Which of the following is not one of the categories of products in the strategic cost

management matrix?
A. Commodities.
B. One-time buys.
C. Critical products.
D. Unique products.
E. Generics.
B. One-time buys.
In forward-thinking enterprises, supply management seldom plays a key role in the
development of new products and services.
A. True
B. False
B. False
The degree of effort associated with supplier selection is inversely related to the
importance of the required good or service.
A. True
B. False
B. False
Excessive formality in negotiation can effectively constrain the parties and restrict the
free exchange of ideas and solutions.
A. True
B. False
A. True
Today, buyers seldom use the Internet to help locate potential sources that might
qualify for further evaluation.
A. True
B. False
B. False
Deciding the physical location of where to negotiate is an unimportant part of any
planning process.
A. True
B. False
B. False
According to Ohno and Toyota, _is a category of waste that produces items for which
there are no orders.
A excess inventory
B. overproduction
C. unnecessary movement
D. waiting time
E. defect
B. overproduction
A_ details the components or subassemblies and the quantity required to produce a
final part number or end item.
A. kanban
B. perfect order
C. bill of material file
D. DRP system
E. RFID system
C. bill of material file
Purchasing's right to evaluate and select suppliers means that sales representatives
are not allowed to talk with non-purchasing personnel.
A. True
B. False
B. False
Which of the following is a disadvantage of a categorical supplier evaluation system?
A. Least reliable.
B. Cost accounting system required
C. Less frequent generation of evaluations.
D. Most subjective.
E. Usually manual.
B. Cost accounting system required
Which of the following are not considered relationship management skills?
A. Ability to conduct detailed price and cost analyses
B. Ability to act ethically.
C. Ability to listen effectively.
D. Ability to communicate.
E. Ability to use creative problem-solving.
A. Ability to conduct detailed price and cost analyses
The emphasis of the____is on obtaining sufficient current revenue to pay for
operating cost rather than on profit.
A. price volume model
B. promotional pricing model
C. revenue pricing model
D. market skimming model
E. competition pricing model
C. revenue pricing model
The process that buyers use to select suppliers does not vary widely depending on
the required item and the relationship that a buyer has with its suppliers.
A. True
B. False
B. False
_ means continuous improvement and must be built into every single process in the
organization.
A. Banzai
B. Optimization
C. Gung ho
D. Kaizen
E. Bonsai
D. Kaizen
__of inventory pertains to the unit cost of the inventory.
A. Volume
B. Velocity
C. Value
D. Virtue
E. None of the above.
C. Value
Many suppliers do not have a sophisticated cost accounting system and are unable
to assign overhead costs to products or processes.
A. True
B. False
Many suppliers do not have a sophisticated cost accounting system and are unable
to assign overhead costs to products or processes.
A. True
B. False
According to ISM,_____is a framework of measurable corporate policies and
procedures and resulting behavior designed to benefit the workplace and, by
extension, the individual, the organization, and the community.
A. supply chain risk management
B. sustainability
C. ISO 9000:2008
D. social responsibility
E. supplier development
D. social responsibility
Very few organizations use distributors to provide at least some portion of their
inventory requirements, particularly maintenance, repair, and operating supplies.
A. True
B. False
B. False
__are those costs incurred when production processes are designed or modified to
prevent defects from occurring in the first place.
A. Appraisal costs
B. Internal failure costs
C. External failure costs
D. Prevention costs
E. Six Sigma costs
D. Prevention costs
The TQM-focused organization must look at increasing process variation and
seeking innovation in both product and process.
A. True
B. False
B. False
A single source can never deliver cost and quality improvements over the life of a
contract even if a buyer manages that supplier effectively.
A. True
B. False
B. False
Today's emphasis on supplier quality has shifted from detecting defects at the time of
receipt or use to prevention early in the materials-sourcing process.
A. True
B. False
A. True
It can take only a few months for a company to adequately develop a quality
management system that is competitive for the MBNQA.
A. True
B. False
B. False
Although a quantity discount has a positive effect on the purchase price, a buyer
need not be cautious about the net impact on the total cost of an item.
A. True
B. False
B. False
A serious problem in measurement is that the data that managers pay attention to
are often the wrong data.
A. True
B. False
A. True
More complex logistics and currency fluctuations require measuring all relevant costs
before committing to a worldwide source.
A. True
B. False
A. True
The key to the success of any company is the quality of its employees.
A. True
B. False
A. True
The most basic and the easiest inventory-related cost to quantify and track is unit
cost.
A. True
B. False
A. True
Quality is only for manufacturing.
A. True
B. False
B. False
When firms produce goods in anticipation of future customer orders, they are
operating in a/an___environment.
A. assemble-to-order
B. make-to-order
C. make-to-stock
D. just-in-time
E. None of the above.
C. make-to-stock
The issues that are most critical to a supplier are likely to be those most critical to a
buyer.
A. True
B. False
B. False
Which of the following is not an example of points that should be considered when
evaluating a supplier's employee capabilities?
A. The degree to which employees are committed to quality and continuous
improvement.
B. The overall skills and abilities of the workforce.
C. Employee morale.
D. Workforce turnover.
E. Disclosure of environmental infractions.
E. Disclosure of environmental infractions.
(9966)
When firms produce goods in response to a customer order, they are operating in
a/an ___environment.

A. make-to-order
B. make-to-stock
C. make-to-forecast
D. WIP
E. None of the above.
A. make-to-order
Which of the following is not one of the expectations that suppliers have in a typical
supply chain relationship?
A. Minimizing product design changes once production begins.
B. Providing visibility to future purchase volume requirements.
C. Sharing early access and visibility to new-product requirements.
D. Valuing accurate and timely payment of invoices.
E. Having the buyer co-locate its buying, engineering, and quality staffs into a
supplier's facility.
E. Having the buyer co-locate its buying, engineering, and quality staffs into a
supplier's facility.
_ is a negotiation tactic that involves taking a time out.
A. Silence
B. Venue
C. Caucus
D. Take-it-or-leave-it
E. Low ball
C. Caucus
In a _, when inventory is depleted to a given level, the system notifies the materials
control department (or the buyer in some organizations) to issue a request to a
supplier for inventory replenishment.
A. reorder point system
B. traveling purchase requisition system
C. customer service system
D. forecasting system
E. just-in-time system
A. reorder point system
Effective supply market intelligence involves all of the following except_
A. updating supply markets and trends and translating their impacts on key business
outcomes
B. ensuring that purchasing does not exceed its annual operating budget
C. identifying emerging materials and service technologies to support company
strategies in key performance areas
D. developing supply options and contingency plans to reduce risk
E. supporting the organization's requirements for a diverse and globally competitive
supply base
B. ensuring that purchasing does not exceed its annual operating budget
Which of the following is not true in regards to low-cost country sourcing?
A. Low-cost country sourcing can be used to access new markets or to gain access
to the same suppliers that are helping global companies become more competitive.
B. Although there has been a strong push to source from emerging BRIC countries in
search of lower costs, there has also been a strong push toward sourcing in these
countries because of local content requirements
established by governments in these areas.
C. Global sourcing is an opportunity to gain exposure to product and process
technology, increase the number of available sources, ...
D. Some buyers source globally to introduce competition to domestic suppliers.
E. Firms are highly experienced with global business processes and practices, and
there are many personnel qualified to develop and negotiate with global suppliers or
manage material pipelines.
E. Firms are highly experienced with global business processes and practices, and
there are many personnel qualified to develop and negotiate with global suppliers or
manage material pipelines.
In the _ the desired profit is added to the estimated costs.
A. penetration pricing model
B. revenue pricing model
C. margin pricing model
D. rate-of-return pricing model
E. TCO model
D. rate-of-return pricing model
The___buys from the OEM and resells, therefore incurring a transaction cost, and it
must make a profit.
A. vendo
B. customer
C. preferred supplier
D. single source supplier
E. distributor
E. distributor
Although this sounds difficult, it is often easy to develop measures that direct
behavior or activity exactly as intended.
A. True
B. False
B. False
Which of the following is not one of the objectives in supplier performance
management?
A. Selecting suppliers that are competitive.
B. Identifying new suppliers that have the potential for excellent performance and
developing closer relationships with these suppliers.
C. Improving existing suppliers.
D. Developing new suppliers that are not competitive with current suppliers.
E. Ensuring timely and accurate payment of supplier invoices.
E. Ensuring timely and accurate payment of supplier invoices.
A___visually displays the tasks and times associated with a project and consists of a
horizontal bar chart with activities listed vertically and times or dates displayed
horizontally
A. PERT tool
B. Gantt chart
C. CPM tool
D. TCO chart
E. networking tool
B. Gantt chart
In TCO for a service, _include all costs associated with the performance of the
service that are not included in the purchase price.
A. invoice costs
B. usage costs
C. acquisition costs
D. end of life costsend of life costs
E. interest costs
B. usage costs
Which of the following is one of the dimensions used in developing a clear
understanding of the buyer's expectations and requirements?
A. The ability of the buyer to succinctly identify, define, quantify, or specify its
technical and sourcing requirements.
B. The seller's ability to effectively communicate its requirements.
C. How compatible the buyer's and supplier's respective corporate cultures are.
D. The ability of the selling company to succinctly identify, clearly define, quantify, or
specify its technical and sourcing requirements.
E. None of the above.
A. The ability of the buyer to succinctly identify, define, quantify, or specify its
technical and sourcing requirements.
While similar in concept, blanket purchase orders are typically used more often for
_purchases.
A. unique
B. lower-value
C. complex
D. spot buy
E. There are no differences in the types of products or amounts purchased in either
method.
B. lower-value
All of the following action support reduced order-cycle time with suppliers except _
A. expanded global sourcing
B. expanded electronic capability
C. supplier development support
D. order-cycle time measurement
E. focus on second- and third-tier suppliers
A. expanded global sourcing
Direct in a supplier's operations by buyer personnel is the most challenging part of
any supplier development process.
A. True
B. False
A. True
Some sellers rely on a detailed analysis of internal cost structures to establish price,
whereas others simply price at a level comparable to the competition.
A. True
B. False
A. True
Which of the following elements is false regarding Phase 1, Basic Beginnings, of
supply management strategy development?
A. Quality/cost teams.
B. Longer-term contracts.
C. Volume leveraging
D. Supply-base consolidation.
E. Early sourcing.
E. Early sourcing.
Competition today is no longer between firms; it is between the supply chains of
those firms.
A. True
B. False
A. True
The _____, which the supplier provides, details the contents of a shipment and
contains the description and quantity of the items in a shipment.
a. material packing slip
b. purchase requisition
c. bill of lading
d. electronic funds transfer
e. request for quotation
a. material packing slip
In the manufacturing sector, the percentage of purchases to sales averages 55
percent.
A. True
B. False
A. True
It is a common and preferred current practice for suppliers to arrange shipment to a
purchaser and simply include the transportation cost as part of the purchase cost
A. True
B. False
B. False
Suppliers of critical nonstandard commodities are involved much later in the product
development initiative.
A. True
B. False
B. False
[A] _____ is a tool to structure and segment the supply base and is used as a means
of classifying suppliers into one of four types.
a. Supplier scorecard
b. Portfolio analysis
c. Make-buy analysis
d. Price analysis
e. Value chain analysis
b. Portfolio analysis
Membership on a team can have negative effects on individuals
A. True
B. False
A. True
The use of cross-functional sourcing teams guarantees a successful outcome to a
project or assignment.
A. True
B. False
B. False
Supplier site visits are relatively inexpensive and require minimal buyer time in travel
and informat collection.
A. True
B. False
B. False
Supply base optimization usually refers to increasing the number of suppliers used.
A. True
B. False
B. False
The whole point of collecting _____ is to understand the prevailing market conditions
and the ability of current or potential new suppliers to deliver the product or service
effectively.
a. customer data
b. secondary data
c. internal data
d. spend analysis data
e. market research
e. market research
Which of the following information is not generally maintained in a supplier
informational database?
a.
Current products.
b.
Supplier's future technology roadmap.
c.
Process capability ratios.
d.
Advertising campaign information.
e.
Past performance.
d.
Advertising campaign information.
Even when given the proper climate in which to work, most people do not want to do
a good job.
A. True
B. False
B. False
A buyer cannot realistically expect the highest levels of supplier performance when
the supplier must respond to frequent or short lead time changes.
A. True
B. False
A. True
In recent years, the concept of quality has changed radically from meeting customer
requirements or expectations to exceeding them.
A. True
B. False
A. True
Many purchasers prefer to focus on suppliers who have the 'capability to do the job"
regardless of
A. True
B. False
A. True
Sustainability reflects only the importance of strategic environmental practices of an
organization's suppliers but not the management of social responsibility in the supply
base.
A. True
B. False
B. False
The categorical approach to supplier evaluation is commonly used by smaller
organizations because it is both easy and relatively inexpensive to implement.
A. True
B. False
A. True
Target pricing is an innovative approach used in the final stages of the product life
cycle to establish a contract price between a buyer and a seller.
A. True
B. False
B. False
Which of the following is not one of the advantages of a rationalized and optimized
supply base?
a.
Buying from world-class suppliers.
b.
Use of full-service suppliers.
c.
Lower supply base administrative costs.
d.
Reduction of supply base risk.
e.
Absence of competition.
e.
Absence of competition.
Which of the following is not one of the advantages of a rationalized and optimized
supply base?
a.
Longer lead-times.
b.
Use of full-service suppliers.
c.
Lower total product cost.
d.
Ability to pursue complex supply management strategies.
e.
Buying from world-class suppliers.
a.
Longer lead-times.
In the _____, the supplier simply takes its estimate of costs and adds a markup
percentage to obtain the desired profit.
a.
margin pricing model
b.
cost markup pricing model
c.
total cost analysis model
d.
penetration pricing model
e.
revenue pricing model
b.
cost markup pricing model
_____ include(s) all costs incurred when a product, service, or capital equipment
reaches the end of its useful life, net of amounts received from the sale of remaining
product or the equipment (salvage value).
a.
Net present value costs
b.
Usage costs
c.
Purchase price
d.
End-of-life costs
e.
Opportunity costs
d.
End-of-life costs
When a process crosses functional boundaries, there is a risk that no one actually
owns or takes responsibility for the entire process
A. True
B. False
A. True
In TCO, _____ includes all costs associated with bringing the product, service, or
capital equipment to the customer's location.
a.
purchase price
b.
opportunity costs
c.
acquisition costs
d.
usage costs
e.
end of life costs
c.
acquisition costs
In TCO for a product, _____ include(s) all costs associated with converting the
purchased part/material into the finished product and supporting it through its usable
life.
a.
purchase price
b.
acquisition costs
c.
end of life costs
d.
opportunity costs
e.
usage costs
e.
usage costs
In TCO for a service, _____ include all costs associated with the performance of the
service that are not included in the purchase price.
a.
invoice costs
b.
usage costs
c.
acquisition costs
d.
end of life costsend of life costs
e.
interest costs
b.
usage costs
In TCO for capital equipment, _____ are all costs associated with operating the
equipment during its life.
a.
usage costs
b.
end of life costs
c.
opportunity costs
d.
acquisition costs
e.
training costs
a.
usage costs
According to Karrass, research indicates that e-mail-based negotiations typically take
less time to complete than those coo dures faces to rach .
A. True
B. False
B. False
In _____, the parties identify more than one issue where disagreement exists and
then agree to trade off these issues so that each party has one of its top-priority
issues satisfied.
a.
use non-specific compensation
b.
cut the costs for compliance
c.
expand the pie
d.
find a bridge solution
e.
logroll
e.
logroll
_____ is/are the ability to influence another person or organization to do something.
a.
Positions
b.
Planning
c.
Strategy
d.
Power
e.
None of the above.
d.
Power
Step 1 of Triangle Talk is _____.
a.
know exactly what they want
b.
propose action in a way they can accept
c.
know exactly what you want
d.
apply tactics to win the negotiation
e.
None of the above.
c.
know exactly what you want
A willingness to offer large concessions is always in the best interests of a buyer.
A. True
B. False
B. False
_____ of inventory refers to the amount of inventory that a firm owns at any given
time.
a.
Volume
b.
Velocity
c.
Value
d.
Vigor
e.
None of the above.
a.
Volume
____ represents the funds committed to operating a business, including the purchase
and holding of inventory.
a.
Pipeline inventory
b.
WIP
c.
MRP
d.
Working capital
e.
None of the above.
d.
Working capital
Purchasers should not accept any of the blame for delivery uncertainty.
A. True
B. False
B. False
According to JIT, inspection is a waste of both time and personnel caused by defects.
A. True
B. False
A. True
_____ inventory includes completed items or products that are available for shipment
or future customer orders.
a.
WIP
b.
Finished-goods
c.
MRO
d.
Pipeline/in-transit
e.
Raw materials and semifinished items
b.
Finished-goods
All of the following are conditions under which competitive bidding is effective except
_____.
a. the buyer has a preferred supplier for the item
b. volume is high enough to justify this method
c. the marketplace is competitive
d. the specifications or requirements are clear to the seller
e. adequate time is available for suppliers to evaluate the RFQs
a. the buyer has a preferred supplier for the item
[A/An] _____ consists of personnel from different functions and increasingly from
suppliers who are brought together to achieve supply management or supply chain-
related tasks.
a. Big R
b. External RM
c. cross-functional sourcing team
d. Little r
e. Internal RM
c. cross-functional sourcing team
All of the following are characteristics that define a collaborative buyer-supplier
relationship except _____.
a. one or a limited number of suppliers for each purchased item or family of items
b. a win-win approach to reward sharing
c. open exchange of information
d. a credible commitment to work together during difficult times
e. the buyer unilaterally resolving disputes
e. the buyer unilaterally resolving disputes
All of the following are examples of the different methods that supply management
will apply to achieve integration except _____.
a. Cross-functional or cross-organizational committees and teams
b. Hiring English majors into supply management to correct document language
c. Information systems such as videoconferencing and webmail
d. Process-focused organizations that are dedicated to certain processes
e. Colocation of suppliers and customers
b. Hiring English majors into supply management to correct document language
All of the following are phases in the benchmarking process except _____.
a.
planning
b.
analysis
c.
integration
d.
maturity
e.
total cost analysis
e.
total cost analysis
The _____ the proportion of the final product that suppliers provide, the _____ the
impact they will have on overall product cost and quality.
a.
smaller....greater
b.
larger....lesser
c.
smaller....more significant
d.
larger....greater
e.
There is no definitive relationship between proportion of final product provided by
suppliers and impact on overall product cost and quality.
d.
larger....greater
Which of the following is not a supplier-specific barrier to supplier development?
a.
No immediate benefit to supplier development is evident in the buying organization.
b.
Lack of commitment on the part of supplier's management.
c.
Supplier's management agrees to improvements but fails to implement the proposals.
d.
Supplier lacks engineering resources to implement solutions.
e.
Supplier lacks employee skill base to implement solutions.
a.
No immediate benefit to supplier development is evident in the buying organization.
All of the following are examples of entry qualifiers that suppliers must possess
before they proceed to the next phase of the evaluation and selection process except
_____.
a.
appropriate sales and marketing activities
b.
financial strength
c.
proven manufacturing or service capability
d.
capable and supportive management
e.
adequate facilities
a.
appropriate sales and marketing activities
_____ allows a buying organization to react more quickly when supply chain risk
events occur by already having previously prepared plans and proposed responses
in place in advance of the actual risk event.
a.
Hedging
b.
Use of third party intermediaries
c.
Multiple sourcing
d.
Scenario analysis
e.
None of the above.
d.
Scenario analysis
Scenario planning begins with the creation of viable working strategies and plans that
would allow managers to respond quickly in the event that a specific risk scenario
should actually come about.
A. True
B. False
B. False
In value stream mapping, the flow diagram that depicts the process and shows the
times and resources used at each step and the time delay between each step is
called a/an _____.
a.
anticipated state map
b.
future state map
c.
ideal state map
d.
current state map
e.
None of the above.
d.
current state map
Which of the following is not one of the common assumptions typically used in break-
even analysis?
a.
Fixed costs are never considered.
b.
Fixed costs remain constant over the period and volumes considered.
c.
Variable costs fluctuate in a linear fashion.
d.
Revenues vary directly with volume.
e.
Break-even analysis considers total costs rather than average costs.
a.
Fixed costs are never considered.