The _____ clause of a contract identifies any free trade issues and benefits, and how to
share the benefits.
a. assignment and contracting
b. free trade areas
c. key performance indicators and compensation
d. payment
e. scope of agreement
A _____ system is a production control approach that uses containers, cards, or visual
cues to control the production and movement of goods through the supply chain.
a. MRP
b. DRP
c. lean supply
d. JIT kanban
e. lean transportation
Once a firm fully rationalizes and optimizes its supply base, improvement will occur
primarily by developing the capabilities of existing suppliers rather than by switching
suppliers on a large scale.
a. True
b. False
Few of the tasks that qualify as operational support are being streamlined or automated,
especially with the advent of e-purchasing systems.
a. True
b. False
Which of the following is one of the external forces affecting purchasing and supply
managements role and required contributions to a firms 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.
Which of the following is not one of the eight key principles of total quality
management?
a. Pursue quality at the source.
b. Emphasize prevention rather than detection of defects.
c. Focus on process rather than output.
d. Establish continuous improvement as a way of life.
e. Stress subjective rather than objective analysis. (LO #2)
A/An _____ generally runs for a 12-month period and may or may not come up for
renewal at the end of the year.
a. national contract
b. annual contract
c. open-ended agreement
d. blanket order
e. None of the above.
Break-even analysis includes both cost and revenue data for an item to identify the
point where revenue equals costs, and the expected profit or loss at different production
volumes.
a. True
b. False
All of the following are characteristics of an effective supplier survey except _____.
a. the survey should include the performance categories considered important to the
evaluation and selection process
b. the survey process should be as objective as possible
c. it is mathematically straightforward
d. the buyer should attempt to measure every possible variable every time it is used
e. the format of the evaluation should provide some flexibility across different types of
purchase requirements
ISO 9000:2008 follows a product-based approach to quality management that stresses
planning, acting, analyzing results, and making improvements.
a. True
b. False
Either buyers or sellers can arbitrarily cancel or default on their contracts with impunity.
a. True
b. False
Even in an era of just-in-time production, almost all firms hold some level of
preproduction inventory.
a. True
b. False
_____ means that two or more parties are competing over a fixed sum value with the
winner taking all or the larger share.
a. Lose-lose negotiation
b. Win-lose negotiation
c. Winner-take-all negotiation
d. Integrative bargaining
e. None of the above.