Exam 19: Performance Measurement and Evaluation

Historical data provide substantial insight about the performance capabilities of competitors or other leading firms.

Purchase price versus market index measures are least appropriate for market-based products where pricing is primarily a function of supply and demand.

Which of the following is one of the reasons for measuring performance?

The problem with measuring behavior is that there is no guarantee the behavior will lead to desired results.

The most common method of establishing a budget uses the current administrative budget as a starting point.

Supply managers should emphasize purchasing efficiency over purchasing effectiveness as a strict measure of performance.

Joint participation means that the personnel responsible for each measure participate in developing the measure or establishing the measure's performance objective.

Having too little data is the most common problem an organization has with its measurement system.

The most common price performance measures include actual purchase price versus planned purchase price comparisons, actual purchase price(s) compared to a market index, comparisons of actual-to-actual purchase prices for individual and aggregated items between operating plants or divisions within an organization, and target prices achieved.

A/An _____ would typically link to a contractual agreement whereby, for new technologies, the buying firm may get insight, some period of time before new technology developments are shared with other organizations.

A common misconception is that a performance evaluation system should not measure every activity.

Measuring and evaluating performance historically has had certain problems and limitations.

A serious problem in measurement is that the data that managers pay attention to are often the wrong data.

Each location of an organization must use the same performance objectives or performance criteria.

The original premise of the balanced scorecard was that a total reliance on financial measures was leading organizations to make poor decisions.

Which of the following is not one of the benefits of benchmarking?

A/An _____ demonstrates the impact of purchasing and supply strategies and actions on revenues of the firm.

According to Kaplan and Norton, a balanced scorecard includes all of the following key performance measurement areas except the _____.

Measurement is virtually free.

With the current budget plus adjustment approach, the administrative budget for purchasing is a percentage of another measure that reflects purchasing's workload.