Question 1

Briefly describe the objective of spend analysis and the general requirements for accomplishing it.

Accepted Answer

Spend analysis is the application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement. Spend analysis can be used to answer a wide variety of questions. For example, management might want to know the categories of products or services that make up the bulk of company spending, how much is being spent with various suppliers, and how spending patterns vary across different locations. The primary requirement for accomplishing the analysis is having the necessary data and a means for manipulating it. Because the questions are varied, the analytical tools needed also vary widely. Some companies have software systems used for operations that contain the ability to perform these analyses. Other companies may turn to a spreadsheet package to perform the required analyses.

Question 2

Flingers Inc. reveals the following information in their annual report for FY 2017 $$\begin{array}{l}
\text { Earnings and Expenses }\
\begin{array} { | l | c | } 
\hline \text { Sales } & \$ 10,000,000 \
\hline \text { Cost of goods sold } & \$ 5,000,000 \
\hline \text { Pretaxearnings } & \$ 500,000 \
\hline & \
\hline \text { Selected Balance Sheet Items } & \
\hline \text { Merchandise inventory } & \$ 80,000 \
\hline \text { Total assets } & \$ 2,000,000 \
\hline
\end{array}
\end{array}$$ Every dollar Flingers saves in purchasing has the same impact as what amount of increased sales?

Accepted Answer

A) $10 
B) $14 
C) $17 
D) $20 
A) $10 
B) $14 
C) $17 
D) $20 D

Question 3

The two basic types of purchasing contracts are:

Accepted Answer

A) fixed-price and cost-based. 
B) bid-rigged and cost-plus. 
C) cost-zero and fixed-variable. 
D) fixed-quantity and variable-cost. 
A) fixed-price and cost-based. 
B) bid-rigged and cost-plus. 
C) cost-zero and fixed-variable. 
D) fixed-quantity and variable-cost. A

Question 4

Among the disadvantages of ________ are that different product attributes with varying qualities may be produced which can actually result in reduced supplier loyalty over time.

Accepted Answer

The answer of Among the disadvantages of ________ are that...

Question 5

Which of these factors is most likely to increase the risk of a missed shipment, communication problem, or human error?

Accepted Answer

A) supply base alienation 
B) global outsourcing 
C) multicriteria decision models 
D) electronic data interchange 
A) supply base alienation 
B) global outsourcing 
C) multicriteria decision models 
D) electronic data interchange

Question 6

The ratio of earnings to sales for a given time period is a firm's profit margin.

Accepted Answer

A) True 
 B)False

Question 7

The deans' suite hoped to cut costs and decided to perform a total cost analysis on its vodka supplier. Consumption was currently 6,000 bottles per semester and this was predicted to maintain that level for the next few years. Their current source, Byron's, charged $9.25 per bottle and packed 500 bottles in a crate. The cost to ship the crate was $5. Another potential source of vodkas was Pancho's, who charged $9.20 per bottle but could ship only 100 bottles in a crate. Assume that a partial crate may be purchased. At what annual shipping price per crate from Pancho's would the college face equal total costs?

Accepted Answer

A) $7.00 
B) $6.50 
C) $6.00 
D) $5.50 
A) $7.00 
B) $6.50 
C) $6.00 
D) $5.50

Question 8

This table contains the performance criteria and scores (larger numbers are better)for four potential suppliers to Kramerica Industries. Evaluate the data and identify the BEST source for Kramerica. $$\begin{array} { | l | c | c | c | c | } 
\hline \text { Performance Dimension } & \text { Company A } & \text { Company B } & \text { Company C } & \text { Company D } \
\hline \text { Quality } ( \mathrm { W } = 0.4 ) & 3 & 4 & 2 & 5 \
\hline \text { Cost } ( \mathrm { W } = 0.3 ) & 4 & 3 & 5 & 3 \
\hline \text { Flexibility } ( \mathrm { W } = 0.2 ) & 5 & 3 & 4 & 2 \
\hline \text { Speed } ( \mathrm { W } = 0.1 ) & 2 & 5 & 5 & 4 \
\hline
\end{array}$$

Accepted Answer

A) Company A 
B) Company B 
C) Company C 
D) Company D 
A) Company A 
B) Company B 
C) Company C 
D) Company D

Question 9

Dusty is evaluating three bids to supply fence hardware for the 5 acres of pasture that need to be fenced. Breezy submits a bid of $40 per unit with a defect rate of 3%; Lady's bid is $50 per unit with a defect rate of 0.5%; and Spike's bid is $30 per unit with a defect rate of 5%. If a section of fence fails, it costs an average of $500 in losses and herding costs to round up all of the capybaras (giant rodents from South America - their leather makes fine gloves). Dusty believes it will take 500 units to fence in this pasture configuration; which supplier should win the business?

Accepted Answer

A) Spike 
B) Breezy 
C) Lady 
D) no difference between Breezy and Spike 
A) Spike 
B) Breezy 
C) Lady 
D) no difference between Breezy and Spike

Question 10

Define outsourcing and discuss its advantages and disadvantages.

Accepted Answer

Outsourcing is the use of supply chain p

Question 11

Flingers Inc. reveals the following information in their annual report for FY 2017 $$\begin{array}{l}
\text { Earnings and Expenses }\
\begin{array} { | l | c | } 
\hline \text { Sales } & \$ 10,000,000 \
\hline \text { Cost of goods sold } & \$ 5,000,000 \
\hline \text { Pretaxearnings } & \$ 500,000 \
\hline & \
\hline \text { Selected Balance Sheet Items } & \
\hline \text { Merchandise inventory } & \$ 80,000 \
\hline \text { Total assets } & \$ 2,000,000 \
\hline
\end{array}
\end{array}$$ Upper management plans to cut cost of goods sold by 5% for the coming year but retain the same sales. What will Flingers' profit margin be for 2018

Accepted Answer

A) 5% 
B) 7.5% 
C) 9% 
D) 11% 
A) 5% 
B) 7.5% 
C) 9% 
D) 11%

Question 12

The weighted-point evaluation system allows for a completely objective decision to be made.

Accepted Answer

A) True 
 B)False

Question 13

The ratio of earnings to sales for a given time period is the:

Accepted Answer

A) cost of goods sold. 
B) merchandise inventory. 
C) profit margin. 
D) return on assets. 
A) cost of goods sold. 
B) merchandise inventory. 
C) profit margin. 
D) return on assets.

Question 14

The primary goal of this quadrant is to ensure a continuous supply of products or services found in the:

Accepted Answer

A) leverage quadrant. 
B) bottleneck quadrant. 
C) critical quadrant. 
D) routine quadrant. 
A) leverage quadrant. 
B) bottleneck quadrant. 
C) critical quadrant. 
D) routine quadrant.

Question 15

Perhaps the best way to describe standard items is to use ________ which is a description method that is applicable when the requirements are well understood.

Accepted Answer

descriptio

Question 16

Top executives name ________ as a significant threat to their companies' revenue streams.

Accepted Answer

(supply ch

Question 17

Flingers Inc. reveals the following information in their annual report for FY 2017
 $$\begin{array}{l}
\text { Earnings and Expenses }\
\begin{array} { | l | c | } 
\hline \text { Sales } & \$ 10,000,000 \
\hline \text { Cost of goods sold } & \$ 5,000,000 \
\hline \text { Pretaxearnings } & \$ 500,000 \
\hline & \
\hline \text { Selected Balance Sheet Items } & \
\hline \text { Merchandise inventory } & \$ 80,000 \
\hline \text { Total assets } & \$ 2,000,000 \
\hline
\end{array}
\end{array}$$ They plan to aggressively pursue cost savings in the purchasing area for FY 2018 and expect to lower their cost of goods sold by 8% while maintaining the same level of sales. Calculate Flingers' leverage effect for 2017and their expected leverage effect for 2018. Compare the two results for your leverage effect calculations and provide insight as their relative magnitude.

Accepted Answer

Leverage effect 2017 = @#LAT-DLM&
 = @#LAT-DLM& = $20.00
Lev

Question 18

When compared with single sourcing, multiple sourcing has the advantage of:

Accepted Answer

A) spreading risk. 
B) volume leveraging. 
C) lower transportation costs. 
D) reduced quality variability. 
A) spreading risk. 
B) volume leveraging. 
C) lower transportation costs. 
D) reduced quality variability.

Question 19

The use of supply chain partners to provide products or services is called:

Accepted Answer

A) outsourcing. 
B) insourcing. 
C) offloading. 
D) partnering. 
A) outsourcing. 
B) insourcing. 
C) offloading. 
D) partnering.

Question 20

Dusty is evaluating three bids to supply fence hardware for the 5 acres of pasture that need to be fenced. Breezy submits a bid of $40 per unit with a defect rate of 2%; Lady's bid is $50 per unit with a defect rate of 0.5%; and Spike's bid is $30 per unit with a defect rate of 5%. If a section of fence fails, it costs an average of $500 in losses and herding costs to round up all of the capybaras. Dusty believes it will take 1000 units to fence in this pasture configuration; what is the lowest total cost?

Accepted Answer

A) $47,500 
B) $50,000 
C) $52,500 
D) $55,000 
A) $47,500 
B) $50,000 
C) $52,500 
D) $55,000

Briefly describe the objective of spend analysis and the general requirements for accomplishing it.

The two basic types of purchasing contracts are:

Among the disadvantages of ________ are that different product attributes with varying qualities may be produced which can actually result in reduced supplier loyalty over time.

Which of these factors is most likely to increase the risk of a missed shipment, communication problem, or human error?

The ratio of earnings to sales for a given time period is a firm's profit margin.

Define outsourcing and discuss its advantages and disadvantages.

The weighted-point evaluation system allows for a completely objective decision to be made.

The ratio of earnings to sales for a given time period is the:

The primary goal of this quadrant is to ensure a continuous supply of products or services found in the:

Perhaps the best way to describe standard items is to use ________ which is a description method that is applicable when the requirements are well understood.

Top executives name ________ as a significant threat to their companies' revenue streams.

When compared with single sourcing, multiple sourcing has the advantage of:

The use of supply chain partners to provide products or services is called:

Introduction to Operations and Supply Chain Management

Operations and Supply Chain Strategies

Process Choice and Layout Decisions in Manufacturing and Services

Business Processes

Managing Quality

Managing Capacity

S: Advanced Waiting Line Theory and Simulation Modeling

Logistics

Forecasting

Sales and Operations Planning Aggregate Planning

Managing Inventory Throughout the Supply Chain

Managing Production Across the Supply Chain

S: Supply Chain Information Systems

Jitlean Production

Managing Projects

Developing Products and Services

Filters

Exam 7: Supply Management

Briefly describe the objective of spend analysis and the general requirements for accomplishing it.

The two basic types of purchasing contracts are:

Among the disadvantages of ________ are that different product attributes with varying qualities may be produced which can actually result in reduced supplier loyalty over time.

Which of these factors is most likely to increase the risk of a missed shipment, communication problem, or human error?

The ratio of earnings to sales for a given time period is a firm's profit margin.

Define outsourcing and discuss its advantages and disadvantages.

The weighted-point evaluation system allows for a completely objective decision to be made.

The ratio of earnings to sales for a given time period is the:

The primary goal of this quadrant is to ensure a continuous supply of products or services found in the:

Perhaps the best way to describe standard items is to use ________ which is a description method that is applicable when the requirements are well understood.

Top executives name ________ as a significant threat to their companies' revenue streams.

When compared with single sourcing, multiple sourcing has the advantage of:

The use of supply chain partners to provide products or services is called:

Introduction to Operations and Supply Chain Management

Operations and Supply Chain Strategies

Process Choice and Layout Decisions in Manufacturing and Services

Business Processes

Managing Quality

Managing Capacity

S: Advanced Waiting Line Theory and Simulation Modeling

Logistics

Forecasting

Sales and Operations Planning Aggregate Planning

Managing Inventory Throughout the Supply Chain

Managing Production Across the Supply Chain

S: Supply Chain Information Systems

Jitlean Production

Managing Projects

Developing Products and Services

Filters