Outsourcing is also sometimes thought to be similar to subcontracting, joint venturing,
and contract manufacturing. Contracting is the purchasing of goods or services to
facilitate a business process owned by the buyer. The outsourcing point of departure
from these concepts is the ________________ of all associated internal business
process activities.
A. date of implementation
B. agreement for the outsourcing
C. need to reduce the costs
D. desire to reduce the expenses
E. complete transfer
____________ is the sum of the actual and potential resources embedded within,
available through, and derived from the network of relationships possessed by an
individual or social unit.
A. Political capital
B. Operating capital
C. Total assets
D. Social capital
E. Cash flows
Buyer and supplier relationships have become increasingly important for a number of
reasons. All of the following reasons are correct with one exception. Which one is
incorrect?
A. In some market segments, it is estimated that 40 percent or more of total product
revenue often passes directly to suppliers as payment for materials, profits, and
shipment.
B. This significant transfer of value downstream emphasizes the importance and
significance of supply chain relationship management.
C. With the decreasing number of suppliers used by buying firms, it is more important
than ever to maintain strong buyer-supplier relationships.
D. There is a trend toward specialization away from manufacturing an entire product
and to more contract manufacturing and purchasing.
E. For any buying organization to stay competitive in today’s aggressive market
sectors, it is essential that they maintain strong relationships with their best contract
manufacturers and suppliers.
_____________________ is known as the father of the Japanese post-war industrial
revival and was regarded by many as the leading quality guru in the United States.
A. Dr. Malcolm Baldridge
B. Dr. Samuel E. Edwards
C. Dr. Malcolm Deming
D. Dr. Thomas Edison
E. Dr. W. Edwards Deming
There are some definite benefits to utilizing ______. The first major benefit is reduced
labor. Higher information quality due to a reduction in data entry errors also can be
attributed to ______
A. EDI / EDI
B. EID / EID
C. FDIC / FDIC
D. RAF / RAF
E. CSI / CSI
The ____________ process is complex and leads to many assumptions and estimates.
The entire project should be audited to analyze the differences.
A. budgeting
B. capital acquisition
C. strategic planning
D. SWOT analysis
E. expansion
Performance-based evaluations assess the company at the time its product or service
has been delivered.
A. True
B. False
A final key element of an effective buyer–supplier relationship is
____________________.
A. the performance evaluation
B. the monitoring of performance
C. the control element
D. the reward element
E. the incentive to perform well
Systems contracting is a purchasing management technique that seeks __________ of
an item from the time a need is recognized to the time that need is fulfilled.
A. on time delivery
B. an overall increase in the quality
C. an overall increase in the price
D. an overall increase in the effectiveness
E. overall reduction in the cost
In the current climate of increasing health care costs, ____________ must be optimized
without sacrificing the level of service provided.
A. production
B. customer service
C. patient care
D. technology
E. systems inventory
The _____ solution assumes individual utilities are not comparable. It is of a normative
nature and assumes away such features as bargaining ability.
A. Nash
B. Noah
C. Parmer
D. Martin
E. Palmer
Searching for the appropriate supplier for a specific material or component part is
becoming _________________.
A. a difficult task
B. a strategic issue in itself
C. more difficult as time goes by
D. a major purchasing issue
E. easier with experience
The ______ cycle is both a link and a set of activities. As a link, the ______ cycle
facilitates the flow of information and materials.
A. order / order
B. communications / communications
C. life / life
D. production / production
E. product / product
The main elements of an EDI system are:
A. computer hardware, software
B. computer compatibility between the sender and receiver
C. subscription to a common network
D. all of the above
E. “A†and “B†only
Despite today’s competitive markets, it may not be cost-effective to procure used
equipment. Depending on the purpose and expected use of the purchased equipment, it
may be more cost-effective to buy new equipment.
A. True
B. False
In the _______________ method, users or buyers review quantities periodically at fixed
intervals of time and an order is placed for a quantity sufficient to replenish the stock to
a predetermined maximum level.
A. fixed inventory level (FIL)
B. predetermined inventory level (PIL)
C. professional order quantity (POQ)
D. fixed order interval (FOI)
E. Fulbright Order Quantity (FOQ)
Depending on the performance and strength of the dollar, goods can cost American
firms different amounts from what’s expected.
A. True
B. False
There are various semi-processed materials intended for further processing—raw
stock, crude oil, bituminous coal, paperboard, paper, lumber, copper, wheat, cotton, for
example. These materials are called _____________.
A. supplies
B. commodities
C. raw materials
D. semi-processed supplies
E. production supplies
__________ percent of the firms surveyed using JIT practices in the United States
indicated that they had serious problems regarding lack of support from engineering.
A. Nineteen
B. Twenty-nine
C. Sixty-nine
D. Forty-nine
E. Thirty-nine
Abandonment of partners may lead to __________, making future partners _________
to attract.
A. increased production / easier
B. suspicion / difficult easier
C. greater opportunities / easier
D. a search for new partners / somewhat easier
E. suspicion / difficult
The best strategy is to give the other side the impression that one is _________.
A. tough
B. fair
C. rigid
D. tough but fair
E. not easily pushed around
A cost-based approach cannot succeed in a competitive market if the product does not
remain acceptable to the Department of Commerce.
A. True
B. False
One of the most important variables to consider is the exchange rate of currencies.
Since predicting the fluctuation in currency markets is relatively easy, foreign purchases
may actually cost less than negotiated depending on the length of the contract.
A. True
B. False
A buyer must not only satisfy cost, quality, and lead-time goals, but also stay within
______________ constraints.
A. quality and inventory
B. financial and budgetary
C. quality and budgetary
D. technological and budgetary
E. quantity and consumer
The ___________________ is defined as the present value of future flows divided by
the initial investment.
A. profitability index (PI)
B. return on investment (ROI)
C. acid test (AT)
D. profit after tax (PAT)
E. investment index (II)
The certification criteria can be changed and updated as recertification may be required.
Thus, the “hurdle†can be lowered until there are a few suppliers left. In
combination with certification are the price and productivity hurdles. OEMs can add
these criteria to make it easier to be a “select†supplier.
A. True
B. False
The __________ system is a powerful management tool that could easily determine the
success or failure of the manufacturing system.
A. MBO
B. CAD
C. CAM
D. TQM
E. JIT (lean)
_________ is the non monetary exchange of goods-for-goods.
A. Barter
B. Offsets
C. Indirect offsets
D. Coproduction
E. Licensed production
Payoffs result from various aspects of the negotiated agreement. For example, certain
terms may yield a specific amount of profit, or there may be a bonus for attaining a
specified agreement, or the time spent in bargaining may involve certain costs. This is
referring to __________.
A. Social relationships
B. Compensation systems
C. Bargaining systems
D. Bargaining strategies
E. Payoff system
Many companies turned to JIT looking for a relatively _________________ that would
yield substantial short-term benefits. Over the years, these companies have come to
realize the tremendous effort and commitment required to make a JIT system run
smoothly.
A. painless organizational surgery
B. painless operational surgery
C. easy manufacturing process
D. easy operational process
E. painless financial surgery
As the recipient of their customer’s _____ efforts, the supply firm manager has the
opportunity to improve the relationship with the customer. Improved relationships can
result in increased market share, growth opportunities and other benefits.
A. MOD
B. SOP
C. PODS
D. POS
E. SD
A _______ discount represents the compensation for the buyer who eliminates a
distributor or other middlemen from the transaction. _______ discounts are usually
used by the manufacturer to protect a unique selling opportunity. This is accomplished
by providing the buying firm an incentive to buy directly from the manufacturer.
A. cash / Cash
B. quantity / Quantity
C. seasonal / Seasonal
D. quality / Quality
E. trade / Trade