policies and procedures that
purchasing personnel follow, administering and maintaining the purchasing information
system and database, determining required staffing levels, developing department plans,
organizing training and seminars for buyers, and developing measurement systems to
evaluate purchasing performance.
a. administration and data management
b. tactical buying
c. sourcing, negotiation, and contract management
d. operational support and follow-up
e. market intelligence and research
The trend today is to move away from a horizontal focus, where work and information
are managed across groups and between organizations, toward a vertical focus, where
work and information are managed up and down within functional groups.
a. True
b. False
_____ applies the price/cost equation across multiple processes that span two or more
organizations across a supply chain.
a. Make-buy analysis
b. Price analysis
c. Cost analysis
d. Target costing
e. Total cost analysis
Contract management and compliance provides oversight of the front end of the
sourcing process.
a. True
b. False
A/An _____ is defined as the cost of the next best alternative.
a. operating cost
b. purchase price
c. net present value
d. usage cost
e. opportunity cost
A major step toward eliminating delivery uncertainty is a commitment to stable release
schedules with realistic (but not overly generous) supplier lead times.
a. True
b. False
A/An _____ may be used as a decision support tool in which the sourcing team assigns
a weight to the different categories and develops a numerical score for each supplier in
each category, thereby developing a final performance score.
a. make-buy analysis
b. portfolio analysis matrix
c. reverse auction
d. e-catalog
e. supplier selection scorecard
Companies that are unable to commit the necessary resources to assess or certify
supplier quality on their own will never accept ISO 9000:2008 registration as proxy
evidence of a suppliers quality management capability.
a. True
b. False
Within the downstream portion of a supply chain, _____ are responsible for the actual
movement of materials between locations.
a. buyers
b. trucking firms
c. logistics managers
d. accountants
e. purchasing managers
According to Dick Locke, all of the following are advice about language and
communication except _____.
a. if a supplier is using English as a second language, the buyer should be responsible
for preventing communication problems
b. always pay in U.S. dollars when dealing with worldwide suppliers
c. to aid in communication, speak slowly, use more communication graphics, and
eliminate jargon, slang, and sports and military metaphors from your language
d. bring an interpreter to all but the most informal meetings
e. document, in writing, the conclusions and decisions made in a meeting before
adjourning