Exam 2: Purchasing Management

Blank check purchase orders, Corporate purchasing cards, Petty cash, and Open-end purchase orders are all possible alternatives to dealing with small value purchases such as those for office supplies.

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.

The total cost analysis demonstrates how other costs besides the unit cost can affect purchase decisions.

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through:

A reason for making items instead of buying them would include better quality control.

Global sourcing has become commonplace.Many companies now consider expanding their supply base to include foreign suppliers.List three reasons why companies choose to source globally.

Which of the following is a reason that single sourcing is considered risky/bad?

A form of purchasing that is placed directly to the supplier and suitable when firms use the same components to make standard goods over a relatively long period of time is referred to as:

Which of the following is a reason small value purchases are handled differently?

Answer the questions that follow, based on the diagram provided belw a.What are the fixed costs for the buy decision? b.What is the breakeven quantity for the two options illustrated? c.At Q = 300, would you choose the make or buy option? Why? d.At Q = 200, what will be the total cost associated with the best decision at this quantity?

Merchants primary task is to purchase raw materials for conversion purposes.

Cost savings is an advantage of using an e-procurement system.

Purchasing can be broadly classified into two categories: merchants and industrial buyers.

The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers.

A low ROA suggests that management is capable of generating large profits with relativiely small investments.

Benefits derived from implementing e-procurement systems include all of the following EXCEPT:

While most public procurement is focused on goals like those of purchasing departments in the private sector, U.S.federal government purchases must comply with the:

When calculating Return on Investment, current assets include:

Which of the following is NOT a form of countertrade?