Question 1

The process for bidding in the public sector is generally similar to the private sector,although there are a few important differences.

Accepted Answer

A) True 
 B)False  True

Question 2

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

Accepted Answer

A) establish a policy of firm bidding. 
B) allow all bidders to change their bids prior to the bid opening. 
C) allow for negotiation after all bids are received. 
D) give prospective suppliers target cost. 
E) none of the above because competitive bidding is not fair. 
A) establish a policy of firm bidding. 
B) allow all bidders to change their bids prior to the bid opening. 
C) allow for negotiation after all bids are received. 
D) give prospective suppliers target cost. 
E) none of the above because competitive bidding is not fair. A

Question 3

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit,is commonly known as:

Accepted Answer

A) a fair price. 
B) a market price. 
C) a cost-based price. 
D) a buyer's market price. 
E) a seller's market price. 
A) a fair price. 
B) a market price. 
C) a cost-based price. 
D) a buyer's market price. 
E) a seller's market price. A

Question 4

Labor and material costs are typically:

Accepted Answer

A) semivariable costs. 
B) fixed costs. 
C) indirect costs. 
D) direct costs. 
E) semivariable costs and fixed costs. 
A) semivariable costs. 
B) fixed costs. 
C) indirect costs. 
D) direct costs. 
E) semivariable costs and fixed costs.

Question 5

The cost approach to pricing:

Accepted Answer

A) is the only defensible pricing mechanism for ethical companies to use. 
B) implies that prices are set based on the cost the market will bear. 
C) means prices are adjusted to ensure the selling organization recoups all costs. 
D) implies that cost analysis is the only technique to be used to negotiate prices. 
E) means prices are set to cover direct costs,contribute to indirect costs,and provide a profit. 
A) is the only defensible pricing mechanism for ethical companies to use. 
B) implies that prices are set based on the cost the market will bear. 
C) means prices are adjusted to ensure the selling organization recoups all costs. 
D) implies that cost analysis is the only technique to be used to negotiate prices. 
E) means prices are set to cover direct costs,contribute to indirect costs,and provide a profit.

Question 6

This bond guarantees work will be done according to specifications,in the time specified,and if another supplier does rework or completes the order,purchasing is indemnified for these extra costs.

Accepted Answer

A) bid bond. 
B) performance bond. 
C) lien bond. 
D) payment bond. 
E) surety bond. 
A) bid bond. 
B) performance bond. 
C) lien bond. 
D) payment bond. 
E) surety bond.

Question 7

Hedging is a way to:

Accepted Answer

A) ensure lowest price. 
B) try to minimize price and currency exchange risks. 
C) minimize collusive bidding. 
D) set trade discounts. 
E) evaluate quantity discounts. 
A) ensure lowest price. 
B) try to minimize price and currency exchange risks. 
C) minimize collusive bidding. 
D) set trade discounts. 
E) evaluate quantity discounts.

Question 8

The lowest bid may not receive the order if:

Accepted Answer

A) the buyer discovers the lowest bidder is unreliable. 
B) the lowest bid is higher than the buyer believes justifiable. 
C) there is reason to believe the bidders colluded. 
D) the lowest bid is higher than the buyer believes justifiable and there is reason to believe the bidders colluded. 
E) the buyer discovers the lowest bidder is unreliable,the lowest bid is higher than the buyer believes justifiable and there is reason to believe the bidders colluded. 
A) the buyer discovers the lowest bidder is unreliable. 
B) the lowest bid is higher than the buyer believes justifiable. 
C) there is reason to believe the bidders colluded. 
D) the lowest bid is higher than the buyer believes justifiable and there is reason to believe the bidders colluded. 
E) the buyer discovers the lowest bidder is unreliable,the lowest bid is higher than the buyer believes justifiable and there is reason to believe the bidders colluded.

Question 9

The purchasing manager indexes (PMIs)are leading economic indicators derived from monthly surveys of purchasing managers about forecasted company conditions.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) parts,components,and packaging. 
B) raw materials. 
C) maintenance,repair,and operating supplies. 
D) services. 
E) capital assets. 
A) parts,components,and packaging. 
B) raw materials. 
C) maintenance,repair,and operating supplies. 
D) services. 
E) capital assets.

Question 11

A cash discount of 1/15,N/30 (1 percent cash discount if payment is made in 15 days,with the gross amount due in 30 days)is the equivalent of what approximate interest rate?

Accepted Answer

A) 24 percent. 
B) 30 percent. 
C) 36 percent. 
D) 45 percent. 
E) 54 percent. 
A) 24 percent. 
B) 30 percent. 
C) 36 percent. 
D) 45 percent. 
E) 54 percent.

Question 12

If identical bids are received,the buyer might choose to:

Accepted Answer

A) reject all bids. 
B) initiate an investigation. 
C) negotiate with one or more suppliers. 
D) reject all bids and initiate an investigation. 
E) reject all bids and negotiate with one or more suppliers. 
A) reject all bids. 
B) initiate an investigation. 
C) negotiate with one or more suppliers. 
D) reject all bids and initiate an investigation. 
E) reject all bids and negotiate with one or more suppliers.

Question 13

If the delivery date is some months or years away and if there is substantial chance of price escalation,a supplier may feel that there is far too much risk of loss to agree to sell under a:

Accepted Answer

A) firm-fixed-price plus incentive fee (FFPIF). 
B) firm-fixed-price (FFP). 
C) cost-no-fee (CNF). 
D) cost-plus-fixed-fee (CPFF). 
E) cost-plus-incentive-fee (CPIF). 
A) firm-fixed-price plus incentive fee (FFPIF). 
B) firm-fixed-price (FFP). 
C) cost-no-fee (CNF). 
D) cost-plus-fixed-fee (CPFF). 
E) cost-plus-incentive-fee (CPIF).

Question 14

Fixed costs generally remain the same regardless of the number of units produced.

Accepted Answer

A) True 
 B)False

Question 15

Canceling a contract for a technicality when market prices are falling is considered an acceptable and ethical practice.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Farmers turn to marketing and production contracts when they perceive the efficacy of spot markets to be inadequate in handling their risks,and processors turn to contracts as a way to encourage farmers to produce specific products at desired times.

Accepted Answer

A) True 
 B)False

Question 18

An exception to firm bidding allows the buyer and bidders the flexibility to clarify and define specifications and prices after the initial bids are received,and then bidders submit best-and-final-offers (BAFOs).

Accepted Answer

A) True 
 B)False

Question 19

Costs incurred in the operation of a production plant or process,but normally cannot be related directly to any given unit of production or service provided,are called:

Accepted Answer

A) direct costs. 
B) variable costs. 
C) semivariable costs. 
D) indirect costs. 
E) fixed costs. 
A) direct costs. 
B) variable costs. 
C) semivariable costs. 
D) indirect costs. 
E) fixed costs.

Question 20

Accepting a price discount for ordering larger quantities leads to lower levels of anticipation inventory.

Accepted Answer

A) True 
 B)False

The process for bidding in the public sector is generally similar to the private sector,although there are a few important differences.

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit,is commonly known as:

Labor and material costs are typically:

The cost approach to pricing:

This bond guarantees work will be done according to specifications,in the time specified,and if another supplier does rework or completes the order,purchasing is indemnified for these extra costs.

Hedging is a way to:

The lowest bid may not receive the order if:

The purchasing manager indexes (PMIs)are leading economic indicators derived from monthly surveys of purchasing managers about forecasted company conditions.

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

A cash discount of 1/15,N/30 (1 percent cash discount if payment is made in 15 days,with the gross amount due in 30 days)is the equivalent of what approximate interest rate?

If identical bids are received,the buyer might choose to:

If the delivery date is some months or years away and if there is substantial chance of price escalation,a supplier may feel that there is far too much risk of loss to agree to sell under a:

Fixed costs generally remain the same regardless of the number of units produced.

Canceling a contract for a technicality when market prices are falling is considered an acceptable and ethical practice.

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

Farmers turn to marketing and production contracts when they perceive the efficacy of spot markets to be inadequate in handling their risks,and processors turn to contracts as a way to encourage farmers to produce specific products at desired times.

An exception to firm bidding allows the buyer and bidders the flexibility to clarify and define specifications and prices after the initial bids are received,and then bidders submit best-and-final-offers (BAFOs).

Costs incurred in the operation of a production plant or process,but normally cannot be related directly to any given unit of production or service provided,are called:

Accepting a price discount for ordering larger quantities leads to lower levels of anticipation inventory.

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

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 10: Price

The process for bidding in the public sector is generally similar to the private sector,although there are a few important differences.

The fairest possible means of treating all suppliers alike in a competitive bidding situation is to:

The lowest price that ensures a continuous supply of the proper quality where and when needed and allows the supplier to make a reasonable profit,is commonly known as:

Labor and material costs are typically:

The cost approach to pricing:

This bond guarantees work will be done according to specifications,in the time specified,and if another supplier does rework or completes the order,purchasing is indemnified for these extra costs.

Hedging is a way to:

The lowest bid may not receive the order if:

The purchasing manager indexes (PMIs)are leading economic indicators derived from monthly surveys of purchasing managers about forecasted company conditions.

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

A cash discount of 1/15,N/30 (1 percent cash discount if payment is made in 15 days,with the gross amount due in 30 days)is the equivalent of what approximate interest rate?

If identical bids are received,the buyer might choose to:

If the delivery date is some months or years away and if there is substantial chance of price escalation,a supplier may feel that there is far too much risk of loss to agree to sell under a:

Fixed costs generally remain the same regardless of the number of units produced.

Canceling a contract for a technicality when market prices are falling is considered an acceptable and ethical practice.

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

Farmers turn to marketing and production contracts when they perceive the efficacy of spot markets to be inadequate in handling their risks,and processors turn to contracts as a way to encourage farmers to produce specific products at desired times.

An exception to firm bidding allows the buyer and bidders the flexibility to clarify and define specifications and prices after the initial bids are received,and then bidders submit best-and-final-offers (BAFOs).

Costs incurred in the operation of a production plant or process,but normally cannot be related directly to any given unit of production or service provided,are called:

Accepting a price discount for ordering larger quantities leads to lower levels of anticipation inventory.

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

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters