The seven (7) steps to effectively implement e-procurement are:
1. Start with non-critical items.
2. Bring all internal stakeholders on board with your new procurement process to
establish internal customer behavior.
3. Streamline, map, test, troubleshoot, and improve the process before expanding it to
external suppliers. Work with a favored supplier to test the system.
4. Leverage your system once it’s running. Exploit your full purchasing power by
using reverse auctions.
5. Aggregate buyers within your organization to increase your purchasing power and
gain better pricing.
6. Use an incremental approach to expand your system.
7. Once the bumps have been ironed out of the system, move on to the manufacturing
operations
A. True
​B. False
The effective buyer in a competitive environment will more than likely obtain
purchased goods and services at a __________ given that quality, delivery, and proper
quantities are appropriate.
A. market price
B. discount
C. fair price
D. low
E. bargain
Customer demand is fairly uniform but, because of the build schedules, the
requirements for the components are __________.
A. standard
B. stable
C. steady
D. lumpy
E. predictable
. Businesses have had to change radically in response to ________________.
A. government regulations
B. consumer demand burgeoning technologies
C. competition
D. consumer demand
E. economic conditions
The costs of global sourcing include some of the same costs found in domestic
sourcing; there are also costs that are different. These costs are grouped into the
following categories: _________________.
A. administrative
B. foreign
C. common
D. all of the above
E. “A†and “B†only
Changing economic and political environments, emerging technology versus labor, and
the changing nature of purchasing as a discipline—must influence the _______ of
purchasing and supply management.
A. role
B. systematic process
C. policies
D. rules
E. direction
_____________ is defined as: No stockout is allowed for the region. Interdepartmental
and inter-facility transfer can be used to satisfy the stockouts, but the item must be
available in the region as a whole.
A. Facility-location urgency
B. Use-location urgency
C. No urgency
D. Regional-location urgency
E. Strategic urgency
Recognizing that purchase price is but one element of the total cost picture, the scope of
____________ goes far beyond the purchase price for any given item.
A. contracting systems
B. Purchase Order Systems
C. systems contracting
D. materials contracting
Costs of stockouts are influenced by many factors in the health care arena. These
factors include the costs of extra materials, personnel inconvenience, personnel and
transportation costs, costs of expedited or emergency orders, lost sales as well as a
myriad of intangibles ranging from mild dissatisfaction of the practitioner staff, to the
serious impact that a shortage might have on the treatment and health of a patient.
Stockouts can be prevented on a temporary basis with substitutable products.
A. True
B. False
__________________ is becoming the most important competitive weapon necessary
to ensure survival in today’s competitive environment.
A. Strategic planning
B. Competitive analysis
C. A low price strategy
D. A differentiated market segmentation strategy
E. Price determination
Improvements in the kanban-controlled production systems have followed a pragmatic
approach, ________________. Therefore, success of the JIT production system must be
explained in conjunction with ________________, _________________, and lean
thinking.
A. management by objectives/management by objectives/zero defects
B. zero defects/zero defects/total quality management
C. continuous improvement/continuous improvement/ total quality management
D. total quality management/total quality management/zero defects
E. quality circles/quality circles/continuous improvement systems
In the case of dependent demand in which the hospital is producing an item,
____________ approach can be taken. This approach resembles a classic material
requirements plan, based upon a master production schedule.
A. an explosion-type
B. a master planning
C. customized inventory
D. POS
E. MBO
The first question a purchasing professional should ask a supplier is, “How much of
a discount can I receive if I buy from you?†Some of the more popular discounts are
__________________ discounts.
A. cash, trade, and quality
B. cash, seasonal, and trade
C. seasonal, trade, and quantity
D. cash, trade, and quantity
E. quarterly, cash, and quantity
There are numerous testimonials regarding the use of life cycle ________ for both
capital equipment and systems acquisition.
A. expensing
B. depreciating
C. production
D. consideration
E. costing
There are numerous factors that are included in rate determination for a particular
commodity. These factors include the following:
•Shipping weight per cubit foot.
•Liability for damage.
•Perishability.
•Liability for damage to other commodities being transported.
•Liability for spontaneous combustion or explosion.
•Susceptibility to theft.
•Value per pound in comparison with other articles.
•Ease or difficulty in loading and unloading.
•Excessive weight.
•Excessive length.
•Care or attention necessary in loading and transporting.
•Trade conditions.
•Value of service.
•Competition with other commodities transported.
•Quantity offered as a single consignment.
A. True
B. False
Customer expectations include 1) fabrication, 2) appearance, 3) maintainability, and 4)
reliability.
A. True
B. False
___________ is described as follows: Some activities are concurrent with other
activities. A listing of the immediate predecessors of each activity is useful for
constructing the CPM network diagram.
A. Identify the critical path (longest path through the network)
B. Sequence the activities
C. Specify each individual activity
D. Draw a network diagram
E. Update the CPM diagram as the project progresses
There are three types of leases:
•Sales and leaseback arrangements.
•Operating lease.
•Capital lease.
A. True
B. False
Global sourcing is the trend of the future. Supply management is becoming very
important to the survival of both American and offshore firms. In certain industries,
using foreign suppliers can reduce total costs. Global sourcing is by no way expanded
to completely replace domestic sources; however, it is a way to meet a competitor’s
challenge and achieve better value for goods all over the world.
A. True
B. False
The timing of these capital acquisition decisions is critical to the financial health of a
firm. However, once capital investment decisions are made, they are easily reversible.
A. True
B. False
Standard costs of production are the basis for operating budgets, product prices, and
control of production costs. As these areas develop, __________________ will become
part of the ____________ -information system. Standard costs to create the time and
place utilities will be calculable.
A. operations and traffic budgeting / technology
B. operations and distribution cost accounting / technology
C. purchasing and distribution cost accounting / accounting technology
D. purchasing and distribution cost accounting / technology
E. operations and warehouse budgeting / accounting
Many firms require certain indemnification clauses to be included with any third-party
agreement with suppliers. The indemnification clause protects the _________ from
liability caused by the action or lack of action by the third party on issues not under the
control of the _________.
A. carrier / manufacturer
B. supplier / supplier
C. shipper / supplier
D. carrier / shipper
E. shipper / buyer
___________ purchasing results in lower costs because of the availability of purchase
quantity discounts.
A. Centralized Decentralized
B. Decentralized
C. Network
D. Cooperative
When a supplier can manage ____________ for several hospitals, both the buyer and
supplier can take advantage of the economies of scale in warehousing and in
transportation inherent in such a situation.
A. stockless inventory systems
B. mutual inventory systems
C. mass inventory systems
D. cooperative systems
E. matrix inventory systems
According to Monden (1983), the success of Toyota’s kanban-controlled production
system is supported by:
A. smoothing of production, standardization of jobs, and reduction of setup times
B. improvement of activities and design of machine layout
C. automation of processes
D. All of the above.
E. “A†and “C†only.
Measures of customer service are usually expressed in terms of the _______________
of material. While important, ______________ is only one dimension of customer
service.
A. quality / quality
B. abundance / abundance
C. availability / availability
D. price / price
E. quality / value
The notion of interfirm power holds its roots in ______________ literature and has
been extensively developed by marketing channel researchers.
A. management science
B. organizational behavior
C. organizational science
D. social science
E. operations science
If demand from several locations can be pooled, the overall variance of demand is
__________ so that safety stock required to provide the same level of customer service
is _________.
A. increased / increased
B. reduced / lowered
C. maintained / improved
D. reduced / improved
E. increased / improved
Supplier ______________ are very useful tools to evaluate the quality capabilities of a
supplier.
A. certification programs
B. negotiations
C. evaluations
D. bargaining programs
E. review programs
Generally speaking, ___________ supplies are standard items and are specified by
manufacturer or industry codes.
A. maintenance
B. repair
C. replacement
D. OEM
E. operating
To ensure successful implementation (of the Stockless Inventory System), several
criteria must be met, including the existence of _____________ and excellent
communication and cooperation within the hospital departments, as well as between the
hospital and its supplier.
A. a purchasing department
B. a supply management system
C. performance standards
D. a strategic plan
E. a prime supplier contract
A leasing arrangement can actually ________ a firm’s borrowing capacity.
A. increase
B. worsen
C. lower
D. improve
E. negate
Once a final list is established, ___________ should be arranged. This meeting involves
representatives from all potential vendors and all relevant hospital departments in order
to discuss general perceived requirements of the equipment.
A. a separate meeting with each supplier
B. a vendor conference
C. a reverse auction
D. a vendor planning session
E. a pre-bid conference
Independent demand is related to the demand for other items. In other words, an
independent item must be forecasted independently.
A. True
B. False