___________ involves facilitating the movements of raw materials and component
parts from suppliers through the firm’s manufacturing process to the ultimate
customers.
A. Production
B. Processing
C. Production management
D. Process management
E. Transportation
In most instances, the purchasing official initiates an invitation to do business. The
purchasing official issues a _____________.
A. request for quotation
B. requisition
C. purchase order
D. work order
E. contract
Rail transportation is generally less expensive than air and truck modes. Rail cargo is
usually shipped from terminal to terminal; therefore, flexibility is not an attribute.
A. True
B. False
As defined by Maloni and Benton: the power of a supply chain member [is] the ability
to control the decision variables in the supply strategy of another member in a given
chain at a different level of the supply chain. It should be different from the influenced
member’s original level of control over their own supply strategy.
A. True
B. False
All marketing strategies are compatible with the JIT system.
A. True
B. False
The supply chain relationship pegging system consists of four phases.
Which of the following is notone of the four phases?
A. Phase I is an assessment of the current performance gaps in the process.
B. Phase II consists of questionnaire development, interviews, or other data collection
methods.
C. Phase III is the certification and planning phase.
D. The final phase (Phase IV) is the interpretation stage.
In order to successfully achieve a __________, buying and supplying organizations
must continuously improve their processes.
A. zero defect target
B. TQM goal
C. quality award
D. perfection goal or objective
E. productivity goal or objective
The direct and indirect costs (discussed in the textbook) tend to add unexpected costs to
purchased items. However, the significant benefits associated with offshore sourcing
enable the buying firm to ______________ domestic suppliers.
A. gain leverage over
B. compete effectively with
C. reduce costs as compared to
D. negotiate more effectively with
E. reduce the number of
In situations where discounts are not available, the price per unit is constant regardless
of the number of units ordered.
A. True
B. False
The seller’s bargaining strengths depend on the following:
•The sellers current capacity
•The probability of being the successful bidder
•The sellers deadline
•The status of the seller
A. True
B. False
_________ discounts are discounts granted to the buyer for buying larger quantities.
A. Trade
B. Cash
C. Seasonal
D. Preferred
E. Quantity
Planning must be done before performing any function. A schedule is a time-phased
plan. The principal uses of schedules in the implementation process are outlined in the
textbook. The list below contains items from the section entitled, During Project. One
does not belong. Which one is incorrect?
A. Enables the contractor and the administrator to prepare a checklist of key dates,
activities, resources, and so on.
B. Aids in tracking expenses, both direct and indirect costs.
C. Provides a means for evaluating the effects of changes and delays.
D. Serves as a basis for evaluating progress.
E. Aids in the coordination of resources.
Requests for quotes (RFQs) are more traumatic for maintaining healthy relationships
between buying and selling firms.
A. True
B. False
Payback is the best known investment criterion. Payback is the number of ________ it
takes to repay the initial investment.
A. payments
B. quarters
C. years
D. months
E. premiums
Potential outsourcing suppliers must be _____________ and ___________.
A. recruited / interviewed
B. identified / investigated
C. interviewed / selected
D. selected / qualified
E. qualified / available
In the area of inventory management, the purchasing professional should make explicit
decisions regarding which of the following?
A. What to stock
B. How much to invest
C. How much service to offer
D. All the above
E. “A†and “B†only
The ________ JIT production system has been erected based on the premise of
minimizing _________________ (waste) by reducing or eliminating discrete batches.
A. computer controlled/batches or lots
B. computer controlled/inventories
C. kanban-controlled/stock on hand
D. kanban-controlled/work-in-process inventories
E. computer controlled/stock on hand
____________ is often the most costly and time-consuming component of purchasing
management.
A. Negotiating
B. Bidding
C. Transportation
D. Analyzing
E. Organizing
The acronym “EOQ†is defined as _______________.
A. economic order quantity
B. economical order quantity
C. equal opportunity quantity
D. equal order quantity
E. economic organizational quantity
Cryptography is the science of securing information. The technology is based on
scrambling information and then unscrambling it.
A. True
B. False
The organization must have a set of ______________ that ensure survival in a
competitive marketplace.
A. values
B. beliefs
C. strategic plans
D. contingency plans
E. core capabilities
In dynamic business environments, __________________ is a major survival factor.
A. reducing costs
B. increasing sales maintaining a competitive advantage
C. maintaining a competitive advantage
D. improving quality
E. controlling expenses
The truck mode is used to transport a variety of perishable consumer goods, such as
fresh meats, frozen meats, dairy products, baked goods, and beverages. The primary
advantages of this mode are _______________.
A. reliability and low cost
B. flexibility and versatility
C. low cost and versatility
D. flexibility and low cost
E. on time delivery and low cost
___________ convey the freight terms and act both as a contract for carriage and a
receipt for delivery.
A. Shipping orders
B. Bills of trucking
C. Bills of lading
D. Freight bills
E. Purchase orders
In addition to the supplier profiles, the buying organization should clearly establish
expectations for the potential suppliers and discuss the __________and the
_________________for the outsourcing activity.
A. standards / employee training
B. costs / delivery
C. scope of work / appropriate pricing
D. quality / quantity
E. type of work / quality
Negotiations should not be used when there are time constraints, the specifications are
not clearly stated, there are not enough sellers, and the dollar value is too low to
consider using the competitive bidding process.
A. True
B. False
The design of a product must “be __________†given the process capability of the
supplier. Within that range, top management sets the quality level—the degree to
which the product functionally satisfies customers.
A. producible
B. profitable
C. useful
D. effective
E. functional
If the selling firm fails to give explicit specifications and/or prices for alternative
quantities of the item, what appears to be a good buy may result in an excessive price.
A. True
B. False
Before firms can enjoy the benefits of a buyer–supplier partnership, they must first
develop and design the partnership implementation process. A supplier partnership
involves a significant attitudinal as well as structural change from traditional supply
arrangements, so the allying firms must be meticulous to ensure that a true win-win
partnership is developed.
A. True
B. False
All of the following, with one exception, are the minimum necessary variables for a
model of the overall bargaining process (which) include both the decision maker’s
and the opponent’s ______________. Which one is the exception?
A. initial offers
B. desired outcomes
C. rate of concession
D. the final maximum offer
E. maximum level of concession (zero profit level)
Outsourcing can _______________ for a firm that would normally produce a part
internally.
A. provide a competitive advantage
B. reduce costs
C. improve productivity
D. improve gross margins
E. produce many benefits