It is a common and preferred current practice for suppliers to arrange shipment to a
purchaser and simply include the transportation cost as part of the purchase cost.
a. True
b. False
_____ involves contracting with independent suppliers located outside geographic
boundaries of the United States for goods and services.
a. Re-shoring
b. Domestic sourcing
c. Nearshoring
d. Outsourcing
e. Offshoring
_____ can cover such characteristics as the materials used, the manufacturing or service
steps required, and even the physical dimensions of the product.
a. Description by market grade
b. Description by specification
c. Description by brand
d. Description by industry standard
e. Description by performance characteristics
A/An _____ is a secure location approved by the appropriate U.S. Customs and Border
Protection (CBP) office.
a. offshore supplier
b. international purchasing office
c. agent
d. offset
e. foreign trade zone
Decisions in lean must be based on the opinions or preferences of influential
individuals, as well as on facts and data.
a. True
b. False
Progressive firms are working to increase the length of their purchase contracts.
a. True
b. False
Suppliers that earn ISO 9000:2008 registration typically demonstrate lower levels of
quality than those suppliers that are not registered.
a. True
b. False
_____ in a supply base consists of such factors as: country stability, regional stability,
political and governmental stability, levels of official corruption, dissimilarities
regarding contract law and intellectual property rights, elections, military actions, civil
disturbances, terrorism, trade balance issues, and customs duties and tariffs.
a. Financial risk
b. Market risk
c. Supplier company risk
d. Political risk
e. Sourcing risk
All of the following are examples of the primary business processes around which an
ERP system is designed except _____.
a. selling a product or service
b. making a product
c. buying a product
d. determining where to locate warehouse facilities
e. costing, paying the bills, and collecting
A _____ is a movement away from a negotiating position that offers something of value
to the other party in order to ultimately gain something else of value.
a. reward
b. concession
c. coercive maneuver
d. tactic
e. strategy
The _____ identifies those 20 percent of suppliers receiving the bulk of purchase spend
or that minority of suppliers that cause the most quality problems.
a. improve or else approach
b. triage approach
c. strategic sourcing approach
d. competency staircase approach
e. twenty/eighty rule
Which of the following is not one of the questions that should be asked when analyzing
a sellers pricing strategy?
a. Does the seller have a long-term pricing strategy, or is it short-term in nature?
b. Is the seller a price leader or a price follower?
c. How many employees does the sellers plant employ?
d. Is the seller attempting to establish entry barriers to other competitors by establishing
a low price initially, then preparing to raise prices later in the future?
e. Is the seller using a cost-based pricing approach or a market-based pricing approach?
Which of the following is not one of the advantages of a rationalized and optimized
supply base?
a. Longer lead-times.
b. Use of full-service suppliers.
c. Lower total product cost.
d. Ability to pursue complex supply management strategies.
e. Buying from world-class suppliers.
[A/An] _____ involves a communications standard that supports inter-organizational
electronic exchange of common business documents and information.
a. electronic catalog
b. cloud-based ordering system
c. Procure-to-pay
d. Electronic data interchange
e. blanket purchase order
Agreeing to a short-term contract frequently allows the buyer to have access to more
detailed cost and price information from the supplier in exchange for the flexible
contract term.
a. True
b. False
Technology and supplier selection discussion during new-product development have
minimal effect on cost, quality, and product/service launch, as well as future production.
a. True
b. False
Cross-functional sourcing teams that incorporate supplier participation report fewer
problems coordinating work activity between the team and key suppliers.
a. True
b. False
Which of the following is not one of the critical steps to process mapping?
a. Search for better ways and methods to perform the tasks comprising a process.
b. Replace sequential activities with concurrent activities whenever possible.
c. Identify those activities that contribute to waste or add minimal value to the process
and target those for elimination.
d. Identify the time associated with each part of a process and identify how much of that
time is waste.
e. Utilize all sequential activities whenever possible as concurrent activities are
wasteful.
Which of the following is not a supplier-specific barrier to supplier development?
a. No immediate benefit to supplier development is evident in the buying organization.
b. Lack of commitment on the part of suppliers management.
c. Suppliers management agrees to improvements but fails to implement the proposals.
d. Supplier lacks engineering resources to implement solutions.
e. Supplier lacks employee skill base to implement solutions.
For the effective negotiator, it is acceptable to give away any concession without
getting something of equal or greater value in return.
a. True
b. False