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BUS 230 Week 11 Quiz

BUS 230 Week 11 Quiz – Strayer

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Quiz Chapter 16 and 17

Other Supply Responsibilities

113. Investment recovery is often assigned to:

a. supply managers because they have knowledge supply markets and price trends.
b. salespeople because they have contact with buyers who may use the material.
c. marketing managers because they have information on internal users.
d. engineers who can suggest possible uses of the material within the organization.
e. financial analysts because they set the target return on all investments.

114. Efforts to deal with hazardous waste include a focus on:

a. highly visible sources of pollution, e.g. smoke stacks.
b. less visible uncontrolled sites, e.g. buried waste.
c. recycling.
d. substitution of non-hazardous materials for hazardous materials.
e. all of the above.
115. The potential benefits of having accounts payable report to the same executive as supply include:

a. familiarity with the supplier
b. familiarity with the order.
c. opportunities to reduce transaction costs and headcount.
d. the ability for supply to ensure that payments for suppliers are made on time.
e. all of the above.

116. Reducing the obsolescence and waste of maintenance, repair, and operating (MRO) supplies through better materials and inventory management will:

a. reduce the costs of disposing of MRO items that are obsolete or waste.
b. reduce carrying cost by lowering inventory levels, especially of obsolete items.
c. improve environmental performance by reducing waste that goes into landfills or incinerators.
d. simultaneously reduce costs and improve environmental performance.
e. have little impact because MRO is a small percentage of annual spend and the items usually have low environmental low-impact.

117. Warehousing and inventory storage:

a. can either be an internal function or outsourced to a third-party logistics firm.
b. typically has little communication with supply management.
c. may have direct responsibility for organizational purchasing decisions.
d. outsourcing decisions typically are made by the finance department.
e. is seldom outsourced.

118. One of the reasons why companies are paying more attention to the effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste materials is that:

a. consumers overwhelmingly demand environmental responsibility.
b. it is easy to administer and highly profitable.
c. most organizations generate little scrap, surplus, obsolete and waste materials.
d. disposal costs are rising and environmental legislation is strengthening.
e. disposal is a fairly simple problem that is easily resolved.

119. The role and importance of investment recovery in an organization is driven in large part by the:

a. CEO’s perspective on environmental issues.
b. Chief Purchasing Officer’s clout or leverage with other executives.
c. projected dollar value of the potential revenue recovery or cost reduction.
d. salespeople who encourage the inclusion of buy-back programs of key materials.
e. internal level of knowledge about disposal channels and suppliers.

120. Coordinating inbound and outbound transportation:

a. has little application in an effective and efficient supply organization.
b. is done by cross-functional teams in most organizations.
c. helps to reduce costs and improve utilization of related assets and resources.
d. provides the basic elements of a global supply network.
e. is used extensively in Europe, but has not migrated to the U.S.

121. Production planning:

a. focuses on long-term schedules to control inventory and production.
b. requires coordinating the delivery and storage of key raw materials.
c. cannot involve supply because of fears of undue influence from suppliers.
d. relies heavily on forecasts from purchasing and supply management.
e. is a discrete activity with little coordination with other functions.

122. Supply can contribute to the organization’s environmental management program by:

a. developing sourcing and usage alternatives for hazardous materials.
b. focusing on substitution of non-hazardous materials for hazardous materials.
c. encouraging and participating in designing products that do not use or generate hazardous waste.
d. a and b.
e. a, b and c.

True and False

1. Production planning relies heavily on forecasts from operations to anticipate demand for products and services..

2. To ensure maximum return for its investment, the process and procedures for selling scrap and surplus must cover a broad range of activities including segregation and storage, weighing and measuring, delivery, negotiation, supplier selection, and payment.

3. If material has been declared surplus, the only option is to sell it.

4. Obsolete is in the eyes of the beholder. Something that has been declared obsolete in one organization may be perfectly acceptable and useable in another.

5. It makes no sense to assign responsibility for disposal to the supply management function because the personnel usually have no selling experience.

6. The total cost of hazardous waste for a company does not include the costs of new plant and equipment to reduce waste and deal with contaminated plants.

7. Escalator clauses in contracts for scrap disposal are necessary because the prices of primary metals fluctuate.
8. An organization’s Enterprise Resource Planning (ERP) system may be used to develop a national or global database for company personnel at different locations to post and purchase spare parts, obsolete materials, and surplus.

9. Waste is created when a change in the production process occurs, or when a better material is substituted for the material originally used.

10. As more people come to believe that it makes economic sense to practice environmentally sound operations, business and government may be able to work together for common goals.

CHAPTER 17

SUPPLY FUNCTION EVALUATION AND TRENDS

123. Research on the supply management process focuses on:

a. developing a strategy to reduce cost or ensure supply.
b. improving buyer-seller relationships.
c. deciding whether to single or multiple source.
d. conducting cost analysis to identify unnecessary costs.
e. increasing efficiency by automating where possible.

124. Purchasing performance benchmarking attempts to:

a. analyze a firm’s own internal trends.
b. provide industrywide standards for overall firm performance.
c. determine what results have been achieved by purchasing and supply activities.
d. determine how an organization achieves results in purchasing and supply.
e. provide baseline metrics to compare companies’ supply performance.

125. The budget which begins with an estimate of expected operations, based on sales forecasts and plans, is called the:

a. operating budget.
b. capital budget.
c. cash flow budget.
d. materials purchase budget.
e. organizational budget.

126. When cross-functional teams are used to conduct research, it is best if:

a. the team has strong leadership.
b. the team has total autonomy to decide objectives and set expectations.
c. team members are randomly selected from departments.
d. performance evaluation and reward systems foster individual contributions.
e. each team member develops time management skills to handle the assignment.

127. In terms of measuring and validating supply savings:

1. information systems easily capture savings.
2. static markets, technologies, and volumes facilitate the process.
3. in many cases there is an inability to convert savings into profit.
4. management usually recognizes cumulative savings.
5. there is a universal definition of supply savings.

128. Supply can play a leadership role in corporate social responsibility (CSR) by:

1. instituting third party workplace audits of suppliers in developing countries.
2. knowing the providence of products in the supply chain.
3. considering the organization’s carbon footprint in supply decisions.
4. designing closed loop supply chains.
5. all of the above.

129. The assessment of a supplier’s financial capacity:

1. enables the development of risk minimization strategies.
2. predicts the probability of the supplier encountering financial problems.
3. is done primarily to ensure the supplier has the cash to pay its bills.
4. usually is unnecessary if the supplier has been in business for more than 5 years.
5. is required before a contract can be ratified.

130. A comprehensive commodity study should result in a(n):

a. thorough analysis of sources used over time.
b. strategy to lower cost and assure supply.
c. review of past predictions and variances from actual prices paid.
d. assessment of the performance of the commodity manager.
e. trend analysis of volume requirements over time.

131. Trends in supply organization and leadership include:

a. more chief purchasing officers with extensive supply experience.
b. less emphasis on teams.
c. global projects requiring cross-cultural skills.
d. merging of strategic and tactical roles in supply.
e. emphasis on “hard skills” such as finance.

132. An efficiency-oriented performance metric:

a. evaluates the quality of supplier relationships.
b. measures end customer satisfaction.
c. measures direct contributions to profit.
d. calculates the average dollar cost of a purchase order.
e. measures number of defects caused by poor incoming quality.

True and False

1. The perceptions that non-supply managers have of supply are shaped by interactions with and observations of supply, tangible experiences with supply on a day-to-day basis, and the extent to which supply is seen as contributing to the firm’s mission.

2. Value engineering is done on purchased items used in the ongoing production process, while value analysis is done in the design stage where items are being specified.

3.Triple bottom line reporting refers to an organization’s social, environmental, and financial performance.

4. Effectiveness metrics which emphasize price may lead to behavior that drives up total cost of ownership.

5. The supply planning process is initiated by the supply manager’s assessment of the supply base.

6. Industry benchmarking allows an individual company to compare itself to its major competitor.

7. Financial efficiency is indicated by the asset and inventory turnover ratios.

8. Supplier performance management systems should be designed to capture and communicate the failures of suppliers so penalties can be assessed.

9. Supply management’s contribution may be measured along three dimensions: revenue enhancement, asset management, and cost management.

10. Internal validation of supply’s financial contribution increases joint ownership of goals and outcomes.

BUS 230 Week 11 Quiz – Strayer University New

BUS/230 Week 11 Quiz – Strayer

Click on the Link Below to Purchase A+ Graded Course Material

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Quiz Chapter 16 and 17

Other Supply Responsibilities

113. Investment recovery is often assigned to:

a. supply managers because they have knowledge supply markets and price trends.
b. salespeople because they have contact with buyers who may use the material.
c. marketing managers because they have information on internal users.
d. engineers who can suggest possible uses of the material within the organization.
e. financial analysts because they set the target return on all investments.

114. Efforts to deal with hazardous waste include a focus on:

a. highly visible sources of pollution, e.g. smoke stacks.
b. less visible uncontrolled sites, e.g. buried waste.
c. recycling.
d. substitution of non-hazardous materials for hazardous materials.
e. all of the above.
115. The potential benefits of having accounts payable report to the same executive as supply include:

a. familiarity with the supplier
b. familiarity with the order.
c. opportunities to reduce transaction costs and headcount.
d. the ability for supply to ensure that payments for suppliers are made on time.
e. all of the above.

116. Reducing the obsolescence and waste of maintenance, repair, and operating (MRO) supplies through better materials and inventory management will:

a. reduce the costs of disposing of MRO items that are obsolete or waste.
b. reduce carrying cost by lowering inventory levels, especially of obsolete items.
c. improve environmental performance by reducing waste that goes into landfills or incinerators.
d. simultaneously reduce costs and improve environmental performance.
e. have little impact because MRO is a small percentage of annual spend and the items usually have low environmental low-impact.

117. Warehousing and inventory storage:

a. can either be an internal function or outsourced to a third-party logistics firm.
b. typically has little communication with supply management.
c. may have direct responsibility for organizational purchasing decisions.
d. outsourcing decisions typically are made by the finance department.
e. is seldom outsourced.

118. One of the reasons why companies are paying more attention to the effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste materials is that:

a. consumers overwhelmingly demand environmental responsibility.
b. it is easy to administer and highly profitable.
c. most organizations generate little scrap, surplus, obsolete and waste materials.
d. disposal costs are rising and environmental legislation is strengthening.
e. disposal is a fairly simple problem that is easily resolved.

119. The role and importance of investment recovery in an organization is driven in large part by the:

a. CEO’s perspective on environmental issues.
b. Chief Purchasing Officer’s clout or leverage with other executives.
c. projected dollar value of the potential revenue recovery or cost reduction.
d. salespeople who encourage the inclusion of buy-back programs of key materials.
e. internal level of knowledge about disposal channels and suppliers.

120. Coordinating inbound and outbound transportation:

a. has little application in an effective and efficient supply organization.
b. is done by cross-functional teams in most organizations.
c. helps to reduce costs and improve utilization of related assets and resources.
d. provides the basic elements of a global supply network.
e. is used extensively in Europe, but has not migrated to the U.S.

121. Production planning:

a. focuses on long-term schedules to control inventory and production.
b. requires coordinating the delivery and storage of key raw materials.
c. cannot involve supply because of fears of undue influence from suppliers.
d. relies heavily on forecasts from purchasing and supply management.
e. is a discrete activity with little coordination with other functions.

122. Supply can contribute to the organization’s environmental management program by:

a. developing sourcing and usage alternatives for hazardous materials.
b. focusing on substitution of non-hazardous materials for hazardous materials.
c. encouraging and participating in designing products that do not use or generate hazardous waste.
d. a and b.
e. a, b and c.

True and False

1. Production planning relies heavily on forecasts from operations to anticipate demand for products and services..

2. To ensure maximum return for its investment, the process and procedures for selling scrap and surplus must cover a broad range of activities including segregation and storage, weighing and measuring, delivery, negotiation, supplier selection, and payment.

3. If material has been declared surplus, the only option is to sell it.

4. Obsolete is in the eyes of the beholder. Something that has been declared obsolete in one organization may be perfectly acceptable and useable in another.

5. It makes no sense to assign responsibility for disposal to the supply management function because the personnel usually have no selling experience.

6. The total cost of hazardous waste for a company does not include the costs of new plant and equipment to reduce waste and deal with contaminated plants.

7. Escalator clauses in contracts for scrap disposal are necessary because the prices of primary metals fluctuate.
8. An organization’s Enterprise Resource Planning (ERP) system may be used to develop a national or global database for company personnel at different locations to post and purchase spare parts, obsolete materials, and surplus.

9. Waste is created when a change in the production process occurs, or when a better material is substituted for the material originally used.

10. As more people come to believe that it makes economic sense to practice environmentally sound operations, business and government may be able to work together for common goals.

CHAPTER 17

SUPPLY FUNCTION EVALUATION AND TRENDS

123. Research on the supply management process focuses on:

a. developing a strategy to reduce cost or ensure supply.
b. improving buyer-seller relationships.
c. deciding whether to single or multiple source.
d. conducting cost analysis to identify unnecessary costs.
e. increasing efficiency by automating where possible.

124. Purchasing performance benchmarking attempts to:

a. analyze a firm’s own internal trends.
b. provide industrywide standards for overall firm performance.
c. determine what results have been achieved by purchasing and supply activities.
d. determine how an organization achieves results in purchasing and supply.
e. provide baseline metrics to compare companies’ supply performance.

125. The budget which begins with an estimate of expected operations, based on sales forecasts and plans, is called the:

a. operating budget.
b. capital budget.
c. cash flow budget.
d. materials purchase budget.
e. organizational budget.

126. When cross-functional teams are used to conduct research, it is best if:

a. the team has strong leadership.
b. the team has total autonomy to decide objectives and set expectations.
c. team members are randomly selected from departments.
d. performance evaluation and reward systems foster individual contributions.
e. each team member develops time management skills to handle the assignment.

127. In terms of measuring and validating supply savings:

1. information systems easily capture savings.
2. static markets, technologies, and volumes facilitate the process.
3. in many cases there is an inability to convert savings into profit.
4. management usually recognizes cumulative savings.
5. there is a universal definition of supply savings.

128. Supply can play a leadership role in corporate social responsibility (CSR) by:

1. instituting third party workplace audits of suppliers in developing countries.
2. knowing the providence of products in the supply chain.
3. considering the organization’s carbon footprint in supply decisions.
4. designing closed loop supply chains.
5. all of the above.

129. The assessment of a supplier’s financial capacity:

1. enables the development of risk minimization strategies.
2. predicts the probability of the supplier encountering financial problems.
3. is done primarily to ensure the supplier has the cash to pay its bills.
4. usually is unnecessary if the supplier has been in business for more than 5 years.
5. is required before a contract can be ratified.

130. A comprehensive commodity study should result in a(n):

a. thorough analysis of sources used over time.
b. strategy to lower cost and assure supply.
c. review of past predictions and variances from actual prices paid.
d. assessment of the performance of the commodity manager.
e. trend analysis of volume requirements over time.

131. Trends in supply organization and leadership include:

a. more chief purchasing officers with extensive supply experience.
b. less emphasis on teams.
c. global projects requiring cross-cultural skills.
d. merging of strategic and tactical roles in supply.
e. emphasis on “hard skills” such as finance.

132. An efficiency-oriented performance metric:

a. evaluates the quality of supplier relationships.
b. measures end customer satisfaction.
c. measures direct contributions to profit.
d. calculates the average dollar cost of a purchase order.
e. measures number of defects caused by poor incoming quality.

True and False

1. The perceptions that non-supply managers have of supply are shaped by interactions with and observations of supply, tangible experiences with supply on a day-to-day basis, and the extent to which supply is seen as contributing to the firm’s mission.

2. Value engineering is done on purchased items used in the ongoing production process, while value analysis is done in the design stage where items are being specified.

3.Triple bottom line reporting refers to an organization’s social, environmental, and financial performance.

4. Effectiveness metrics which emphasize price may lead to behavior that drives up total cost of ownership.

5. The supply planning process is initiated by the supply manager’s assessment of the supply base.

6. Industry benchmarking allows an individual company to compare itself to its major competitor.

7. Financial efficiency is indicated by the asset and inventory turnover ratios.

8. Supplier performance management systems should be designed to capture and communicate the failures of suppliers so penalties can be assessed.

9. Supply management’s contribution may be measured along three dimensions: revenue enhancement, asset management, and cost management.

10. Internal validation of supply’s financial contribution increases joint ownership of goals and outcomes.

BUS 230 Week 9 Quiz – Strayer University New

BUS 230 Week 9 Quiz – Strayer

Click on the Link Below to Purchase A+ Graded Course Material

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Chapter 12 and 13

Supplier Selection

73. Small suppliers:

a. are most suited for large dollar value “A” requirements.
b. usually represent very low risk to the purchaser.
c. tend to have a strong financial base.
d. often provide the greatest responsiveness and flexibility.
e. tend to have an extensive management structure.

74. Reverse marketing is:

a. encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains.
b. when the buying organization has decided to stop making something inhouse and identifies a supplier from its existing supply base.
c. is an aggressive, marketing-initiated, approach to finding and developing world class suppliers.
d. requires that the marketing department in the buyer’s organization fully understand the needs of supply.
a. is most appropriate when the product is fairly standard and available from multiple local suppliers.

75. Decision trees:
a. may be useful in making effective supplier selection decisions the first-time a buying decision is made, but not on repetitive purchases.
b. may be useful in making effective supplier selection decisions when making repetitive purchases, but not special, one-time purchases.
c. may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option.
d. are of limited value because options can only be evaluated qualitatively, not quantitatively.
e. cannot reflect past decisions so they are useless as a decision tool when making repetitive purchases.

76. Portfolio or quadrant analysis:

a. may be used to develop longer-term strategies for moving categories of spend into a more desirable location on the spend map.
b. may be used to justify, clarify or revise existing commodity strategies.
c. is based on the Pareto curve.
d. a and b.
e. a, b and c.

77. To avoid risk, a buyer can:

a. hedge in a commodities market.
b. require bid or performance bonds.
c. decide not to do business in certain countries.
d. a and b.
e. a, b, and c.

78. Which of the following statements supports single sourcing:

a. there is a need to reduce supplier dependence on the buying organization.
b. there is a high probability of a devastating natural disaster.
c. there is a patent involved.
d. there is volatility in the supply market.
e. concerns exist about supplier capacity for future volume.

79. In the portfolio matrix, characteristics of goods and services in the leverage quadrant are:

a. competitive supply market, substitution is possible, price per unit is important.
b. competitive supply market, substitution is possible, and total cost is a primary focus.
c. few suppliers with adequate capability so substitution and switching are difficult.
d. item substitution is possible, switching is difficult, and many suppliers are available.
e. item substitution and supplier switching are possible, but few suppliers are capable.

80. Assessment of a potential supplier’s financial situation:

a. is usually unnecessary because it is highly unlikely that a supplier will go out of business, and, even if they do, it is relatively easy to replace a supplier.
b. may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations.
c. is best left to the finance department which will alert supply to any issues that might adversely affect a pending deal.
d. is always necessary and follows a strict protocol no matter what type of purchase or dollar value.
e. seldom relies on financial information provided by the supplier..

81. Distributors, wholesalers, and retailers:

a. never add enough value to a buyer to make it worth doing business with them.
b. may be able to deliver at a lower cost than the manufacturer.
c. may provide valuable services such as prompt delivery and filling emergency orders, but they cannot offer a better price than the manufacturer.
d. have an indefensible value proposition in the typical modern supply chain.
e. typically carry a very limited supply in an effort to keep inventory costs low.

82. Supply management’s role in environmental considerations is:

a. expanding because purchasing has primary responsibility for specification writing.
b. limited because environmental issues have little impact on the acquisition cycle.
c. expanding because the goal of zero environmental impact affects the buying cycle.
d. limited by the product design developed by design engineers.
e. limited to compliance with government laws and regulations.

True and False

1. The preferred hierarchy of supply chain strategies is (1) source reduction—design or use less, (2) reuse—multiple use of same item such as a package or container, (3) recycle—reprocess into raw material, (4) incinerate—at least extract energy, but create CO2 pollution at a minimum, (5) landfill—require space and transportation to store with potential impact on land and water.

2. The question of how much of a premium should be paid to conform with political directives such as Buy Local or Buy American is the subject of much ongoing debate.

3. Although online searching is commonplace in many areas of business, it has not become a common tool for gathering information on potential suppliers

4. Supplier development initiatives may be focused on (1) persuading an existing supplier to expand into new areas that meet the needs of the buying organization, and (2) locating a new, untried/unknown company and identifying potential areas of business.

5. The buyer’s assessment of the risk associated with a supplier is influenced by whether it is a non-critical, leverage, bottleneck, or strategic purchase.

6. Site visits to suppliers are of little use to supply managers because of their subjective nature.

7. Buyers should always expect to receive samples free of charge from suppliers.

8. Loss exposure can be reduced by matching decisions about packaging, transportation, and security levels with the risk of loss.

9. Social problems should not be addressed through supply policy and practice.

10. In the context of supplier selection decisions, the term local is typically defined as suppliers within a 100 mile radius of the buying organization.

CHAPTER 13

Supplier Evaluation and Supplier Relations

83. A weighted point evaluation system:

a. is seldom used because the costs usually outweigh the benefits.
b. includes evaluation criteria, an importance factor for each, and a rating system.
c. includes efficiency and effectiveness metrics weighted by users perceptions.
d. is the most commonly used process because of ease of design and use.
e. allows each rater to weight the criteria, but all raters user the same rating scales.

84. To select a potential supplier-partner, the buyer should consider:

a. both hard and soft factors with an eye toward long-term outcomes.
b. both hard and soft factors with an eye toward short-term outcomes.
c. soft factors such as congruence of management values and compatibility.
d. hard factors such as quality, quantity, cost, and technology.
e. the willingness of the supplier to quickly change processes for results.

85. A goal of supply chain management is to:

a. gain competitive advantage by acquiring confidential information from chain members.
b. drive down prices through competitive online bidding.
c. push inventory as far down the supply chain as possible.
d. reduce uncertainty and risks between and among members of the supply chain.
e. increase competition by increasing the number of suppliers in the supply chain.

86. Which of the following is a result of forming a buyer-supplier partnership:

a. the amount of time committed to the buyer-supplier relationship is greatly reduced.
b. buyer-supplier relationships are greatly improved at the expense of internal relationships.
c. the buying organization can enjoy the benefits of horizontal integration without the disadvantages.
d. the design process and the introduction of new designs is faster due to earlier supplier and supply involvement.
e. significant quality improvements occur and total cost typically increases.

87. One of the assumptions on which the purchasing-supplier satisfaction model is based is that:

a. the satisfaction level cannot be assessed well enough to draw definitive conclusions.
b. the purchaser and supplier always have the same perceptions of the same relationship.
c. attempts to move to a different position fall only in the win-lose and win-win categories.
d. there are few tools and techniques available to move positions or improve stability.
e. an unsatisfied party may use various tools to improve the relationship.

88. Reverse marketing is:

e. discouraged by the rapid rate of technological change and growth in international trade.
f. when the buying organization has decided to stop making something in house and identifies a supplier from its existing supply base.
g. is an aggressive, purchaser-initiated, approach to finding and developing world class suppliers.
h. requires that the marketer fully understand the needs of the buying organization now and in the future.
i. is most appropriate when the product is fairly standard and available from multiple local suppliers.

89. To enhance the chance for successful strategic alliances, the supply manager must:

a. ensure that price formulation and price escalator clauses are included in the contract terms and conditions.
b. clearly establish what is required from the supplier and the penalties for failure to perform.
c. reinforce the notion that the supply manager can easily switch to another alliance if the supplier fails to perform.
d. analyze the supplier’s capability for e-procurement and ensure that the supplier can effectively and efficiently manage online catalogs.
e. identify suppliers whose management views on quality and productivity match those of the buying organization and have both parties establish expectations.

90. Trends in supply management include:

a. switching suppliers frequently through online auctions to get price discounts.
b. limiting the number of suppliers and focusing on results from key suppliers.
c. increasing the number of suppliers and developing closer relationships.
d. negotiating shorter term contracts with fewer suppliers to increase leverage.
e. greater concentration of the supplier selection decision in procurement.

91. Early supply and supplier involvement (ESI):

a. pulls both the buyer and supplier into the need recognition and description stages of the acquisition process.
b. pulls the buyer into relationship management stage and pulls the supplier into need recognition and description.
c. pulls the buyer into the need recognition and description stages and pulls the supplier into the measurement stage.
d. pulls the buyer into the measurement stage and pulls the supplier into the need recognition and description stages.
e. pulls both the buyer and supplier into the process of measuring results and developing action plans for performance improvement.

92. Supply chain management effectiveness is driven primarily by the organization’s ability to manage the:

a. internal link between supply management and its internal customers.
b. internal link between supply management and senior management.
c. internal and external links of customers, the buying organization and suppliers.
d. external link between a buying organization and its key suppliers.
e. external link between a buying organization and its key customers.

True and False

11. Taking negative measures to shift the satisfaction level in the buyer-seller relationship will have little impact on short term objectives, but will positively affect the relationship in the long-term.

12. The perception of a buyer-seller relationship is based on both the results and the process used to attain them.

13. An unwillingness to single source and enter into a buyer-supplier partnership is indefensible in a progressive purchasing and supply management organization.

14. Buyer-supplier relationships fall somewhere on a continuum from traditional, adversarial relationships to fully integrated, seamless relationships.

15. Exceptional suppliers anticipate the operational and strategic needs of the purchaser, and are capable of meeting and exceeding them.

16. Supplier goodwill can be measured regularly through surveys conducted by third party research organizations.

17. Strategic supply management focuses on only those suppliers of high dollar or high value goods and services.

18. Adversarial negotiations and decisions based on total cost of ownership are hallmarks of a successful buyer-supplier partnership.

19. Early supplier involvement only extends to an organization’s first tier suppliers because it is the responsibility of these suppliers to manage subsequent tiers of suppliers.
20. Supply management is critical to effectively managing supply chains, but demand management is not.

BUS 230 Week 8 Quiz – Strayer University New

BUS/230 Week 8 Quiz – Strayer

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CHAPTER 10

Price

53. Identical prices received from various sources should:

1. be expected when the specification is highly customized.
2. always make the buyer suspicious of collusion.
3. only draw attention if the buyer is dissatisfied with the price quoted.
4. draw attention if the specification is complex or detailed.
5. result in the buyer taking legal action against all bidders.

54. Most direct costs are:

1. variable costs.
2. overhead costs.
3. general and administrative costs.
4. semivariable costs.
5. fixed costs.

55. If the buyer wants to motivate the seller to manage total costs, the best type of contract is:

a. firm-fixed-price (FFP).
b. cost-plus-incentive-fee (CPIF)
c. firm-fixed-price plus incentive fee (FFPIF).
d. cost-plus-fixed-fee (CPFF).
e. cost-no-fee (CNF).

56. The market approach to pricing:

1. means prices are set to cover direct costs, contribute to indirect, and attain a profit.
2. is the only defensible pricing mechanism for ethical companies to use.
3. implies that prices are set based on what the market will bear.
4. means that prices are adjusted regularly to ensure that the selling organization recoups all its market costs.
5. implies that market analysis is the only technique that should be employed to negotiate prices.

57. The prime function of an organized commodity exchange is to furnish an established marketplace where:

a. the forces of supply and demand operate freely.
b. commodity prices can be controlled.
c. sellers of the same commodity can come together to set prices.
d. products that are difficult to grade can be traded.
e. there are only a limited number of buyers and sellers.

58. Forward buying:

1. offsets transactions to protect against price and exchange risks
2. involves no risk for the buying organization.
3. involves purchasing for known or estimated near-term requirements.
4. is the same as speculation.
5. seeks to take advantage of price movements.

59. Items for which prices are comparatively low, and the cost of price reduction efforts may exceed any price savings realized, are called:

1. sensitive commodities.
2. raw materials.
3. special items.
4. standard production items.
5. MRO items.

60. A fair price:

a. is based on market conditions, and cost structure has no bearing on the determination of a fair price.
b. is the lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit.
c. is based on the cost to produce an item or service without consideration for the supplier’s profit margin.
d. is an amount arrived at through negotiations where the seller’s price is a starting point..
e. is when all sellers of equal goods or services receive the same per unit price.

61. A cash discount allows:

a. the seller to secure prompt payment, but has no benefits for the buyer.
b. the buyer to pay a lower price per unit, but has no benefits for the seller.
c. the seller to secure prompt payment, and the buyer to pay a lower price per unit.
d. the seller to demand payment in cash on demand (C.O.D.) upon receipt of goods.
1. the buyer to always calculate the discount based on the delivery date.

62. In the event the bidder does not make proper payment to its suppliers, the bond that protects the buyer against liens that might be granted to these suppliers, is called a:

a. performance bond.
b. surety bond.
c. bid bond
d. payment bond.
e. lien bond.

True and False

1. A cash discount of 2/10, N/30 (2 percent cash discount if payment is made in 10 days, with the gross amount due in 30 days) is the equivalent of approximately a 36 percent interest rate.

2. Governments play a role in establishing prices by establishing production and import quotas and by regulating the ways that buyers and sellers are allowed to behave in agreeing on prices.

3. To be fair, the basis and terms of cancellation should be agreed on in advance and made part of the terms and conditions of the purchase order.

4. Competitive bidding, in general, is the least efficient means of obtaining a fair price for items bought.

5. Online reverse auctions are useful means of price determination for special items.

6. For goods bought on a non-recurring basis, the contract may provide for a reduction in price should the buyer ever again purchase the item.

7. Canceling a contract for a technicality when market prices are falling is considered a perfectly acceptable and ethical practice.
8. An escalator clause provides for an increase, as well as a decrease, in price if costs change.

9. One justification for a quantity discount is that the buyer should not pay more than the actual cost of packing, crating, and transportation.

10. The Robinson-Patman and Sherman Antitrust Acts are primarily designed to prevent the stronger party from imposing too onerous conditions on the weaker one and preventing collusion so that competition will be maintained. .

CHAPTER 11

Cost Management

63. Target pricing:

a. starts with the supplier’s price, and works to determine the selling price of the buying organization’s end product or service.
b. starts with the selling price of an organization’s end product minus the operating profit to establish the target cost.
c. starts with the selling price of an organization’s end product minus actual manufacturing, overhead, and materials costs to determine operating profit.
d. starts with the supplier’s price, and works to determine the supplier’s true cost structure.
e. starts with the buyer’s lowest reasonable price target, and works to a negotiated price agreed on by the buyer and the supplier.

64. Activity based costing attempts to:

a. correct the distortions built into product costing by the way that direct costs are allocated.
b. correct the distortions built into product costing by the way that the learning curve is applied to direct labor costs.
c. turn indirect costs into direct costs by tracking the cost drivers behind indirect costs.
d. turn direct costs into indirect costs by tracking the cost drivers behind direct costs.
e. introduce a new way to allocate direct costs that more accurately captures labor and material usage.

65. An externally focused process of analyzing costs in terms of the overall value chain is called:

a. strategic cost management.
b. supply chain management.
c. total cost management.
d. profit leverage effect.
e. activity based costing.
66. Target pricing may result in companywide cost reductions in:

i. design to cost.
ii. manufacture to cost.
iii. purchase to cost.
iv. a and b.
v. a, b, and c.

67. Sources of sustainable competitive advantage include:

a. product differentiation (where customers have low price sensitivity),
b. low cost (where customers have high price sensitivity),
c. a combination of product differentiation and cost-leadership.
d. a, b and c
i. none of the above

68. When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

a. decide if negotiation makes sense.
b. establish negotiation points.
c. avoid setting unrealistic expectations.
d. b and c.
e. a, b, and c.

69. In portfolio analysis, the goal when purchasing strategic goods or services is to:

a. assure quality at expected levels.
b. assure continuous supply at lowest cost of ownership.
c. minimize acquisition time and cost.
d. minimize acquisition time and cost and price per unit.
e. reduce or eliminate customization.

70. In portfolio analysis, the goal when purchasing leverage items is:

a. minimize total cost of ownership.
b. minimize acquisition time and cost and price per unit..
c. reduce or eliminate customization.
d. assure continuous supply at lowest total cost of ownership.
e. assure quality at expected levels.

71. Although associated with a number of factors, the learning curve normally is most closely identified with the analysis of:

i. tooling costs.
ii. profit rates.
iii. overhead costs.
iv. direct labor costs.
v. direct material costs.

72. When estimating the costs of a manufacturing supplier:

a. prices of raw materials are not commonly accessible.
b. equipment depreciation is typically the largest single cost element in overhead.
c. material costs are difficult to estimate.
d. direct labor costs are the easiest costs to estimate.
e. labor rates are typically uniform across different plant locations.

True and False

10. Besides price determination, there are very few areas in supply management where negotiation is a useful and cost-effective tool.

11. Activity based costing primarily is an accounting process that has little practical value for buyers.

12. Value engineering (VE) and value analysis (VA) refer to the same process, but VE is applied to the design stage, and VA is applied to redesign.

13. When cost analysis is applied to a supplier’s price, the buyer focuses on identifying an overall cost reduction target with little insight into specific cost elements.

14. If the goal of negotiation is performance, then the process and tactics used during the negotiation are important because they have great impact on the intention to perform.

15. Educating suppliers about the buying organization’s operations is an example of a transaction cost in the total cost of ownership model.

16. In negotiation, a fact is any piece of information on which the buyer believes he or she can negotiate an agreement with the supplier.

17. Value methodology is a systematic approach to analyzing the functions of a product, part, service, or process to satisfy all needed quality and user requirements at optimum total cost of ownership.

18. A unique cost model is one that applies to a variety of common supply situations.

19. In planning for negotiation, a factor or item of information over which disagreement is expected is known as an issue.

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CHAPTER 5

Make or Buy, Insourcing and Outsourcing

32. One of the most fundamental and critical decisions in any organization is, should we:

a. have a single source or multiple sources for a specific purchase?
b. order small quantities to avoid carrying costs or large quantities to get volume discounts?
c. switch suppliers because of a slight price discount from a potential supplier?
d. make or buy the needed good or service?
e. enter into a long- or short-term agreement with a supplier?

33. When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend:

a. insourcing.
b. outsourcing.
c. continuing to make.
d. continuing to buy.
e. near-sourcing..

34. Deciding what represents a core competency in an organization is:

a. a decision best left to the organization’s Board of Directors.
b. a decision best left to the Chief Executive Officer.
c. always the same for companies in the same industry.
d. a fairly easy decision once organizational goals and objectives are known.
e. often a fairly complex decision and a function of many factors.

35. Outsourcing of services is:

a. unrealistic because of the difficulty in measuring and evaluating the performance of service providers.
b. realistic if the internal users and the buyer can carefully define service requirements and quality expectations.
c. declining in popularity because of buyers’ dissatisfaction with most third party service providers.
d. realistic because of the ease in measuring and evaluating performance of service providers.
e. realistic because it is relatively easy to define service requirements and measure the quality of a service provider.

36. Currently, managements tend toward:

a. making rather than buying.
b. buying parts and assembling them onsite.
c. insourcing entire operations.
d. outsourcing entire operations.
e. making anything that is low risk.

37. Outsourcing:

a. is often chosen as a way for the organization to reduce or control operating costs, improve company focus, and gain access to world-class capabilities.
b. is a low risk venture because the firm can always revert back to performing the function in-house at low cost.
c. occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing.
d. usually results in increased hiring to attain expertise that the organization does not already possess.
e. decisions are based on financial factors that most organizations can easily access through their accounting system.

38. In the outsourcing decisions in many organizations, supply has had:

a. a leadership role.
b. extensive involvement.
c. relatively moderate involvement.
d. limited involvement
e. virtually no involvement.

39. Supply managers believe they can add the most value to the outsourcing decision by:

a. advising the outsourcing team on relevant contractual terms and conditions.
b. reviewing the analysis conducted by the outsourcing team.
c. providing a comprehensive, competitive process.
d. being available if the internal users want their assistance.
e. managing the contract once the decision has been implemented.

40. Supply management:

a. has been outsourced in many organizations because it is not a core competency.
b. has been outsourced in many organizations because of its tactical nature.
c. has not been outsourced because the chief purchasing officer makes outsourcing decisions.
d. and logistics have not been outsourced because both are considered core competencies in most organizations.
e. is seldom outsourced in its entirety, but activities such as inventory monitoring, order placement, and order receiving are outsourced.

41. Subcontracting refers to the practice of:

a. a prime contractor bidding out part of a job to another contractor.
b. an organization hiring a contractor to perform a task it has been doing in house.
c. an organization hiring substitute labor to cover for a supplier’s labor shortage.
d. a prime contractor bidding on another contractor’s incomplete jobs.
e. a prime contractor hiring substitute labor during a strike.

Loss of control is:

a. seldom a concern when considering outsourcing.
b. a concern of the supplier in an outsourcing situation.
c. a concern within the buying organization when considering outsourcing.
d. one of the advantages of outsourcing.
e. one reason few organizations outsource services.

True and False

1. Insourcing and outsourcing occur when a newly formed company first decides what to make inhouse and what to buy from suppliers.

2. Some of the concerns about outsourcing are centered around layoffs, exposure to supplier’s risks, and unexpected fees.

3. Some of the reasons an organization may decide to make rather than buy are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

4. The gray zone in make or buy provides the opportunity to test and learn without fully committing to make or buy.

5. Some of the reasons an organization may decide to buy rather than make are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

6. Supply managers typically recommend insourcing.

7. Outsourcing is prevalent in both the private and public sectors.

8. Growth in outsourcing in the logistics area can be attributed to growing deregulation of transportation companies.
9. Subcontracts are useful when the work is easy to define, has a short time horizon, and is relatively inexpensive.

10. The logistics function and tasks such as freight auditing, leasing, and maintenance and repair are often outsourced because they typically do not represent core competencies.

CHAPTER 6

Need Identification and Specification

42. An advantage of buying by performance or function over other specification methods is that it provides:

a. evidence that the buyer has given thought and careful study to the need and the ways in which it may be satisfied.
b. the opportunity for the potential supplier to establish how to make the most suitable product.
c. the potential for equitable competition by ensuring that the suppliers are quoting for exactly the same material or service.
d. a standard for measuring and checking materials as supplied.
e. an opportunity to purchase identical requirements from a number of different sources of supply.

2. Supply’s growing involvement in the acquisition of services may be explained by:

a. declining technical knowledge of internal users of services.
b. the need for more of a personal relationship with the service supplier.
c. the fact that price and service-delivery requirements are complex.
d. the growing respect for supply managers as equals in the organization.
e. the high dollars spent on services and the opportunities to reduce costs.

3. Capital assets are long-term assets that:

a. are bought and sold in the regular course of business.
b. have an expected use of less than one year.
c. have an ongoing effect on the organization’s operations.
d. are generally expensed.
a. are acquired for fairly small sums of money.

4. When a specification is widely known, commonly recognized and readily available to every buyer, it is called a:

1. standard specification.
2. performance specification.
3. individual specification.
4. market grade specification.
5. customized specification.

5. Early supply involvement can be accomplished by:

a. staffing the engineering department with supply professionals.
b. using cross-functional teams on new product development.
c. encouraging internal customers to regularly interact with suppliers.
d. empowering internal customers to evaluate and select suppliers.
e. co-locating accounting staff in the purchasing/supply department.

6. Description by brand:

a. may be a preference of an internal user, but it is never a necessity.
b. is the least risky and lowest cost approach to attaining “best value.”
c. may be a necessity because the manufacturing process is secret.
d. should always be discouraged by the buyer.
e. indicates a supplier has unduly influenced someone in the buyer’s organization.

7. The purpose of identifying the function of an item to be required is:

a. to provide the mathematics for a suitable inspection program.
b. to assist in the determination of what represents acceptable value.
c. to avoid having to purchase a branded item.
d. to avoid substitution.
e. to avoid engineering-purchasing arguments.

8. A buyer may be compelled to purchase by specification when:

a. a high degree of supplier expertise or skill is required and difficult to define.
b. the internal user’s preferences are impossible to overcome.
c. a supplier holds a needed patent.
d. an opportunity exists to purchase identical requirements from several sources.
e. the buyer wants the supplier to decide how to make the most suitable product.

9. Standardization:

a. means agreement on definite sizes, design, and quality.
b. is essentially a marketing and sales concept.
c. is a reduction in the number of sizes and designs.
d. is a selective and commercial problem.
e. is an attempt to concentrate production on the most important sizes.

10. Supply chain risks include:

a. interruptions to the flow of goods or services.
b. actions that lower the company’s attractiveness to the investment community.
c. lack of regulatory compliance.
d. a and c
e. a, b, and c

True and False

1. Quality as a term covers both functionality: “Does it do the job we want
done?” and conformance to specification: “Does it fit the specification agreed to?”

2. MRO stands for Maintenance, Resale, and Operating Supplies.

3. Capital items can be depreciated, are often bought under a separate budgetary allocation, and may require special financing arrangements.

4. Equipment, real estate, and construction are examples of capital acquisitions, but information technology is not.

5. Assets may be tangible or intangible.

6. Packaging is an easy category to buy because it has few disposal, environmental, and transportation implications.

7. Buying capital equipment differs from other types of purchases because determination of final cost includes estimates over the life of the equipment.

8. New technology frequently permits an organization to gain competitive advantage on the bases of different products and services at significantly lower cost.

9. For non-repetitive requirements, a system or process of acquisition can be designed.

10. The price of a semiprocessed material—steel sheets instead of ingots, frozen pork bellies instead of hogs, cocoa butter instead of beans—tends to move in the opposite direction of the price of the basic raw material.