Question 1

Discuss finding a vendor,including both sources of information and the primary criteria for selecting a vendor.

Accepted Answer

One way for entrepreneurs to find vendors is to approach established businesses selling similar lines and interview their managers.Other sources include trade associations,trade shows,the local chamber of commerce,and certain publications.The primary criteria for selecting a vendor are quality,price,prompt delivery,service,and assistance.

Question 2

The cost of units is simply the typical costs involved in having units in storage.

Accepted Answer

A) True 
 B)False  False

Question 3

How does the EOQ with usage differ from the standard EOQ? Why is this difference important to the small business owner?

Accepted Answer

The EOQ model assumes that orders are filled instantaneously;that is,fresh inventory arrives all at once.Because that assumption does not hold true for many small manufacturers,it is necessary to consider a variation of the basic EOQ model that allows inventory to be added over a period of time rather than instantaneously.In addition,a manufacturer is likely to be taking items from inventory for use in the assembly process over the same time period.The key feature of this version of the EOQ model is that inventories are used while inventories are being added.

Question 4

The small business owner should concentrate purchases at a single supplier.

Accepted Answer

A) True 
 B)False

Question 5

Selling on consignment means that the small business owner does not purchase the merchandise carried from the supplier (called the consignor).

Accepted Answer

A) True 
 B)False

Question 6

A danger of an excessive investment in inventory for the small business is:

Accepted Answer

A) excessive inventory taxes by local and state government. 
B) minimizing reordering costs. 
C) creating too quick a turnover of inventory. 
D) tying up an excessive amount of the firm's capital. 
A) excessive inventory taxes by local and state government. 
B) minimizing reordering costs. 
C) creating too quick a turnover of inventory. 
D) tying up an excessive amount of the firm's capital.

Question 7

Which of the following statements is correct?

Accepted Answer

A) Supply-chain management includes hiring the qualified HR Director. 
B) Supply-chain management includes all the activities that produce goods and services and delivers them to the customer. 
C) Supply-chain management includes providing quality service. 
D) All of the above 
A) Supply-chain management includes hiring the qualified HR Director. 
B) Supply-chain management includes all the activities that produce goods and services and delivers them to the customer. 
C) Supply-chain management includes providing quality service. 
D) All of the above

Question 8

Newton orders 14 electric staplers for his office supply store from Home Office Suppliers.The contract specifies shipping terms as "F.O.B.Home Office Suppliers." Home Office Suppliers delivers the goods to Zippy Shippers and invoices Newton.The electric staplers never arrive,and Newton refuses to pay Home Office Suppliers.Home Office Suppliers sues Newton for the contract price of the staplers.Who wins?

Accepted Answer

A) Newton,because it wasn't his fault that the staplers never arrived. 
B) Home Office Suppliers,because they were the last ones to touch the goods. 
C) Newton,because in an F.O.B.contract,the risk of loss does not shift to the buyer until the goods are actually delivered to the buyer. 
D) Home Office Suppliers,because in an F.O.B.seller contract,risk of loss shifts to the buyer when the seller delivers the goods to the carrier. 
A) Newton,because it wasn't his fault that the staplers never arrived. 
B) Home Office Suppliers,because they were the last ones to touch the goods. 
C) Newton,because in an F.O.B.contract,the risk of loss does not shift to the buyer until the goods are actually delivered to the buyer. 
D) Home Office Suppliers,because in an F.O.B.seller contract,risk of loss shifts to the buyer when the seller delivers the goods to the carrier.

Question 9

Selling terms are as important to the small business as the actual price of the goods and services being purchased.

Accepted Answer

A) True 
 B)False

Question 10

The advantages of developing close,cooperative relationships with a single supplier outweigh the risks of sole sourcing in most cases.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is correct?

Accepted Answer

A) Benchmarking is the process of calculating carrying cost,EOQ and other inventory management procedures and being able to compare it to others. 
B) Benchmarking is the process of identifying world-class processes or procedures currently being employed and building higher quality standards around these for your firm. 
C) Benchmarking is the when a firm evaluates all its supply chain management for higher quality and price. 
D) All of the above 
A) Benchmarking is the process of calculating carrying cost,EOQ and other inventory management procedures and being able to compare it to others. 
B) Benchmarking is the process of identifying world-class processes or procedures currently being employed and building higher quality standards around these for your firm. 
C) Benchmarking is the when a firm evaluates all its supply chain management for higher quality and price. 
D) All of the above

Question 12

The primary objective of the purchasing function is to:

Accepted Answer

A) ensure an adequate turnover of merchandise. 
B) acquire enough stock to ensure uninterrupted sales or production. 
C) determine the "best" possible price for both supplies and finished products. 
D) maximize carrying and set-up costs for the firm. 
A) ensure an adequate turnover of merchandise. 
B) acquire enough stock to ensure uninterrupted sales or production. 
C) determine the "best" possible price for both supplies and finished products. 
D) maximize carrying and set-up costs for the firm.

Question 13

What does the small business owner give up if he/she doesn't take advantage of a vendor's discount? Demonstrate by calculating the interest rate on a $12,000 invoice that is 3/10 net 30.

Accepted Answer

There is an implicit (opportunity)cost o

Question 14

Explain the philosophy of Total Quality Management,naming the ten things a small business owner should do to successfully implement a TQM program.

Accepted Answer

Under the total quality management (TQM)

Question 15

TQM:

Accepted Answer

A) instills the philosophy of 100% inspection of all products. 
B) provides a "finish line" for the race for quality. 
C) avoids placing blame and focuses on fixing mistakes. 
D) makes middle managers responsible for product quality. 
A) instills the philosophy of 100% inspection of all products. 
B) provides a "finish line" for the race for quality. 
C) avoids placing blame and focuses on fixing mistakes. 
D) makes middle managers responsible for product quality.

Question 16

Critical to TQM is:

Accepted Answer

A) management competence. 
B) understanding the product. 
C) continual improvement. 
D) knowing your competition. 
A) management competence. 
B) understanding the product. 
C) continual improvement. 
D) knowing your competition.

Question 17

In today's competitive marketplace,an entrepreneur should not expect that every vendor be able to demonstrate that they operate a continuous improvement process.

Accepted Answer

A) True 
 B)False

Question 18

The vendor certification process assumes:

Accepted Answer

A) all vendors are charging the same prices. 
B) the use of a cross-functional team to conduct the evaluation. 
C) the business owner has detailed knowledge of the vendors. 
D) vendors are publicly owned so information can be gathered on each of them. 
A) all vendors are charging the same prices. 
B) the use of a cross-functional team to conduct the evaluation. 
C) the business owner has detailed knowledge of the vendors. 
D) vendors are publicly owned so information can be gathered on each of them.

Question 19

It is better to maintain too little rather than too much inventory because there are significant storage costs for excess inventory,but few if any costs associated with understocking inventory.

Accepted Answer

A) True 
 B)False

Question 20

The formula for calculating safety stock is: safety stock = SLF × SDL.

Accepted Answer

A) True 
 B)False

Exam 17: Supply Chain Management

Discuss finding a vendor,including both sources of information and the primary criteria for selecting a vendor.

The cost of units is simply the typical costs involved in having units in storage.

How does the EOQ with usage differ from the standard EOQ? Why is this difference important to the small business owner?

The small business owner should concentrate purchases at a single supplier.

Selling on consignment means that the small business owner does not purchase the merchandise carried from the supplier (called the consignor).

A danger of an excessive investment in inventory for the small business is:

Which of the following statements is correct?

Selling terms are as important to the small business as the actual price of the goods and services being purchased.

The advantages of developing close,cooperative relationships with a single supplier outweigh the risks of sole sourcing in most cases.

Which of the following statements is correct?

The primary objective of the purchasing function is to:

What does the small business owner give up if he/she doesn't take advantage of a vendor's discount? Demonstrate by calculating the interest rate on a $12,000 invoice that is 3/10 net 30.

Explain the philosophy of Total Quality Management,naming the ten things a small business owner should do to successfully implement a TQM program.

TQM:

Critical to TQM is:

In today's competitive marketplace,an entrepreneur should not expect that every vendor be able to demonstrate that they operate a continuous improvement process.

The vendor certification process assumes:

It is better to maintain too little rather than too much inventory because there are significant storage costs for excess inventory,but few if any costs associated with understocking inventory.

The formula for calculating safety stock is: safety stock = SLF × SDL.

Entrepreneurs: the Driving Force Behind Small Business

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Creating a Solid Financial Plan

Managing Cash Flow

Building a Guerrilla Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

Ethics and Social Responsibility: Doing the Right Thing

The Legal Environment: Business Law and Government Regulation

Filters