Question 1

A national source is defined as a firm headquartered outside of the buying firm's country.

Accepted Answer

A) True 
 B)False

Question 2

Conflicts of interest exist when supply managers must divide their loyalty between the firm that employs them and another firm that is under consideration as a source of supply.Such conflicts are okay as long as the "Don't ask,don't tell" principle is in effect.

Accepted Answer

A) True 
 B)False

Question 3

Only suppliers that are considered the "best of the best" do not require investment on the part of the buying firm to realize the full benefit of the collaborative relationship.

Accepted Answer

A) True 
 B)False

Question 4

The strategic sourcing plan should be developed in a collaborative environment that includes all relevant functional area representatives and supply chain members.

Accepted Answer

A) True 
 B)False

Question 5

Two benefits of supply base reduction cited by John Deere are: increased leverage with suppliers and better focus and supplier integration in product development.Increased leverage is also due to the increased involvement with the suppliers that builds goodwill and trust.

Accepted Answer

A) True 
 B)False

Question 6

Development of suppliers is one of the greatest untapped frontiers in supply chain management.Even suppliers recognized as the "best of the best" require investment on the part of the buying firm to realize the full benefit of the collaborative relationship.

Accepted Answer

A) True 
 B)False

Question 7

The weighted factor analysis is a useful tool to use for

Accepted Answer

A)  Qualifying supplies prior to solicitation 
B)  Planning negotiations 
C)  Final selection of a supplier 
D)  Deciding reverse auction criteria 
E)  Deciding rules for bidding 
A)  Qualifying supplies prior to solicitation 
B)  Planning negotiations 
C)  Final selection of a supplier 
D)  Deciding reverse auction criteria 
E)  Deciding rules for bidding

Question 8

Conflicts of interest exist when supply managers must divide their loyalty between the firm that employs them and another firm.Such conflicts always should be avoided in all source selection decisions.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a typical advantage of local buying?

Accepted Answer

A)  Closer cooperation between buyer and seller is possible 
B)  Shortages are less likely 
C)  Delivery dates are more certain 
D)  Lower prices can result from consolidated transportation and insurance 
E)  Shorter lead times reduce inventory 
A)  Closer cooperation between buyer and seller is possible 
B)  Shortages are less likely 
C)  Delivery dates are more certain 
D)  Lower prices can result from consolidated transportation and insurance 
E)  Shorter lead times reduce inventory

Question 10

Many forces motivate a buying firm to ensure that MWBE businesses receive a share of the firm's business.Which of the following is not one of those forces?

Accepted Answer

A)  Federal and state legislation 
B)  Pressure from non-MWBE suppliers 
C)  Set-aside quotas in government appropriations 
D)  Actions of regulatory bodies 
E)  Firm's "corporate social consciousness" 
A)  Federal and state legislation 
B)  Pressure from non-MWBE suppliers 
C)  Set-aside quotas in government appropriations 
D)  Actions of regulatory bodies 
E)  Firm's "corporate social consciousness"

Question 11

In the discovery stage of the strategic sourcing plan given in the textbook,several analyses were presented.Which of the following was not one of those analyses?

Accepted Answer

A)  Capacity Capability Analysis 
B)  Service Capability Analysis 
C)  Flexibility Capability Analysis 
D)  Corporate Accountability Analysis 
E)  Information Technology Capability Analysis 
A)  Capacity Capability Analysis 
B)  Service Capability Analysis 
C)  Flexibility Capability Analysis 
D)  Corporate Accountability Analysis 
E)  Information Technology Capability Analysis

Question 12

Two-Step Bidding/Negotiation is used in situations where inadequate specifications preclude the initial use of traditional competitive bidding.

Accepted Answer

A) True 
 B)False

Question 13

Solicitation of either an IFB or RFP should include all of the following except one criterion.Which criterion should not be included?

Accepted Answer

A)  Information on quantities 
B)  Political leanings of the supplier 
C)  Delivery schedules 
D)  Special terms and conditions 
E)  Standard terms and conditions 
A)  Information on quantities 
B)  Political leanings of the supplier 
C)  Delivery schedules 
D)  Special terms and conditions 
E)  Standard terms and conditions

Question 14

Which of the following is not typically true of dual sourcing using the "70-30" approach?

Accepted Answer

A)  70 percent of the volume is awarded to one supplier, 30 percent to a second supplier 
B)  Economies of scale are obtained from the "big supplier" 
C)  Frequently used when time to market is critical 
D)  The "little supplier" provides competition and a backup in case of emergencies 
E)  When the "big supplier" fails to perform the percentages may be reversed by the buyer 
A)  70 percent of the volume is awarded to one supplier, 30 percent to a second supplier 
B)  Economies of scale are obtained from the "big supplier" 
C)  Frequently used when time to market is critical 
D)  The "little supplier" provides competition and a backup in case of emergencies 
E)  When the "big supplier" fails to perform the percentages may be reversed by the buyer

Question 15

Early supply management involvement is an approach in supply management to bring the expertise and collaborative synergy of suppliers into the design process

Accepted Answer

A) True 
 B)False

Question 16

The bidding process is far more likely than negotiation to lead to a complete understanding of all issues of the procurement.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not true about reciprocity?

Accepted Answer

A)  Reciprocity is a "fact of life" in business and should be embraced 
B)  Reciprocity exists when supply managers give preference to suppliers that are also customers 
C)  It is entirely legal to buy from one's customers at fair market prices, without economic threat, and without the intent of restricting competition 
D)  Reciprocity can become illegal when the activity restricts competition and trade 
E)  Reciprocity does not follow sound principles of buying and selling 
A)  Reciprocity is a "fact of life" in business and should be embraced 
B)  Reciprocity exists when supply managers give preference to suppliers that are also customers 
C)  It is entirely legal to buy from one's customers at fair market prices, without economic threat, and without the intent of restricting competition 
D)  Reciprocity can become illegal when the activity restricts competition and trade 
E)  Reciprocity does not follow sound principles of buying and selling

Question 18

Two benefits of supply base reduction cited by John Deere are: reduced need to leverage suppliers and lower prices from suppliers.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a typical category where the opportunity to reduce costs is increased through early supplier involvement in design?

Accepted Answer

A)  Packaging costs may decrease through better design or planning 
B)  Transportation costs may decrease through better design or planning 
C)  Order quantities can be increased due to simpler, less expensive designs 
D)  Redesigns may be reduced, thereby saving money 
E)  Assembly changes may be reduced, thereby saving money 
A)  Packaging costs may decrease through better design or planning 
B)  Transportation costs may decrease through better design or planning 
C)  Order quantities can be increased due to simpler, less expensive designs 
D)  Redesigns may be reduced, thereby saving money 
E)  Assembly changes may be reduced, thereby saving money

Question 20

Which of the following is a typical consideration in favor of multiple sourcing?

Accepted Answer

A)  Special tooling is required 
B)  A single source supplier will have an improved commitment 
C)  Avoid complacency on the part of a supplier 
D)  Improved interdependency and risk sharing result from single sourcing 
E)  Time to market is critical 
A)  Special tooling is required 
B)  A single source supplier will have an improved commitment 
C)  Avoid complacency on the part of a supplier 
D)  Improved interdependency and risk sharing result from single sourcing 
E)  Time to market is critical

Exam 11: Sourcing

A national source is defined as a firm headquartered outside of the buying firm's country.

Conflicts of interest exist when supply managers must divide their loyalty between the firm that employs them and another firm that is under consideration as a source of supply.Such conflicts are okay as long as the "Don't ask,don't tell" principle is in effect.

Only suppliers that are considered the "best of the best" do not require investment on the part of the buying firm to realize the full benefit of the collaborative relationship.

The strategic sourcing plan should be developed in a collaborative environment that includes all relevant functional area representatives and supply chain members.

Two benefits of supply base reduction cited by John Deere are: increased leverage with suppliers and better focus and supplier integration in product development.Increased leverage is also due to the increased involvement with the suppliers that builds goodwill and trust.

Development of suppliers is one of the greatest untapped frontiers in supply chain management.Even suppliers recognized as the "best of the best" require investment on the part of the buying firm to realize the full benefit of the collaborative relationship.

The weighted factor analysis is a useful tool to use for

Conflicts of interest exist when supply managers must divide their loyalty between the firm that employs them and another firm.Such conflicts always should be avoided in all source selection decisions.

Which of the following is not a typical advantage of local buying?

Many forces motivate a buying firm to ensure that MWBE businesses receive a share of the firm's business.Which of the following is not one of those forces?

In the discovery stage of the strategic sourcing plan given in the textbook,several analyses were presented.Which of the following was not one of those analyses?

Two-Step Bidding/Negotiation is used in situations where inadequate specifications preclude the initial use of traditional competitive bidding.

Solicitation of either an IFB or RFP should include all of the following except one criterion.Which criterion should not be included?

Which of the following is not typically true of dual sourcing using the "70-30" approach?

Early supply management involvement is an approach in supply management to bring the expertise and collaborative synergy of suppliers into the design process

The bidding process is far more likely than negotiation to lead to a complete understanding of all issues of the procurement.

Which of the following is not true about reciprocity?

Two benefits of supply base reduction cited by John Deere are: reduced need to leverage suppliers and lower prices from suppliers.

Which of the following is not a typical category where the opportunity to reduce costs is increased through early supplier involvement in design?

Which of the following is a typical consideration in favor of multiple sourcing?

The Progression to Professional Supply Management

Organizational Issues

Supply Management: an Organization Spanning Activity

A Portfolio of Relationships

New Product Development

Purchasing Descriptions and Specifications

Managing for Quality

The Procurement of Equipment

Purchasing Services

Outsourcing

Global Supply Management

Total Cost of Ownership

Price and Cost Analysis

Methods of Compensation

Negotiation

Contract Formation and Legal Issues

Contact and Relationship Management

Ethics and Social Responsibilities

Production and Inventory Control

Demand Management and Logistics

Implementing Value Network Management

Filters