It is a good idea to implement e-procurement on systems that have a high supply risk
and low profit impact, especially if there are a very limited number of suppliers to
choose from.
A. True
B. False
Critical items and systems are not the first place to apply a new e-procurement system.
A. True
B. False
Anything that will immediately impact profits or bottleneck your operations is not a
good place to experiment with a new electronic procurement system
A. True
B. False
In a reverse auction the competition between the sellers drives the price _______,
instead of _______, so the buyer pays _________ at the expense of the seller.
A. up / down / more
B. down / down / less
C. up / down / less
D. up / up less
E. down / up / less
The steering committee’s primary concerns are setting policy, checking on the results,
and monitoring to measure the effectiveness of the EDI system.
A. True
B. False
As more and more companies shift to EDI systems an inherent problem has been the
______________________________ .
A. lack of top management support.
B. lack of software.
C. different programs and systems that are being employed.
D. increased demand for equipment.
E. lack of employee support and skills.
_____________________ is a universal term given to any technology that uses radio
waves to identify and track items.
A. Point of Sale, or POS
B. Radio frequency identification, or RFID
C. Telzon
D. IBMR
E. OASIS
Through this process, RFID, often called ________, is produced. _______ in
manufacturing applications can be built directly into the product, affixed with adhesive
paper to form “smart labels,” or combined with packaging in a myriad of ways.
A. macros / Macros
B. inlays / Inlays
C. micros / Micros
D. implants / Implants
E. revs / Revs
An RFID system provides many advantages for companies, suppliers, and retailers.
Below is a list of some of the benefits RFID can offer:
1> Reduced labor costs.
2> Simplified business processes.
3> Improved inventory control.
4> Increased sales.
5> Increased shrinkage.
A. True
B. False
Buyers and sellers located on different continents can meet electronically. E-sourcing
will also lead to higher transactional accuracy and cost reductions for the entire supply
chain. E-sourcing creates value by :
1. Reducing the total cost of ownership
2. Streamlining the purchasing process and
3. Business innovation
A. True
B. False
Some _________ material purchasing situations may involve long intricate
negotiations.
A. Raw
B. Custom
C. Finished
D. Direct
E. Indirect
The following are key mistakes in the make-versus-buy decision:
1. In most cases, businesses are not proficient at identifying their core capabilities.
Buyers usually rationalize in-house decisions based on capacity capabilities.
2. Buying organizations wait too late to assess the value of consultants or strategic
partners.
3. Buyers do not recognize that the product or service is approaching maturity.
4. There are always new competitors with new technology attacking the market.
A. True
B. False
The following are key mistakes in the make-versus-buy decision:
•In most cases, businesses are not proficient at identifying their core capabilities.
Buyers usually rationalize in-house decisions based on capacity capabilities.
•Buying organizations wait too late to assess the value of consultants or strategic
partners.
•Buyers do not recognize that the product or service is approaching maturity.
•There are always new competitors with new technology attacking the market.
A. True
B. False
The buying firm, no matter how powerful, should attempt to obtain a ___________ and
good consensus.
A. fair price
B. market price
C. discount price
D. low price
E. standard price
__________ is the life blood of any business. Most firms store thousands of different
items.
A. Inventory
B. Buying
C. Human resources
D. Supplies
E. Capital
_____________ is defined as: No stockout is allowed at a use location. These are the
most urgent items and must be available to the materials users at all times.
A. Facility-location urgency
B. Regional-location urgency
C. Metro-location urgency
D. No urgency
E. Use-location urgency
___________ means that the title to the merchandise passes at the time and place of
delivery.
A. F.O.B. origin
B. F.O.B. destination
The buying firm will need to ensure that proper mechanisms are in place to make sure
that they are capable of detecting _____________ by an external source.
A. delivery failures
B. quantity failures
C. safety failures
D. cost failures
E. quality failures
The buying and selling organizations must follow the specific roles outlined in the
contract. The buying organization also must appoint a __________ manager. The
__________ manager and the suppliers must merge their independent plans into one
consensus plan.
A. coordinating / coordinating
B. relationship / relationship
C. contract / contract
D. purchasing / purchasing
E. supply / supply
Many businesses consider the cryptographic signature method known as
_________________________ as the most secure and reliable method of signing
contracts online.
A. Communications Information Analysis (CIA)
B. Public Key Infrastructure (PKI)
C. Public Knowledge Resources (PKR)
D. Public Key Information (PKI)
E. Random Information Modeling (RIM)
Once the system is developed, it then forces the various functions in the buying firm to
evaluate which suppliers truly add value. The rankings are aggregated to enable a
ranking of all suppliers. The company will then categorize the suppliers into one of
three categories:
A. standard, preferred, or cooperative.
B. standard, competitive, or preferred.
C. strategic, preferred, or. transactional.
D. preferred, critical, or transactional.
E. strategic, competitive edge, or standard.
Companies participate in a variety of supplier relationships and take on a variety of
roles.
A. True
B. False
Another problem (with indirect purchasing) is the tendency for employees to
intermittently buy indirect items “off contract.†This practice is referred to as
________________.
A. local purchasing
B. OC purchasing
C. maverick buying
D. MP
E. IOC purchasing
By definition, ___________ are homogeneous.
A. supplies
B. semi-processed goods
C. commodities
D. production supplies
E. raw materials
The world of _________________ commerce has become essential to the purchases of
ORM and MRO items.
A. business-to-consumer
B. consumer-to-consumer
C. manufacturer-to-manufacturer
D. vendor-to-vendor
E. business–to-business
The advantages associated with implementing the ________________ evaluation
program are that it can be implemented almost immediately and is the least expensive
of the three evaluation systems discussed in the textbook.
A. process-based
B. procedure-based
C. categorical
D. circular-ratio
E. performance
Buying firm managers should focus their _____ implementation efforts on suppliers
that exhibit commitment to the buying firm. Although the buying firm’s perceptions of
the supplier’s commitment are inherently biased, it represents the best proxy for the
supplier’s commitment.
A. MOD
B. PODS
C. SDP
D. POS
E. SOP
The terms of sale or purchase are used to identify the ______________ and are usually
expressed by an F.O.B. designation: F.O.B. origin or F.O.B. destination.
A. carrier
B. passage of title
C. shipping date
D. purchaser
E. shipper
Purchased inputs offer a potential source for helping a company develop
_____________ against its competitors.
A. leverage
B. a plan
C. a competitive strategy
D. a competitive edge
E. a long term plan
The _______ for an activity is the time between its earliest and latest start time, or
between its earliest and latest finish time.
A. sack time
B. slack time
C. crash time
D. compressed time
E. best time
__________ are used to transport low-valued, nonperishable products such as oil, diesel
fuel, jet fuel, kerosene, and natural gas.
A. Trucks
B. Rail cars
C. Pipelines
D. Barges
E. Water carriers
The inventory items that are the most important for a specific industry or firm should be
items that account for the greatest ___________.
A. number of sales
B. dollar value
C. mark-up
D. profit margin
E. total value
A third problem companies face in global sourcing is ___________. Many times there
are delays and confusion in translations.
A. negotiating
B. bargaining
C. communication
D. contracting
E. understanding one another
A firm competing on ________ must give high priority to purchasing costs. A firm
competing on flexibility must give high priority to _________ in buying material.
A. selling price / just-in-time
B. cost / lead time
C. cost / quality
D. selling price / lead time
E. quality / lead time
___________ is described as follows: The work breakdown structure, a listing can be
made of all the activities in the project. This listing can be used as the basis for adding
sequence and duration information in later steps.
A. Sequence the activities
B. Identify the critical path (longest path through the network)
C. Specify each individual activity
D. Draw a network diagram
E. Estimate the completion time for each activity
It appears clear that effective buyer–supplier relationships should include a
formalized procedure for ______________ the buyer’s expectations and
_____________ the supplier’s performance.
A. communicating / evaluating
B. setting / monitoring
C. establishing / evaluating
D. communicating / changing
E. establishing / changing
Various names have been used to describe the amount that must be exceeded in the
bargaining interaction in order to obtain a profit. Several of the “names†are listed
below. However, one is incorrect. Which one?
A. maximum concession point
B. breakeven point
C. net-sum point
D. zero-profit point
E. minimum disposition
______________ (QFD) focuses on how businesses develop high quality products for
(their) customers. QFD is driven by cross functional market research. This is the
process of understanding customer expectations, and how well providers of products
address these expectations.
A. Quality Fabrication and Development
B. Quantity Functional Development
C. Quality Function Deployment
D. Quick Functional Development
E. Quick Fabrication and Development
All supply management activities have potential for _________________ and hence
________________.
A. increased costs / declining profits
B. cost reduction / decreased waste
C. cost reduction / increased profit
D. expense control / improved net profit
E. costs reduction / improved cost of goods sold
______________ relates to whether or not the capital item is for the replacement of
current equipment, expansion of current technology, or expansion into a new
technological field.
A. The Hospital’s Mission
B. The Hospital’s Strategic Plan
C. Hospital Business objectives
D. The Operations and Strategic Plan
E. The Capital Budget
___________suppliers are those that can be easily replaced in a short time.
A. Standard
B. Transactional
C. Preferred
D. Cooperative
E. Common
General commodity carriers usually specialize in either truckload (TL) or
less-than-truckload (LTL) operations. Truckload shipments are defined by the ICC as
loads in excess of 10,000 pounds. Currently, there are more than 40,000 small truckload
carriers. These companies have been typically _____________.
A. moderately priced and highly organized
B. low-cost and nonunion
C. low-cost and unionized
D. high priced and nonunion
E. reliable and low-cost
Due to technical expertise, German negotiators are extremely cautious. The opponent
should be well prepared on technical details.
A. True
B. False
Traditional purchasing professionals who act as little more than order placers are giving
way to __________ involved ___________ managers who control vital inputs to the
production process.
A. strategically / analytical
B. highly / participative
C. strategically/ general
D. highly / general
E. highly/ operations
Most loans require the borrower to place a reasonable down payment. Leases generally
do require an initial down payment, beyond the first and last monthly payment.
A. True
B. False
When designing a certification program, careful attention should be paid to the
selection of criteria. Good certification should include all of the following issues with
one exception. Which is the exception?
A. quality assurance
B. financial health of the supplier
C. production scheduling methods
D. price ratio analysis abilities
E. cost accounting methods
In order to qualify for the (Malcolm Baldridge) Award, applicants must address the
following categories:
•Leadership
•Information and analysis
•Strategic quality planning
•Human resource development and management
•Management of process quality
•Quality and operational results
•Customer focus and satisfaction
A. True
B. False
The criterion for decision making in supply management is ______________.
A best value for the price
B. the lowest cost of ownership
C. total cost of ownership
D. the highest quality
E. the best delivery time