Question 1

Decision trees:

Accepted Answer

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. 
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. C

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

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.

Accepted Answer

A) True 
 B)False  True

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

Supply management's role in environmental considerations is:

Accepted Answer

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. 
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.

Question 6

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

Accepted Answer

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. 
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.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Reverse marketing is:

Accepted Answer

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. 
E)  is most appropriate when the product is fairly standard and available from multiple local suppliers. 
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. 
E)  is most appropriate when the product is fairly standard and available from multiple local suppliers.

Question 10

Small suppliers:

Accepted Answer

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. 
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.

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Portfolio or quadrant analysis:

Accepted Answer

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 
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

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

To avoid risk, a buyer can:

Accepted Answer

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 
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

Question 16

Distributors, wholesalers, and retailers:

Accepted Answer

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. 
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.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements supports single sourcing:

Accepted Answer

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. 
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.

Question 19

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.

Accepted Answer

A) True 
 B)False

Decision trees:

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

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.

Supply management's role in environmental considerations is:

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

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

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

Reverse marketing is:

Small suppliers:

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.

Portfolio or quadrant analysis:

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

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

To avoid risk, a buyer can:

Distributors, wholesalers, and retailers:

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

Which of the following statements supports single sourcing:

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.

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

Cost Management

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 12: Supplier Selection

Decision trees:

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

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.

Supply management's role in environmental considerations is:

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

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

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

Reverse marketing is:

Small suppliers:

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.

Portfolio or quadrant analysis:

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

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

To avoid risk, a buyer can:

Distributors, wholesalers, and retailers:

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

Which of the following statements supports single sourcing:

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.

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

Cost Management

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters