In order to be successful, the project must come in meeting the SPA, on time and within
budget.
A. True
B. False
The ratios of materials related costs are increasing for all of the following reasons with
one exception.
A. inflation and exchange rates
B. increased use of synthetic materials
C. sources of supply
D. complex high-value products
Management of inventories is a major interest of purchasing managers.
In many industries, the investment in inventories comprises a substantial share of the
firm’s assets. If the productivity of the inventory asset can be enhanced, the
improvement will go directly to the bottom line.
A. True
B. False
The _________ see little incentive in adopting the JIT approach when the primary
benefits of the program go to the buyer.
A. customers
B. suppliers
C. employees
D. stockholders
E. stakeholders
A typical purchasing department is responsible for:
A. developing the company’s goals.
B. writing the company’s mission statement.
C. the acquisition of a broad range of materials and supplies.
D. monitoring the executives’ expense accounts.
E. selling a broad range of materials and products.
If expected ________ value is high for leased equipment, the cost of ownership to the
lessee may be lower. In this case, the lessee should write a contract that will enable it to
buy the fixed asset at the end of the lease term.
A. purchase
B. salvage
C. terminal
D. original
E. acquisition
The main arguments for __________ sourcing are competition and assured supply.
A. matrix
B. multi
C. mono
D. multiple
E. metro
The buying professional who is considering offshore sourcing must be prepared to fully
analyze both the _______________ factors.
A. financial and competitive
B. competitive and cost
C. quantitative and capacity
D. capacity and quality
E. qualitative and quantitative
In the case of fast-moving technology, it is possible for the lessee to shift the risk level
to the lessor. Computer technology is a good example of the risk of ______________.
A. being in the computer business
B. doing business
C. obsolescence
D. being a “cutting-edge†company
E. being in a competitive market
A long-term relationship provides the ability to ____________ and integrate planning,
technology, and processes.
A. share assets strategize
B. share liabilities
C. strategize
D. reduce inventory
E. reduce assets
Purchasing personnel routinely sign purchase orders and contracts committing the
company to the specific terms and conditions of purchase orders and contracts. The
purchasing official has no personal liability providing that the following requirements
are met with one exception. That one exception is:
A. The name of the principal or company is shown on the document.
B. The purchasing agent has a personal liability bond.
C. The agency relation is shown on the document.
D. All parties involved know that the purchasing agent is acting on behalf of the
company or principal.
E. The purchasing agent is acting within the scope of his or her authority for the
transaction.
The kanban card contains the part number, the part description, the type of container,
and various workstation information. The kanban production control system uses
simple, visual signals to control the movement of materials between work centers as
well as the production of new materials to replenish those sent downstream to the next
work center.
A. True
B. False
In case the supplier is unwilling to give the buying firm a __________, the purchasing
professional should attempt to offer the seller (a) n ________ contract.
A. reasonable price / tentative
B. firm offer / binding
C. favorable offer / sweetheart
D. firm offer / option
E. favorable offer / option
_________ is the extent to which a supplier can accommodate a customer’s
requests. Perhaps the request is for special processing, packaging, or shipment.
A. Customer service Flexibility
B. Customizing
C. Customer satisfaction
D. Flexibility
E. Programming
Even though the technology of _________ is steeped in statistics and manufacturing
engineering, materials managers first need to consider ________ as part of the
expectations of customers, whether intermediate or final.
A. design / standards
B. quality / design
C. production / quality
D. production / design
E. quality / quality
In the ________ bargaining situation, the profits (and/or losses) of the respective
bargainers always sum to the same fixed amount. The term _________ stands for the
fact that what one bargainer gains, the other losses and the gains (and/or losses) net out
to be _______.
A. net-sum / net-sum / one
B. zero-sum / zero-sum / zero
C. routine-sum / routine-sum / two
D. zero-sum / zero-sum / ten
E. net-sum / net-sum / zero
One of the most important and complex decisions a firm has to make is how much to
_____________________.
A. buy for its production lint
B. charge for its products and services
C. pay for its items and services
D. pay its employees
E. charge off as expenses
____________ is a concept that applies to all suppliers whether they are external to the
company or internal.
A. Public relations
B. Customer relations
C. Customer service
D. Customer satisfaction
E. Public service
Among the better-known lot-sizing methods for the single item, non-discount,
time-phased, certain-demand models are:
(1) lot for lot,
(2) economic order quantity,
(3) periodic order quantity,
(4) least unit cost,
(5) McLaren’s order moment,
(6) Silver-Meal, and
(7) the Wagner-Whitin dynamic programming algorithm.
A. True
B. False
______________ can be defined as a method of evaluating current and requested
capital equipment by considering the results of published clinical investigations and of
physical assessment of the equipment in the decision-making process.
A. Capital budgeting
B. Technological assessment
C. Price-cost analysis
D. Strategic and Operations Planning
E. Capital assessment
Capital equipment acquisitions require health facilities to go through an internally
defined process. Differing corporate policies and preferred methods of financing will
impact this process. A capital item request initiates the process. The requesting
departments are required to provide _______________. It is important that this
information be as accurate and precise as possible.
A. information on cost savings
B. a list of the specifications for the desired item
C. a price-cost analysis
D. an approved budget for the item
E. information on utilization statistics
Much debate has taken place concerning the number of suppliers a firm should use.
1. One side of the debate is the _____________ side. This involves the use of two or
more suppliers.
2. The other side of the debate is the ____________ policy, in which only one
supplier is used to supply a particular part.
A. multiple-sources / single-source
B. matrix-sources / hybrid-source
C. metroplex / single-source
D. tri-source / mono-source
E. multi-source / mono-source
Critical to the implementation of purchasing and supply management techniques is the
development of _________________.
A. suppliers
B. supply chain partnerships
C. sources
D. long range strategies
E. a business plan
The focus has been on a single aspect of outsourcing: the __________ of jobs, and, in
particular, the outsourcing of ___________jobs.
A. reduction / blue-collar
B. reduction / manufacturing
C. migration / white-collar
D. migration / service sector
E. creation / service center
In general, the guiding factors in determining which system is best are ____________
and _______________ of the system.
A. quality / cost
B. quality / cost of implementation
C. ease of implementation / cost of implementation
D. reliability / cost
E. ease of implementation / overall reliability
It is virtually impossible to generalize why organizations outsource various business
processes. The final outsourcing decision depends on whether the CEO, CFO, or CIO
initiates the outsourcing proposal. Whichever executive initiates the outsourcing
proposal, a reduction in __________________is usually the primary driver.
A. hidden costs
B. indirect costs
C. labor costs
D. direct operating costs
E. hidden operating costs
The relationship between higher levels of vertical integration and an increase in
bureaucratic costs has been noted in the extant academic literature. Some firms have
cast the decision to _____________ versus the decision to externally source as a
comparison between the costs of bureaucracy and the cost of _____________.
A. vertically integrate / external coordination
B. horizontally integrate / internal coordination
C. merge / management coordination
D. expand horizontally / supervision
E. vertically integrate / internal coordination
There are many ethical considerations that (companies) must learn in order to be
successful. This is one reason that many companies hire _________ to do their
sourcing.
A. agents
B. importers
C. nationals
D. brokers
E. wholesalers
In today’s competitive environment, progressive firms must be able to produce
quality products at reasonable prices. Product quality is a direct result of the
_______________ and the ___________.
A. management / workforce
B. engineers / designers
C. production workforce / suppliers
D. production department / operations division
E. employees / machinery
The buyer must ensure that the ___________ of material is purchased to satisfy the
demand; otherwise, ___________ may occur, resulting in _______ customer service.
A. right quality / shortages / poor
B. right quality / excesses / poor
C. right quantity / shortages / poor
D. right quantity / excesses / good
E. right quantity / longages / poor
A combined _____________ approach will help provide the truest solution and best
approach to understanding bargaining and negotiation situations and their outcomes.
A. economic/psychology
B. statistical/physical
C. economic/financial
D. financial/psychological
E. management/economic
It is important to make sure that all ______________ feel as though their interests were
represented and considered in making the decision.
A. employees
B. stockholders
C. managers
D. stakeholders
E. union members
________________________ occur as a result of an offset are research and
development agreements conducted in the buying country.
A. Offsets
B. Indirect offsets
C. Technology transfers
D. Coproduction
E. Licensed production
Suppliers with ____________ and who are reliable in meeting their _________
minimize the problem of material shortages for the manufacturer; as a result, the
company’s production can be more dependable in meeting the customers’
____________.
A. long lead times / goals / expectations
B. short lead times / delivery times / expectations
C. high expectations / due dates / due dates
D. short lead times / expectations / expectations
E. short lead times / due dates / due dates
To extend the commitment to increasing productivity in all departments within a given
facility, many companies have adopted the concept of __________.
A. cost centers
B. profit centers
C. profit groups
D. cost groups
E. cost divisions