Question 1

Supply managers believe they can add the most value to the outsourcing decision by:

Accepted Answer

A)  advising the outsourcing team on relevant contractual terms and conditions. 
B)  reviewing the analysis conducted by the outsourcing team. 
C)  providing a comprehensive, competitive process. 
D)  being available if the internal users want their assistance. 
E)  managing the contract once the decision has been implemented. 
A)  advising the outsourcing team on relevant contractual terms and conditions. 
B)  reviewing the analysis conducted by the outsourcing team. 
C)  providing a comprehensive, competitive process. 
D)  being available if the internal users want their assistance. 
E)  managing the contract once the decision has been implemented. C

Question 2

Subcontracts are useful when the work is easy to define, has a short time horizon, and is relatively inexpensive.

Accepted Answer

A) True 
 B)False  False

Question 3

Some of the concerns about outsourcing are centered around layoffs, exposure to supplier's risks, and unexpected fees.

Accepted Answer

A) True 
 B)False  True

Question 4

Currently, managements tend toward:

Accepted Answer

A)  making rather than buying. 
B)  buying parts and assembling them onsite. 
C)  insourcing entire operations. 
D)  outsourcing entire operations. 
E)  making anything that is low risk. 
A)  making rather than buying. 
B)  buying parts and assembling them onsite. 
C)  insourcing entire operations. 
D)  outsourcing entire operations. 
E)  making anything that is low risk.

Question 5

In the outsourcing decisions in many organizations, supply has had:

Accepted Answer

A)  a leadership role. 
B)  extensive involvement. 
C)  relatively moderate involvement. 
D)  limited involvement 
E)  virtually no involvement. 
A)  a leadership role. 
B)  extensive involvement. 
C)  relatively moderate involvement. 
D)  limited involvement 
E)  virtually no involvement.

Question 6

Growth in outsourcing in the logistics area can be attributed to growing deregulation of transportation companies.

Accepted Answer

A) True 
 B)False

Question 7

Outsourcing:

Accepted Answer

A)  is often chosen as a way for the organization to reduce or control operating costs, improve company focus, and gain access to world-class capabilities. 
B)  is a low risk venture because the firm can always revert back to performing the function in-house at low cost. 
C)  occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing. 
D)  usually results in increased hiring to attain expertise that the organization does not already possess. 
E)  decisions are based on financial factors that most organizations can easily access through their accounting system. 
A)  is often chosen as a way for the organization to reduce or control operating costs, improve company focus, and gain access to world-class capabilities. 
B)  is a low risk venture because the firm can always revert back to performing the function in-house at low cost. 
C)  occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing. 
D)  usually results in increased hiring to attain expertise that the organization does not already possess. 
E)  decisions are based on financial factors that most organizations can easily access through their accounting system.

Question 8

The logistics function and tasks such as freight auditing, leasing, and maintenance and repair are often outsourced because they typically do not represent core competencies.

Accepted Answer

A) True 
 B)False

Question 9

Some of the reasons an organization may decide to buy rather than make are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Accepted Answer

A) True 
 B)False

Question 10

Loss of control is:

Accepted Answer

A)  seldom a concern when considering outsourcing. 
B)  a concern of the supplier in an outsourcing situation. 
C)  a concern within the buying organization when considering outsourcing. 
D)  one of the advantages of outsourcing. 
E)  one reason few organizations outsource services. 
A)  seldom a concern when considering outsourcing. 
B)  a concern of the supplier in an outsourcing situation. 
C)  a concern within the buying organization when considering outsourcing. 
D)  one of the advantages of outsourcing. 
E)  one reason few organizations outsource services.

Question 11

Outsourcing is prevalent in both the private and public sectors.

Accepted Answer

A) True 
 B)False

Question 12

Supply managers typically recommend insourcing.

Accepted Answer

A) True 
 B)False

Question 13

When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend:

Accepted Answer

A)  insourcing. 
B)  outsourcing. 
C)  continuing to make. 
D)  continuing to buy. 
E)  near-sourcing.. 
A)  insourcing. 
B)  outsourcing. 
C)  continuing to make. 
D)  continuing to buy. 
E)  near-sourcing..

Question 14

The gray zone in make or buy provides the opportunity to test and learn without fully committing to make or buy.

Accepted Answer

A) True 
 B)False

Question 15

Deciding what represents a core competency in an organization is:

Accepted Answer

A)  a decision best left to the organization's Board of Directors. 
B)  a decision best left to the Chief Executive Officer. 
C)  always the same for companies in the same industry. 
D)  a fairly easy decision once organizational goals and objectives are known. 
E)  often a fairly complex decision and a function of many factors. 
A)  a decision best left to the organization's Board of Directors. 
B)  a decision best left to the Chief Executive Officer. 
C)  always the same for companies in the same industry. 
D)  a fairly easy decision once organizational goals and objectives are known. 
E)  often a fairly complex decision and a function of many factors.

Question 16

Insourcing and outsourcing occur when a newly formed company first decides what to make inhouse and what to buy from suppliers.

Accepted Answer

A) True 
 B)False

Question 17

Supply management:

Accepted Answer

A)  has been outsourced in many organizations because it is not a core competency. 
B)  has been outsourced in many organizations because of its tactical nature. 
C)  has not been outsourced because the chief purchasing officer makes outsourcing decisions. 
D)  and logistics have not been outsourced because both are considered core competencies in most organizations. 
E)  is seldom outsourced in its entirety, but activities such as inventory monitoring, order placement, and order receiving are outsourced. 
A)  has been outsourced in many organizations because it is not a core competency. 
B)  has been outsourced in many organizations because of its tactical nature. 
C)  has not been outsourced because the chief purchasing officer makes outsourcing decisions. 
D)  and logistics have not been outsourced because both are considered core competencies in most organizations. 
E)  is seldom outsourced in its entirety, but activities such as inventory monitoring, order placement, and order receiving are outsourced.

Question 18

One of the most fundamental and critical decisions in any organization is, should we:

Accepted Answer

A)  have a single source or multiple sources for a specific purchase? 
B)  order small quantities to avoid carrying costs or large quantities to get volume discounts? 
C)  switch suppliers because of a slight price discount from a potential supplier? 
D)  make or buy the needed good or service? 
E)  enter into a long- or short-term agreement with a supplier? 
A)  have a single source or multiple sources for a specific purchase? 
B)  order small quantities to avoid carrying costs or large quantities to get volume discounts? 
C)  switch suppliers because of a slight price discount from a potential supplier? 
D)  make or buy the needed good or service? 
E)  enter into a long- or short-term agreement with a supplier?

Question 19

Outsourcing of services is:

Accepted Answer

A)  unrealistic because of the difficulty in measuring and evaluating the performance of service providers. 
B)  realistic if the internal users and the buyer can carefully define service requirements and quality expectations. 
C)  declining in popularity because of buyers' dissatisfaction with most third party service providers. 
D)  realistic because of the ease in measuring and evaluating performance of service providers. 
E)  realistic because it is relatively easy to define service requirements and measure the quality of a service provider. 
A)  unrealistic because of the difficulty in measuring and evaluating the performance of service providers. 
B)  realistic if the internal users and the buyer can carefully define service requirements and quality expectations. 
C)  declining in popularity because of buyers' dissatisfaction with most third party service providers. 
D)  realistic because of the ease in measuring and evaluating performance of service providers. 
E)  realistic because it is relatively easy to define service requirements and measure the quality of a service provider.

Question 20

Some of the reasons an organization may decide to make rather than buy are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Accepted Answer

A) True 
 B)False

Supply managers believe they can add the most value to the outsourcing decision by:

Subcontracts are useful when the work is easy to define, has a short time horizon, and is relatively inexpensive.

Some of the concerns about outsourcing are centered around layoffs, exposure to supplier's risks, and unexpected fees.

Currently, managements tend toward:

In the outsourcing decisions in many organizations, supply has had:

Growth in outsourcing in the logistics area can be attributed to growing deregulation of transportation companies.

Outsourcing:

The logistics function and tasks such as freight auditing, leasing, and maintenance and repair are often outsourced because they typically do not represent core competencies.

Some of the reasons an organization may decide to buy rather than make are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Loss of control is:

Outsourcing is prevalent in both the private and public sectors.

Supply managers typically recommend insourcing.

When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend:

The gray zone in make or buy provides the opportunity to test and learn without fully committing to make or buy.

Deciding what represents a core competency in an organization is:

Insourcing and outsourcing occur when a newly formed company first decides what to make inhouse and what to buy from suppliers.

Supply management:

One of the most fundamental and critical decisions in any organization is, should we:

Outsourcing of services is:

Some of the reasons an organization may decide to make rather than buy are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Need Identification and Specification

Quality

Quantity and Inventory

Delivery

Price

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 5: Make or Buy, Insourcing, and Outsourcing

Supply managers believe they can add the most value to the outsourcing decision by:

Subcontracts are useful when the work is easy to define, has a short time horizon, and is relatively inexpensive.

Some of the concerns about outsourcing are centered around layoffs, exposure to supplier's risks, and unexpected fees.

Currently, managements tend toward:

In the outsourcing decisions in many organizations, supply has had:

Growth in outsourcing in the logistics area can be attributed to growing deregulation of transportation companies.

Outsourcing:

The logistics function and tasks such as freight auditing, leasing, and maintenance and repair are often outsourced because they typically do not represent core competencies.

Some of the reasons an organization may decide to buy rather than make are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Loss of control is:

Outsourcing is prevalent in both the private and public sectors.

Supply managers typically recommend insourcing.

When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend:

The gray zone in make or buy provides the opportunity to test and learn without fully committing to make or buy.

Deciding what represents a core competency in an organization is:

Insourcing and outsourcing occur when a newly formed company first decides what to make inhouse and what to buy from suppliers.

Supply management:

One of the most fundamental and critical decisions in any organization is, should we:

Outsourcing of services is:

Some of the reasons an organization may decide to make rather than buy are: greater supply assurance, stringent quality requirements, and very small quantity requirements.

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Need Identification and Specification

Quality

Quantity and Inventory

Delivery

Price

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters