Archives: Quiz

Why do consumers tend to gravitate towards non-profit firms when evaluating credence goods? a) Consumers like giving to charities b) Non-profit firms charge lower prices c) Consumers can deduct some or all of the purchase price for tax purposes d) […]

What is a reason that companies might want to ‘buy’ instead of ‘make’ talent from the market when looking to acquire employees with a particular skill set? a) External training methods are better than internal ones b) Companies are always […]

Which of the following is a source of diseconomies of scale at a large firm? a) Labor costs b) Spreading specialized resources too thin c) Conflicts of interest d) Incentive processes e) All of the above Which of the following […]

What is one way to measure a firm’s willingness-to-pay? a) Marginal profit per unit of production b) Value added analysis c) Cost-benefit analysis d) Input-output analysis e) Sales-per-cost analysis What term does Sutton use to describe the costs of establishing […]

The laws of contracts are concerned with governing the relationship of principals and agents. a. True b. False _____ involves the buyer seeking a court order forcing the seller to deliver the goods. a. Arbitration b. Specific performance c. An […]

In the _____, the supplier analyzes the market to find the combination of price per unit and quantity of sales that maximizes its profit on the assumption that (1) lowering the price per unit will result in more units being […]

There is only one common approach to supply base rationalization and optimization. a. True b. False The complexity and value of a required purchase does not influence the extent to which a buyer evaluates potential supply sources. a. True b. […]

_____ inventory is in transit to a customer or is located throughout distribution channels. a. Pipeline/in-transi b. MRO c. WIP d. Raw materials and semifinished items e. Just-in-time An emphasis on finished product rather than process demands that a supplier […]

Salaries traditionally take the largest share of the purchasing administrative budget. a. True b. False A critical assessment of the increased supply risks associated with offshore sources must be made after contracting, not before a commitment is made. a. True […]

The _____ clause of a contract describes the course of events that occur if there are unforeseen calamities such as earthquakes or hurricanes that prevent a supplier from fulfilling its obligations to the buyer. a. liability b. force majeure (LO […]

Examples of irregular dealings with suppliers include all of the following except _____. a. accepting bribes from suppliers b. accepting business lunches before a contract is negotiated c. accepting late bids d. owning a stake in a suppliers company e. […]

The _____ clause in a contract establishes where bills, invoices, notices, and other documents should be sent, as well as the key contact person at the buying and supplying companies to whom all questions and issues concerning the relationship. a. […]

According to Genichi Taguchi, any deviation from a target value carries with it some level of opportunity loss due to scrap, rework, and customer dissatisfaction. a. True b. False Hedging is a form of risk insurance that can protect both […]

Despite its apparent simplicity, barter is one of the least-practiced forms of countertrade today. a. True b. False Certain suppliers who may present the lowest cost seldom present greater risks. a. True b. False Answer: False Strategic cost management approaches […]

A primary objective of using teams is to bring together individuals with common perspectives and expertise to perform better on a task compared to individuals or departments acting along. a. True b. False E-negotiators generally ask more questions and tend […]

According to Cialdini, _____ is a principle that says we prefer to be consistent in our beliefs and actions. a. scarcity b. liking c. social proof d. reciprocation e. consistency Supplier rationalization and optimization should be a one-time activity. a. […]

Which of the following is not one of the conditions under which negotiation is effective? a. When the purchase requires agreement about a wide range of performance factors, such as price, quality, delivery, risk sharing, and product support. b. When […]

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 […]

Learning-curve analysis highlights a key reason why many purchasers consolidate purchase volumes with fewer suppliers. a. True b. False Freight shipped _____ means the supplier retains title to the goods and controls the shipment until it is physically received and […]

A smaller supplier with limited capacity for growth may need to eliminate some existing customers to meet the increased requirements of a larger customer. a. True b. False Under the UCC, the risk of loss is with the buyer until […]

Supply management is a broader concept than purchasing. a. True b. False How well suppliers purchase their goods and services has no direct impact on purchase price levels. a. True b. False Answer: False The _____ clause in a contract […]

With a _____, both parties agree that payment occurs as long as exchange rates do not fluctuate outside an agreed-upon range or band. a. hedging agreement b. payment in a foreign currency c. speculation agreement d. currency adjustment clause e. […]

The parameters on which a professional services supplier is evaluated should include, but not be limited to, quality, cost management, delivery, technical support, and wavelength. a. True b. False _____ represents the link between a company and its customers. a. […]

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 […]

Currently, vendors specializing in CRM and SRM systems tend to provide lower levels of functionality in their chosen areas than do ERP vendors. a. True b. False Big data combined with the capabilities of analytical tools combined with high talent […]

All of the following are examples of factors in Porters market internal competition force except _____. a. speed of industry growth b. buyer propensity to substitute c. exit barriers d. switching costs e. capacity utilization Material discrepancies usually result from […]

Supply managers should emphasize purchasing efficiency over purchasing effectiveness as a strict measure of performance. a. True b. False Which of the following is one of the reasons for measuring performance? a. Support better decision making. b. Support better communication. […]

_____ focus on achieving standardization of components, systems, and services and application of currently used purchased items or the use of industry-standard versus unique items. a. First insight measures b. Standardization measures c. Responsiveness measures d. Cycle time reduction measures […]

In _____, there is an intense focus on identifying and eliminating common causes of waste that add cost, time, and effort to the product or service while not adding value to the customer. a. supplier evaluation and selection process b. […]

A/An _____ is a set of promises between two or more parties the performance of which the law expects, the breach of which the law provides remedies. a. offer b. agreement c. acceptance d. contract e. breach Most of the […]

_____ refers to the relationship between planned and actual sacrifices made to realize a previously agreed-upon goal. a. Strategic benchmarking b. Effectiveness c. Efficiency d. Operational benchmarking e. None of the above. If the requested item is complex or requires […]

The advantage of consignment to the buyer is the ability to defer ownership and avoid committing working capital and incurring carrying charges. a. True b. False In general, the more important the commodity, the less likely that cross-functional members and […]

In some cases, a firm may be looking to develop a long-term relationship with a potential supplier, particularly if the supplier is in the Routine quadrant of the Strategy Portfolio Matrix and the category of spend is low volume and […]

_____ is the avoidance of nonconformance in products and services by not allowing errors or defects to occur in the first place. a. Detection b. Inspection c. Prevention d. The hidden factory e. Optimization Experienced negotiators do not need to […]

The _____ group includes the activities supporting the day-to-day operations of the purchasing or materials function. a. material handling b. market intelligence and research c. administration and data management d. operational support and follow-up e. sourcing, negotiation, and contract management […]

All buyer-supplier negotiations are relatively straightforward, only requiring rudimentary preparation and planning. a. True b. False A/An _____ contract is designed to provide access to expensive computer networks and software that single companies are unable to afford on their own. […]

According to Ohno and Toyota, _____ is a category of waste that moves material unnecessarily or long distances. a. unnecessary movement b. over-processing c. defect d. unnecessary transport e. overproduction A _____ has unique requirements or niche suppliers, yet is […]

_____ actions and resources are those actions in a process that must be done to make the product but create no value for the customer. a. Non-value-adding b. Necessary non-value-adding c. Value-adding d. Inventory surplus e. None of the above. […]

In recent years, the concept of quality has changed radically from meeting customer requirements or expectations to exceeding them. a. True b. False Which of the following is not a common organizational mechanism to enable center-led organization design? a. Lead […]

If the purpose of buying currency contracts is to realize a net gain, then the purchaser is _____ and not _____. a. hedging¦.speculating b. speculating¦.hedging c. speculating¦.financing d. hedging¦.financing e. Purchasers do not get involved in managing currency fluctuation as […]

_____ systems kick off and control the movement of materials among supply chain partners. a. Network design b. EDI c. MRP d. Execution e. Transaction processing Which of the following is not one of the common assumptions typically used in […]

For companies that routinely use or produce hazardous materials, the law requires a policy that outlines in detail the legal requirements and conditions for the handling of toxic waste.a. True b. False A process that is stable and in control […]

_____ is a negotiation tactic that involves taking an abnormally high initial position on an issue. a. Low ball b. High ball c. Best and final offer d. Curve ball e. Knuckleball In supplier evaluation, different aspects of _____ include […]

_____ is a negotiation tactic that involves not immediately responding when the other party makes an offer in the hope that an awkward silence will encourage further offers or concessions from the other party. a. Trial balloon b. Silence c. […]

A _____ is defined as a purchase that is made on a nonrecurring or limited basis with little or no attention of developed an ongoing relationship with the supplier. a. purchasing alliance b. long-term contract c. short-term contract d. spot […]

Competition today is no longer between firms; it is between the supply chains of those firms. a. True b. False _____ refers to the process of comparing supplier prices against external price benchmarks, without direct knowledge of the suppliers costs. […]

Many negotiators fail to prepare adequately before entering into a formal negotiation oftentimes because of a very short timeframe in which to make a deal. a. True b. False _____ can be defined as how supply chain members communicate and […]

A good rule of thumb is to remember that purchasers must always act in the best interests of their employer. a. True b. False Exempt carriers are highly regulated economically by the Surface Transportation Board. a. True b. False Answer: […]

Which of the following is not one of the wrong reasons for investing in inventory? a. Poor quality and material yield. b. Extended order-cycle times from global sourcing. c. Hedge against marketplace uncertainty. d. Specifying custom items for standard applications. […]

The greatest competition between domestic transportation modes involves rail and motor carriers. a. True b. False Policies defining the role of purchasing often serve as a general or broad policy statement from which more detailed or specific policies evolve. a. […]