Deck 3: Supply Organization

Question 1

Overall,the objectives of supply management focus on:

A)operational and strategic issues.
B)tactical,transactional and daily activities in the organization.
C)price,supply availability,and inventory levels.
D)internal supply processes and relationships with key suppliers.
E)organizational competitive position and profitability.

Answer 1

A

Question 2

A centralized supply structure is designed to:

A)increase the strategic focus of purchasing and supply management.
B)spread purchasing power throughout the buying organization.
C)maximize business unit autonomy.
D)simplify reporting lines.
E)increase the speed of response to internal demand.

Answer 2

A

Question 3

The size and activities of the supply function in a single business unit organization will depend on:

A)the size of the company.
B)the size of the company and the nature of the company's business.
C)the nature of the company's business.
D)the preference of the owner or president of the business.
E)the preference of the supply manager.

Answer 3

B

Question 4

Supply can provide an uninterrupted flow of materials,supplies and services by:

A)holding large inventories.
B)holding small inventories.
C)standardizing capital equipment,materials,MRO and services.
D)holding large inventories and standardizing capital equipment,materials,MRO and services.
E)holding small inventories and standardizing capital equipment,materials,MRO and services.

Question 5

A change from a decentralized supply structure to a centralized one:

A)is solely the decision of the existing chief supply officer.
B)is easily done as long as the CEO mandates the change.
C)typically requires experience and skills not present in the existing structure.
D)requires a consensus among existing supply management professionals.
E)seldom requires new information technology.

Question 6

Direct spend is:

A)typically managed the same as indirect spend.
B)of greater importance in manufacturing companies than in service companies.
C)any input that is intangible.
D)greater in service companies than in manufacturing.
E)usually less of the focus of supply management than indirect spend.

Question 7

Internal business partnerships between supply and other functional areas such as marketing/sales,finance/accounting,operations and engineering are:

A)easily developed because all functional areas share goals and metrics.
B)difficult to develop because supply has little impact on organizational goals.
C)unimportant because one area has no impact on the others.
D)not worth the time it takes to develop them.
E)desirable because of the interdependencies between and among functions.

Question 8

The degree of purchasing centralization is reflected by:

A)the size of the purchasing organization.
B)the number of supply professionals dispersed throughout the organization.
C)the percentage of spend managed or controlled by business units.
D)the percentage of spend managed or controlled by corporate supply.
E)the amount of spend that is outsourced.

Question 9

The ratio of purchased material and services costs compared to total costs or total income has a major influence on:

A)the nature of the products or services acquired.
B)the size of the supply base.
C)the extent to which supply and suppliers can provide competitive advantage.
D)supply's reporting level in the organization.
E)the credentials of the existing supply personnel.

Question 10

High-performing cross-functional supply teams:

A)rely on a sequential process across functions.
B)concentrate most of the work at the front-end of the process.
C)concentrate most of the work at the back-end of the process.
D)are useful for every type and dollar value of purchase.
E)require close supervision by senior management.