The competitive bidding process must begin with an assessment sizing up the
suppliers’ _________________.
A. labor and materials costs
B. pricing strategies on competitive positions
C. power
D. need for sales
E. competitive strength
Primary sources assume most of the functions of the supply management department,
much the same as the stockless inventory method described in the textbook. There are
many advantages to this arrangement in that __________ costs for the hospital are
reduced and redundancy of activities as well as stock is reduced.
A. overhead
B. manpower
C. fixed
D. material
E. supply
_________ costs are associated with non-manufacturing-related costs.
Insurance, managerial salaries, property taxes, and depreciation expenses are examples
of _________ costs.
A. Direct / direct
B. Indirect / indirect
Some of the tasks involved in a typical complex project are given below:
•Contractors/managers must be assigned direct cost center responsibility early.
•Joint reviews of direct cost must take place on a scheduled basis.
•Use tracking estimates to monitor budgeted versus actual costs.
•Work hours must not be controlled.
A. True
B. False
Supply coordination involves both _______________________ of the organization.
A. discipline and authority
B. knowledge and expertise
C. structure and authority
D. structure discipline and design
E. discipline and design
Individual differences in bargaining predispositions may affect bargaining behavior.
This is referred to as ________________.
A. Standard bargaining predispositions
B. Routine bargaining predispositions
C. Individualized bargaining predispositions
D. Cooperative bargaining predispositions
E. General bargaining predispositions
The final step in the partnering process includes the maintenance of the relationship to
______________________________.
A. improve communications and processes
B. foster good communications and relationships
C. either enhance its development or bring about its dissolution
D. develop unified goals and objectives
E. either improve communications or bring the two organizations closer together
The analysis phase (of the buying decision) requires the decision maker to investigate
_____________ sources of supply.
A. at least two potential
B. at least five potential
C. all potential
D. the best
E. the best three
A bargainer’s resistance to making concessions is negatively correlated to both the
time required to make a further concession and the probability of withdrawing from the
negotiations.
A. True
B. False
____________ is defined as: No stockout is allowed at a facility. Interdepartmental
transfers can be used to satisfy these local stockouts. However, the item must be
available in the facility as a whole.
A. Use-location urgency
B. No urgency
C. Facility-location urgency
D. Metro-location urgency
E. Regional-location urgency
The specification is ____________________, including specific characteristics such as
weights and measurements that enable the product to work in a manner acceptable to
the ___________.
A. a governmental document / inspector
B. a state mandate / auditor
C. a plan / buyer
D. a description of the required output / consumer
E. program / client
JIT is also referred to as _______production.
A. mass
B. quality
C. lean
D. custom
E. short run​
When the seller makes an agreement to allow the buyer a specific time limit to make
the purchase, _____________ will pass from the offeree to the offeror in return for a
firm commitment.
A. full commitment
B. trust
C. services
D. accountability
E. consideration
The major psychological influence in a buyer–supplier relationship is __________. It
is conceivable that a (n) _________ buyer could force a supplier to eliminate its
overhead from the ultimate price. The danger for the buyer is that this so-called good
buy may drive the supplier out of business and that this reduction in competition may
result in massive price __________ in the long run.
A. prestige / chain store / discounts
B. feelings / strong / decreases
C. credibility / influential / increases
D. power / weak / decreases
E. power / powerful / increases
Before developing an initial base of qualified suppliers, the purchasing and requesting
user departments must develop a list of ____________ that are as detailed as possible.
A. potential suppliers
B. manufacturers
C. functional specifications
D. attributes
E. benefits
As cooperation and relationships between suppliers and manufacturers build up in a JIT
system, so do the opportunities to ______________________ and focus on
________________________.
A. lower costs of materials and supplies / reducing waste and shrinkage
B. conduct an extensive competitive analysis / reducing selling prices
C. conduct an extensive value analysis / reducing the cost of parts purchased
D. analyze competition / developing competitive strengths
E. conduct cost analysis / reducing the costs of doing business
Employers are responding to the increased health care benefits costs by moving away
from traditional employer-sponsored insurance plans to consumer-driven health-care
plans.
A. True
B. False
Phase Organizational Development
This phase involves development of sourcing strategies; setting of clearly outlined areas
to cut costs and improve profitability; establishment of a sourcing control system based
on frequent analysis and systematic approach; formulation of incentive programs; and
provisions for training by taking advantage of local ISM seminars and in-house sessions
on how to establish purchasing monitoring systems.
A. True
B. False
There is _________ associated with any feasible activity on the critical path.
A. a quality concern
B. a crash cost
C. a compression expense
D. a time line
E. slack
If a capital equipment request survives the new project ideas step, __________
estimates must be considered for each capital investment idea.
A. budget
B. income
C. profit
D. cash-flow
E. depreciation
The buyer must be thoroughly prepared for each and every negotiation. Data collection
is the first step in the preparation process. The next step involves setting the time and
place of the negotiations and then identifying the negotiation team members.
A. True
B. False
The JIT philosophy inherently attempts to reduce lead times for order completions.
Under traditional purchasing practices, the lead time is made up of all the following
components with one exception. Which one is the exception?
A. paperwork lead time
B. manufacturing time for supplier
C. transportation lead time
D. time spent on unpacking and storing
E. time spent on receiving and inspection
The physical and social setting of the bargaining may have an effect. Is the bargaining
being conducted in the home territory of one of the bargainers or on neutral ground?
What, if any, is the seating arrangement? Which of the factors is this statement
referring to?
A. Situational factors
B. Payoff system
C. Physical systems
D. Forum factors
E. Physical and maintenance factors
In the short term, a firm can sell its products ____________; however, at some point,
the firm will be required to _______________.
A. at low prices / make money or close up shop
B. at above average prices / get competitive
C. at high prices / become competitive or lose sales
D. below its total cost / make a profit or quit the business
E. competitive prices / become profitable
In its simplest form, “the manufacturing process†is a composition of the material
flows. Just-in-time (JIT) is designed to manage the flow of
________________________ .
A. materials
B. components
C. tools
D. associated information
E. All of the above
The price of a product or service should be expected to cover cost of _____________,
plus a reasonable profit.
A. production
B. promotion
C. distribution
D. all of the above
E. “A†and “B†only
Companies with a significant presence in the (air mode) market are Federal Express and
all of the following with one exception. Which is the exception?
A. UPS
B. KKLM
C. Airborne
D. DHL
E. U.S. Postal Service
The after-tax borrowing rate is commonly known as the ___________ rate.
A. fixed
B. adjustable
C. current
D. gross
E. discount
The ______ concept provides the basis for projecting future inventories in a
____________ operation.
A. RAP / retailing
B. MRP / manufacturing
C. MAP / service
D. PDQ / manufacturing
E. AAP / auto service
Failing to appreciate the ___________ concerns and proactively manage them will have
an adverse impact on the outsourcing engagement.
A. managers’
B. stockholders’
C. stakeholders’
D. employees’
E. bankers’
Supply management is a developing ____________ and an area of management
_______________.
A. discipline / responsibility
B. function / specialization
C. division / knowledge
D. position / knowledge
E. discipline / specialization
The ________ cash inflows and outflows of each capital project alternative must be
evaluated on an incremental cash-flow basis.
A. pre-tax
B. general
C. standard
D. major
E. after-tax
If setup cost and learning rates are ignored, a buying firm will, more than likely,
_______________.
A. become engaged in a price war
B. suffer from a competitive disadvantage
C. gain a competitive advantage
D. receive a major discount
E. fall into a competitive bidding trap
___________ is described as follows: CPM is usually used for projects with predictable
task times. CPM is a deterministic model that does not take into account variation in the
completion time, so only one number is used for an activity’s time estimate.
A. Specify each individual activity
B. Draw a network diagram
C. Update the CPM diagram as the project progresses
D. Sequence the activities
E. Estimate the completion time for each activity