The primary objective of a supply management program is to ensure systems are
adequate to keep departments supplied ___________.
A. with essentials
B. without delays
C. with low cost goods
D. with high quality supplies
E. without stockouts
Communication can be described as the _______ that holds together a sourcing
relationship.
A. substance
B. lubricant
C. glue
D. process
E. procedure
Company goals may be slightly different across organizations, but all __________
firms must eventually _____________.
A. for profit / maximize profitability
B. manufacturers / become effective
C. non-profit / provide a useful service
D. successful / provide good customer service
E. service / provide good customer service
The goal (of Statistical Process Control) is to ___________________.
A. eliminate errors
B. improve quality
C. improve effectiveness
D. reduce costs
E. prevent process errors before they occur
The ____________ is to provide a firm with component parts and raw materials.
____________ also must ensure that high-quality products are provided on time, at a
reasonable price.
A. manufacturing department / Manufacturing
B. operations division / Operations
C. function of purchasing / Purchasing
D. procurement department / Operations
E. buying function / Manufacturing
To maintain trust and cooperation between buying and selling firms, reverse auctions
should be used carefully.
A. True
B. False
The most important ____________ for a seller is to submit the most responsive Request
for Proposal (RFP) or Request for Quote (RFQ).
A. bargaining tactic
B. organizing activity
C. strategic step
D. negotiating step
E. planning activity
The ____________ between the buyer and the seller usually leads to many offers and
counteroffers.
A. discussions
B. negotiations process s
C. relationships
D. dialogue
E. contract
The __________ schedule is a counterpart to the master surgery schedule and
short-term (three- to six-week) forecast for other expected patient care. Material
requirements can be derived from the surgery schedule and forecast, and
“exploded†backwards to determine when to begin the production of certain
supplies assembled or (produced) within the hospital.
A. critical supply inventory
B. materials production
C. supply production
D. master production
E. surgery supply production
. The cost of acquiring, storing, and moving materials is an increasingly large portion of
the ____________________.
A. gross profit
B. cost of goods sold
C. net profit
D. direct expenses
E. cost of doing business
Total supply chain costs can vary from 1percent, for heavy equipment, to approximately
35 percent, for perishable food products, of the recommended _________ for the
specific item or product.
A. gross margin
B. discount price
C. cost
D. profit margin
E. selling price
Six-sigma suppliers focus on all of the items listed below with one exception. Which
one is the exception?
A. Defects per million as a standard metric
B. Provision of extensive employee training
C. Improvement of profit margins
D. The reduction of non-value-added activities
Once the buyer has a complete understanding of what he/she is buying, a thorough
price/cost analysis should be performed using the seller’s cost data. The buyer
cannot be an effective negotiator without the price analysis. The only reasonable way to
reduce the price proposal is convincing the seller through data analysis. However, at
times it is reasonable to ask for price reductions without a price/cost analysis.
A. True
B. False
If suppliers fail to provide materials of _____________ on a regular basis, production
slow-downs and stoppages will occur regularly.
A. adequate quantity
B. acceptable quantity
C. adequate quality
D. high quality
E. acceptable quality
Lower levels of __________ contribute significantly to reduced working capital
requirements for the firm.
A. waste
B. supplies
C. materials
D. safety stock
E. inventory
The initial (transportation) decision requires the ________ firm to select the appropriate
shipment mode.
A. buying
B. selling
C. shipping
D. freight
E. trucking
The classification of the various capital equipment requests must be based on certain
common characteristics. Although equipment classification varies from company to
company, capital projects are frequently grouped according to the following categories:
•Replacements
•Expansion (new products)
•Expansion (existing products)
•Other (heating system for plant)
•Other (new construction)
•Other (renovation)
A. True
B. False
Another critical issue for JIT manufacturers is the __________ in product demand. JIT
systems seem to work best when its smooth production and low inventory requirements
are aimed at meeting a relatively _________ product demand.
A. regularity / unstable
B. variability / stable
C. variability / variable
D. predictability / predictable
E. stability / stable
Effective development and implementation of the just-in-time system requires
integration of important functional areas such as ______________________.
A. purchasing
B. manufacturing
C. quality
D. production and transportation
E. all of the above
_____________ is when a prime contractor substitutes an existing supplier with one
located in the buying country.
A. Offsets
B. Sub-contractorproduction
C. Indirect offsets
D. Coproduction
E. Licensed production
Water carriers are an excellent transportation shipping mode for low-valued bulk
commodities in large quantities. Speed is not a critical criterion for those raw materials.
A. True
B. False
A performance review is a set of expectations and measurements for controlling
long-term relationships with existing strategic suppliers.
A. True
B. False
Purchasing managers need to devise ______________ such that they are consistent with
each other and with the firm’s competitive strategy.
A. negotiations
B. purchasing actions
C. pricing policies
D. marketing strategies
E. business programs
When a firm has answered the make-or-buy question with a decision to buy, the
question then becomes __________________ this responsibility.
A. to whom to delegate
B. to whom to assign
C. who can handle
D. who is best suited for
E. who is qualified for
The substitutability issue is one of great concern to the supply manager, and often a
difficult one to reconcile with _____________. A current listing of one- and two-way
substitutability of products must be maintained and updated.
A. suppliers
B. administrators
C. insurance plans
D. governmental agencies
E. practitioners
The gross present value recognizes that a dollar to day is worth more than a dollar
tomorrow, simply because the dollar today can be invested to start earning interest
immediately.
A. True
B. False
For the purpose of the purchasing professional, two methods will be considered:
(1)traditional loans and (2)leases. The leasing method has been become very popular in
the last 20 years and can be used to finance nearly any kind of fixed asset. The
lease-versus-purchase decision usually requires many considerations.
A. True
B. False
The ______ system provides information to better determine the quantity and timing of
___________ and ____________ than is possible with the non-time-phased order-point
system.
A. PDQ / deliveries / purchase orders
B. MRA / deliveries / component parts
C. MPR / reorders / purchase orders
D. MPR / component parts / purchase orders
E. APR / component parts / purchase orders
While a contract is required to legally protect one’s interests, an extensive strategic
assessment and a true commitment to a cooperative relationship with the service
provider are both necessary to realize expected outsourcing benefits. These insights
offer valuable guidance to __________________ in terms of where and how
______________ should be applied.
A. business partners / outsourcing techniques
B. outsourcing practitioners / outsourcing benefits
C. business practitioners / sourcing techniques
D. procurement departments / outsourcing benefits
E. outsourcing practitioners / sourcing resources
If you analyze what sells the most and what cost the most, a predictable pattern will
emerge with most distribution inventories.
•Certain items are demanded by a great many customers.
•Most items are only demanded by certain customers.
•Some items are demanded by few customers.
•As a result of this general pattern, a small percentage of the total item usage
accounts for a large proportion of total usage value. It is hypothesized that ____
percent of the total inventory cost is vested in approximately ____ percent of the
items.
A. 60 /40
B. 20 / 80
C. 80 / 20
D. 50 / 50
E. 70 / 30
Introducing new technologies into organizations will almost always result in some
combination of social, technical, psychological, and structural changes. When managers
or employers resist the logical arguments presented in support of EDI, they may not be
resisting the technical aspects of the proposed change as much as the perceived
_______________________ ramifications.
A. social or cultural
B. personal or psychological
C. cultural or psychological
D. social or psychological
E. technological or structural
_________ are commercial compensation practices required as a condition of purchase
of goods and services.
A. Offsets
B. Indirect offsets
C. Coproduction
D. Sub-contractorproduction
E. Licensed production
The competition in the trucking industry is fierce, so in order to be successful, a carrier
must provide the shipper with ___________________.
A. low costs and flexibility
B. reliability and high service
C. versatility and flexibility
D. high service and low costs
E. reliability and low costs