Question 1

The goal of value engineering and value analysis is to:

Accepted Answer

A) perform a function at the same or an improved level while reducing costs. 
B) analyze the value-added from engineering services and production. 
C) analyze functions to satisfy all needed quality requirements at any cost. 
D) define value of a function in technically accurate and precise language. 
E) perform a function at an improved level at the same cost. 
A) perform a function at the same or an improved level while reducing costs. 
B) analyze the value-added from engineering services and production. 
C) analyze functions to satisfy all needed quality requirements at any cost. 
D) define value of a function in technically accurate and precise language. 
E) perform a function at an improved level at the same cost. A

Question 2

When planning a negotiation strategy,if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap,the negotiator must determine if the gap can be closed.

Accepted Answer

A) True 
 B)False  True

Question 3

All negotiations have an economic as well as a psychological dimension.

Accepted Answer

A) True 
 B)False  True

Question 4

The position of strength assessment focuses exclusively on the other party in the negotiation.

Accepted Answer

A) True 
 B)False

Question 5

Cost management tools and techniques that may provide data for negotiations with internal organizational stakeholders and/or externally with suppliers include:

Accepted Answer

A) activity-based costing. 
B) the learning curve. 
C) total cost of ownership. 
D) activity-based costing and total cost of ownership. 
E) activity-based costing,the learning curve and total cost of ownership. 
A) activity-based costing. 
B) the learning curve. 
C) total cost of ownership. 
D) activity-based costing and total cost of ownership. 
E) activity-based costing,the learning curve and total cost of ownership.

Question 6

Target costing starts with:

Accepted Answer

A) the selling price of an organization's end product minus the operating profit to establish the target cost. 
B) the supplier's price,and works to determine the selling price of the buying organization's end product or service. 
C) the supplier's price,and works to determine the supplier's true cost structure. 
D) the buyer's lowest reasonable price target,and works to a negotiated price agreed on by the buyer and the supplier. 
E) the selling price of an organization's end product minus actual manufacturing,overhead,and materials costs to determine operating profit. 
A) the selling price of an organization's end product minus the operating profit to establish the target cost. 
B) the supplier's price,and works to determine the selling price of the buying organization's end product or service. 
C) the supplier's price,and works to determine the supplier's true cost structure. 
D) the buyer's lowest reasonable price target,and works to a negotiated price agreed on by the buyer and the supplier. 
E) the selling price of an organization's end product minus actual manufacturing,overhead,and materials costs to determine operating profit.

Question 7

Qualifying sources is an example of a post-transaction cost phase in the total cost of ownership model.

Accepted Answer

A) True 
 B)False

Question 8

FinTech firms assist manufacturers in the development and implementation of process technology innovation.

Accepted Answer

A) True 
 B)False

Question 9

Life cycle costing (LCC):

Accepted Answer

A) includes all relevant costs expected in the first three years of ownership. 
B) focuses on purchase price that is typically the highest percentage of LCC. 
C) shows the phases of product evolution from growth to maturity. 
D) may include costs that are 10-15 years in the future and highly uncertain. 
E) can be applied to all types of purchases except capital acquisitions. 
A) includes all relevant costs expected in the first three years of ownership. 
B) focuses on purchase price that is typically the highest percentage of LCC. 
C) shows the phases of product evolution from growth to maturity. 
D) may include costs that are 10-15 years in the future and highly uncertain. 
E) can be applied to all types of purchases except capital acquisitions.

Question 10

Purchasers can use activity-based costing to:

Accepted Answer

A) eliminate nonvalue-adding activities. 
B) reduce activity occurrences. 
C) reduce the cost driver rate. 
D) eliminate nonvalue-adding activities and reduce the cost driver rate. 
E) eliminate nonvalue-adding activities,reduce activity occurrences and reduce the cost driver rate. 
A) eliminate nonvalue-adding activities. 
B) reduce activity occurrences. 
C) reduce the cost driver rate. 
D) eliminate nonvalue-adding activities and reduce the cost driver rate. 
E) eliminate nonvalue-adding activities,reduce activity occurrences and reduce the cost driver rate.

Question 11

An externally focused process of analyzing costs in terms of the overall supply chain is called strategic cost management.

Accepted Answer

A) True 
 B)False

Question 12

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s):

Accepted Answer

A) standard specification or commodity-type items. 
B) switching suppliers is difficult. 
C) supplier technology is important. 
D) standard specification or commodity-type items and supplier technology is important. 
E) standard specification or commodity-type items,switching suppliers is difficult and supplier technology is important. 
A) standard specification or commodity-type items. 
B) switching suppliers is difficult. 
C) supplier technology is important. 
D) standard specification or commodity-type items and supplier technology is important. 
E) standard specification or commodity-type items,switching suppliers is difficult and supplier technology is important.

Question 13

In portfolio analysis,the goal when purchasing bottleneck items is to:

Accepted Answer

A) assure quality at expected levels. 
B) reduce or eliminate customization. 
C) assure lowest total cost of ownership. 
D) minimize acquisition time and cost. 
E) minimize price per unit. 
A) assure quality at expected levels. 
B) reduce or eliminate customization. 
C) assure lowest total cost of ownership. 
D) minimize acquisition time and cost. 
E) minimize price per unit.

Question 14

In portfolio analysis,strategic goods and service are both more valuable to the buying organization and riskier to acquire.

Accepted Answer

A) True 
 B)False

Question 15

When estimating the cost structure of a manufacturing supplier:

Accepted Answer

A) material costs are difficult to estimate. 
B) direct labor costs are the easiest costs to estimate. 
C) prices of raw materials are not commonly accessible. 
D) labor rates are typically uniform across different plant locations. 
E) equipment depreciation is typically the largest cost element in overhead. 
A) material costs are difficult to estimate. 
B) direct labor costs are the easiest costs to estimate. 
C) prices of raw materials are not commonly accessible. 
D) labor rates are typically uniform across different plant locations. 
E) equipment depreciation is typically the largest cost element in overhead.

Question 16

Cost management for services:

Accepted Answer

A) is confined to internal demand analysis and consumption management. 
B) is confined to supplier cost structure analysis. 
C) includes demand management and supplier cost structure analysis. 
D) focuses primarily on better design of the service. 
E) is only possible when the service is highly tangible. 
A) is confined to internal demand analysis and consumption management. 
B) is confined to supplier cost structure analysis. 
C) includes demand management and supplier cost structure analysis. 
D) focuses primarily on better design of the service. 
E) is only possible when the service is highly tangible.

Question 17

Value engineering (VE)and value analysis (VA)use the same methods,but VA is performed in the design stage and VE is performed in the redesign stage.

Accepted Answer

A) True 
 B)False

Question 18

Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

Accepted Answer

A) True 
 B)False

Question 19

After identifying and implementing supply cost savings,the supply manager should:

Accepted Answer

A) validate the savings with finance/accounting. 
B) evaluate potential implications for changes to the budget. 
C) notify the budget holder so he or she can use the savings for other expenses or projects. 
D) validate the savings with finance/accounting and evaluate potential implications for changes to the budget. 
E) validate the savings with finance/accounting,evaluate potential implications for changes to the budget and notify the budget holder so he or she can use the savings for other expenses or projects. 
A) validate the savings with finance/accounting. 
B) evaluate potential implications for changes to the budget. 
C) notify the budget holder so he or she can use the savings for other expenses or projects. 
D) validate the savings with finance/accounting and evaluate potential implications for changes to the budget. 
E) validate the savings with finance/accounting,evaluate potential implications for changes to the budget and notify the budget holder so he or she can use the savings for other expenses or projects.

Question 20

In portfolio analysis,bottleneck items are characterized by high risk and high value.

Accepted Answer

A) True 
 B)False

The goal of value engineering and value analysis is to:

When planning a negotiation strategy,if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap,the negotiator must determine if the gap can be closed.

All negotiations have an economic as well as a psychological dimension.

The position of strength assessment focuses exclusively on the other party in the negotiation.

Cost management tools and techniques that may provide data for negotiations with internal organizational stakeholders and/or externally with suppliers include:

Target costing starts with:

Qualifying sources is an example of a post-transaction cost phase in the total cost of ownership model.

FinTech firms assist manufacturers in the development and implementation of process technology innovation.

Life cycle costing (LCC):

Purchasers can use activity-based costing to:

An externally focused process of analyzing costs in terms of the overall supply chain is called strategic cost management.

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s):

In portfolio analysis,the goal when purchasing bottleneck items is to:

In portfolio analysis,strategic goods and service are both more valuable to the buying organization and riskier to acquire.

When estimating the cost structure of a manufacturing supplier:

Cost management for services:

Value engineering (VE)and value analysis (VA)use the same methods,but VA is performed in the design stage and VE is performed in the redesign stage.

Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

After identifying and implementing supply cost savings,the supply manager should:

In portfolio analysis,bottleneck items are characterized by high risk and high value.

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Make or Buy,insourcing and Outsourcing

Need Identification and Specification

Quality

Quantity and Inventory

Delivery

Price

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 11: Cost Management

The goal of value engineering and value analysis is to:

When planning a negotiation strategy,if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap,the negotiator must determine if the gap can be closed.

All negotiations have an economic as well as a psychological dimension.

The position of strength assessment focuses exclusively on the other party in the negotiation.

Cost management tools and techniques that may provide data for negotiations with internal organizational stakeholders and/or externally with suppliers include:

Target costing starts with:

Qualifying sources is an example of a post-transaction cost phase in the total cost of ownership model.

FinTech firms assist manufacturers in the development and implementation of process technology innovation.

Life cycle costing (LCC):

Purchasers can use activity-based costing to:

An externally focused process of analyzing costs in terms of the overall supply chain is called strategic cost management.

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s):

In portfolio analysis,the goal when purchasing bottleneck items is to:

In portfolio analysis,strategic goods and service are both more valuable to the buying organization and riskier to acquire.

When estimating the cost structure of a manufacturing supplier:

Cost management for services:

Value engineering (VE)and value analysis (VA)use the same methods,but VA is performed in the design stage and VE is performed in the redesign stage.

Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

After identifying and implementing supply cost savings,the supply manager should:

In portfolio analysis,bottleneck items are characterized by high risk and high value.

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Make or Buy,insourcing and Outsourcing

Need Identification and Specification

Quality

Quantity and Inventory

Delivery

Price

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters