Question 1

The total purchase sales ratio the percentage of sales dollars paid out to suppliers) varies little from industry to industry.

Accepted Answer

A) True 
 B)False  False

Question 2

Supply management has evolved from a transaction-based, tactical function to a process-oriented, strategic function.

Accepted Answer

A) True 
 B)False  True

Question 3

The profit-leverage effect of supply savings means that:

Accepted Answer

A)  a reduction in money tied up in inventory improves profits. 
B)  a reduction in purchase spend increases profit more than an equal sales increase. 
C)  effective price negotiations with a supplier will lower the supplier's profits. 
D)  the buyer gains leverage over suppliers when purchases are standardized. 
E)  efficient and effective supply management processes will increase profits. 
A)  a reduction in money tied up in inventory improves profits. 
B)  a reduction in purchase spend increases profit more than an equal sales increase. 
C)  effective price negotiations with a supplier will lower the supplier's profits. 
D)  the buyer gains leverage over suppliers when purchases are standardized. 
E)  efficient and effective supply management processes will increase profits. B

Question 4

The increase in outsourcing has resulted in an increase in the percentage of revenue paid out to suppliers.

Accepted Answer

A) True 
 B)False

Question 5

Evidence of the growth and influence of supply management in an organization includes:

Accepted Answer

A)  fewer activities under the management or control of supply. 
B)  more intense involvement in fewer supply chain activities. 
C)  involvement in strategic planning and mergers and acquisitions. 
D)  a clear delineation between supply and accounting. 
E)  merging of supply and accounts payable. 
A)  fewer activities under the management or control of supply. 
B)  more intense involvement in fewer supply chain activities. 
C)  involvement in strategic planning and mergers and acquisitions. 
D)  a clear delineation between supply and accounting. 
E)  merging of supply and accounts payable.

Question 6

In manufacturing organizations, the dollars spent with suppliers fall into what range as a percent of revenues?

Accepted Answer

A)  65 to 75. 
B)  50 to 80. 
C)  45 to 75. 
D)  30 to 60. 
E)  25 to 35. 
A)  65 to 75. 
B)  50 to 80. 
C)  45 to 75. 
D)  30 to 60. 
E)  25 to 35.

Question 7

The return on assets effect ROA) quantifies and measures:

Accepted Answer

A)  the indirect contribution of supply management to profitability. 
B)  any increase in sales that occurs at a greater rate than the cost of assets. 
C)  the impact of supply actions on inventory and the balance sheet. 
D)  reductions in the allocations to the operating budget of the supply department. 
E)  the effect on profitability of reduced spend compared to a sales increase. 
A)  the indirect contribution of supply management to profitability. 
B)  any increase in sales that occurs at a greater rate than the cost of assets. 
C)  the impact of supply actions on inventory and the balance sheet. 
D)  reductions in the allocations to the operating budget of the supply department. 
E)  the effect on profitability of reduced spend compared to a sales increase.

Question 8

Supply has the potential to contribute to:

Accepted Answer

A)  cost management, profitability, return on assets, competitive position and corporate social policy. 
B)  cost management, profitability, return on assets and competitive position. 
C)  cost management, profitability and return on assets. 
D)  cost management and profitability. 
E)  cost management. 
A)  cost management, profitability, return on assets, competitive position and corporate social policy. 
B)  cost management, profitability, return on assets and competitive position. 
C)  cost management, profitability and return on assets. 
D)  cost management and profitability. 
E)  cost management.

Question 9

One of the most important steps in achieving the potential of the supply function in a company is elevation of the chief supply officer to executive status.

Accepted Answer

A) True 
 B)False

Question 10

The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer is called:

Accepted Answer

A)  strategic sourcing. 
B)  value management. 
C)  customer relationship management. 
D)  supply chain management. 
E)  strategic process management. 
A)  strategic sourcing. 
B)  value management. 
C)  customer relationship management. 
D)  supply chain management. 
E)  strategic process management.

Question 11

Sustainability initiatives include the effective and efficient capture and disposition of downstream products from customers and the reduction of the impact of the organization's supply chains on the natural environment

Accepted Answer

A) True 
 B)False

Question 12

As supply chains have become more global, the risk of supply disruptions has:

Accepted Answer

A)  decreased because risk is spread among suppliers all over the world. 
B)  decreased because there are also more international laws and treaties. 
C)  stayed the same because the issues are similar wherever suppliers are located. 
D)  increased because other countries lack the business ethics of the U.S. 
E)  increased because of financial and exchange rate fluctuations. 
A)  decreased because risk is spread among suppliers all over the world. 
B)  decreased because there are also more international laws and treaties. 
C)  stayed the same because the issues are similar wherever suppliers are located. 
D)  increased because other countries lack the business ethics of the U.S. 
E)  increased because of financial and exchange rate fluctuations.

Question 13

Supply management may indirectly contribute to the organization's competitive advantage by:

Accepted Answer

A)  the profit-leverage effect. 
B)  the return on assets effect. 
C)  reducing annual spend. 
D)  improving process efficiency. 
E)  all of the above. 
A)  the profit-leverage effect. 
B)  the return on assets effect. 
C)  reducing annual spend. 
D)  improving process efficiency. 
E)  all of the above.

Question 14

Since labor and other costs greatly exceed outlays for purchased materials and services in most service organizations, supply is of little consequence in most service organizations.

Accepted Answer

A) True 
 B)False

Question 15

Performance of the supply management function can be viewed in two contexts:

Accepted Answer

A)  operational and trouble-avoidance. 
B)  operational and strategic. 
C)  operational and transactional. 
D)  strategic and opportunistic. 
E)  strategic and future-oriented. 
A)  operational and trouble-avoidance. 
B)  operational and strategic. 
C)  operational and transactional. 
D)  strategic and opportunistic. 
E)  strategic and future-oriented.

Question 16

Supply makes a limited contribution to organizational risk management since most supply decisions have few downside risks that might impact the organization's strategy.

Accepted Answer

A) True 
 B)False

Question 17

Reductions in inventory investment primarily come from getting users to reduce their demand for inventoried items.

Accepted Answer

A) True 
 B)False

Question 18

Terms such as purchasing, procurement, supply, supply chain and logistics do not have standard definitions that are widely used across sectors and industries.

Accepted Answer

A) True 
 B)False

Question 19

The true test of supply's contribution is when the chief executive officer and the management team recognize the value of supply and suppliers in reducing prices paid for goods and services.

Accepted Answer

A) True 
 B)False

The total purchase sales ratio the percentage of sales dollars paid out to suppliers) varies little from industry to industry.

Supply management has evolved from a transaction-based, tactical function to a process-oriented, strategic function.

The profit-leverage effect of supply savings means that:

The increase in outsourcing has resulted in an increase in the percentage of revenue paid out to suppliers.

Evidence of the growth and influence of supply management in an organization includes:

In manufacturing organizations, the dollars spent with suppliers fall into what range as a percent of revenues?

The return on assets effect ROA) quantifies and measures:

Supply has the potential to contribute to:

One of the most important steps in achieving the potential of the supply function in a company is elevation of the chief supply officer to executive status.

The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer is called:

Sustainability initiatives include the effective and efficient capture and disposition of downstream products from customers and the reduction of the impact of the organization's supply chains on the natural environment

As supply chains have become more global, the risk of supply disruptions has:

Supply management may indirectly contribute to the organization's competitive advantage by:

Since labor and other costs greatly exceed outlays for purchased materials and services in most service organizations, supply is of little consequence in most service organizations.

Performance of the supply management function can be viewed in two contexts:

Supply makes a limited contribution to organizational risk management since most supply decisions have few downside risks that might impact the organization's strategy.

Reductions in inventory investment primarily come from getting users to reduce their demand for inventoried items.

Terms such as purchasing, procurement, supply, supply chain and logistics do not have standard definitions that are widely used across sectors and industries.

The true test of supply's contribution is when the chief executive officer and the management team recognize the value of supply and suppliers in reducing prices paid for goods and services.

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 Selection

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 1: Purchasing and Supply Management

The total purchase sales ratio the percentage of sales dollars paid out to suppliers) varies little from industry to industry.

Supply management has evolved from a transaction-based, tactical function to a process-oriented, strategic function.

The profit-leverage effect of supply savings means that:

The increase in outsourcing has resulted in an increase in the percentage of revenue paid out to suppliers.

Evidence of the growth and influence of supply management in an organization includes:

In manufacturing organizations, the dollars spent with suppliers fall into what range as a percent of revenues?

The return on assets effect ROA) quantifies and measures:

Supply has the potential to contribute to:

One of the most important steps in achieving the potential of the supply function in a company is elevation of the chief supply officer to executive status.

The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer is called:

Sustainability initiatives include the effective and efficient capture and disposition of downstream products from customers and the reduction of the impact of the organization's supply chains on the natural environment

As supply chains have become more global, the risk of supply disruptions has:

Supply management may indirectly contribute to the organization's competitive advantage by:

Since labor and other costs greatly exceed outlays for purchased materials and services in most service organizations, supply is of little consequence in most service organizations.

Performance of the supply management function can be viewed in two contexts:

Supply makes a limited contribution to organizational risk management since most supply decisions have few downside risks that might impact the organization's strategy.

Reductions in inventory investment primarily come from getting users to reduce their demand for inventoried items.

Terms such as purchasing, procurement, supply, supply chain and logistics do not have standard definitions that are widely used across sectors and industries.

The true test of supply's contribution is when the chief executive officer and the management team recognize the value of supply and suppliers in reducing prices paid for goods and services.

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 Selection

Supplier Evaluation and Supplier Relations

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters