Deck 12: Project Supply Chain Management

Question 1

Logistics,in contrast to supply chain management,is the work required to move and position inventory throughout a supply chain.

Answer 1

True

Question 2

Extensive supplier evaluation approaches such as surveys,facility visits and financial analysis should be applied to first-tier suppliers only.

Answer 2

False

Question 3

One of the important factors that should influence the selection of contract type is the degree of risk to be assumed by both the seller and the buyer.

Answer 3

True

Question 4

Effective project partnerships generally require shared responsibilities,shared resources,shared information,shared rights and shared risks between suppliers and customers.

Question 5

Supply chain operations require managerial processes that span across functional areas within individual organizations.

Question 6

The extent to which a project relies upon internal sources for materials and services varies from one project to another and from one organization to another.

Question 7

Supply chain management focuses exclusively upon the parties directly involved in providing supplies to the project team.

Question 8

Outputs of Plan Procurements include procurement documents and evaluation criteria that define how the client company will evaluate and rank proposals received from bidders.

Question 9

Sometimes firms develop a qualified sellers list and only allow those companies on the list to submit a proposal on the upcoming project.

Question 10

Buying from an outside supplier to meet project needs is generally frowned upon because it invariably proves to be more expensive than obtaining materials and services internally.

Question 11

A project organization can serve as either the buyer or the seller in a project related contract.

Question 12

Traditional project procurement was characterized by a win-lose attitude,whereas contemporary project partnering fosters an equal partner attitude.

Question 13

Partnering seeks to recast relations between actors in projects by promoting the use of collaborative,more open relationships.

Question 14

Traditional project procurement was characterized by relatively few contract claims,whereas contemporary project partnering has resulted in a significant increase in the frequency of contract claims.

Question 15

Fixed price contracts provide low risk for the seller,since the buyer will pay a fixed price,regardless of how much the project actually costs the seller.

Question 16

Among the disadvantages associated with outsourcing is the potential loss of special skills for doing the outsourced activities.

Question 17

In many cases,the proposal prepared by the vendor actually becomes a part of the final contract.

Question 18

Contract incentives are often used when the buyer wants to maximize some aspect of performance.

Question 19

A contract is a unilateral document that binds a seller to provide specified products and services under terms agreeable to the buyer.

Question 20

On complex projects,despite the importance of factors such as technical capability,managerial capability and previous experience;the ultimate driving factor is almost always the price of the proposal.

Question 21

Which of the following terms describes a method for transforming contractual arrangements into a cohesive project team with a single set of goals and established dispute resolution procedures?

A) a contract unification plan
B) partnering
C) arbitration
D) conflict resolution

Question 22

Which of the following types of contracts involves payment to the seller for the seller's actual costs plus a fee typically representing the seller's profit?

A) fixed-price contract
B) cost-reimbursable contract
C) equitable adjustment contract
D) direct cost contract

Question 23

All of the following factors are commonly used to assess potential suppliers pursuant to a source selection decision EXCEPT:

A) supply quality
B) personal relationships with senior management
C) inbound transportation cost
D) replenishment lead time

Question 24

Which of the following factors should be considered when a project team evaluates a "make or buy" decision to procure services?

A) prevailing public opinion regarding the economic impact of outsourcing
B) only the direct costs associated with the decision, excluding consideration of indirect costs
C) advantages and disadvantages of outsourcing in terms of performance control
D) project manager's preference

Question 25

All of the following accurately describe the features and characteristics of a contract EXCEPT:

A) A contract binds both the seller and the buyer.
B) A contract obligates the seller to provide a specified product or service.
C) A contract obligates the buyer to pay for a specified product or service.
D) The project organization is always a buyer in a contract arrangement

Question 26

All of the following items are generally considered when selecting the right type of contract EXCEPT:

A) extent of price competition
B) overall degree of cost and schedule risk
C) urgency of requirements
D) project organization's accounting system

Question 27

A description of the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products,services or results is known as:

A) the procurement statement of work.
B) the contract clauses and special provisions
C) the supply invoice
D) the purchase order

Question 28

The procurement management plan:

A) describes how procurement processes will be managed.
B) describes how supply chain partners will be managed.
C) describes how the procurement division will be managed.
D) describes how sellers will be audited

Question 29

Information is a key ingredient at each stage of the project supply chain,as well as within each phase of supply chain decision making.

Question 30

All of the following statements accurately describe supply chain management EXCEPT:

A) It is a closed-loop system solely within the project organization's boundaries
B) It spans across suppliers, resellers, project organizations and consumers.
C) It addresses the flow of products, information and funds.
D) It is a system approach to managing the entire flow of physical products.

Question 31

Which party to a contract absorbs the preponderance of cost risk when a Firm-Fixed-Price (FFP)contract is used?

A) the seller
B) the buyer
C) the cost risk is equally shared.
D) the insurer

Question 32

All of the following entities are typically included in the supply chain EXCEPT:

A) suppliers
B) public relations
C) consumers
D) project team

Question 33

Evaluations of prospective suppliers by project teams often involve which of the following approaches?

A) third party evaluations
B) facility visits
C) supplier surveys
D) all of these

Question 34

All of the following are performance improvements likely to be realized by projects that make good project sourcing decisions EXCEPT:

A) more efficient procurement transactions
B) better coordinated forecasting and planning with suppliers
C) improved customer satisfaction
D) improved employee benefits

Question 35

Often a project team will start the selection process by establishing a list of potential suppliers. All of the following information sources are frequently used to identify these potential suppliers EXCEPT:

A) supplier catalogs
B) phone directories
C) stakeholder register
D) trade journals

Question 36

Which of the following contract types is most appropriate when costs are NOT well known and the buyer absorbs the cost risk?

A) Firm-Fixed-Price (FFP)
B) Fixed-Price-Incentive-Firm (FPIF)
C) Cost-Plus-Fixed-Fee (CPFF)
D) Time and Material (T&M)

Question 37

Project partnerships offer all of the following advantages to vendors EXCEPT:

A) there is a more dependable stream of work
B) the expected outcome is more clearly stated
C) the buyer gains at the vendor's expense
D) greater potential profit

Question 38

Which of the following is one of the PMBOK's four project procurement management processes?

A) Administer procurements
B) Perform configuration management
C) Conduct contract reviews
D) Perform value engineering

Question 39

The PMBOK process of documenting project purchasing decisions,specifying the approach and identifying potential sellers is known as:

A) Define supply chain.
B) Plan procurements.
C) Schedule procurements.
D) Negotiate contracts

Question 40

Supply chains use a combination of modes of transportation including: air,rail,water,pipeline and trucks.

Question 41

Compare and contrast traditional project procurement management with the more contemporary approach - project partnering. What are the advantages associated with project partnering?

Question 42

Project procurement management includes six processes. Identify and briefly describe the first five processes that constitute project procurement management.

Question 43

Project partnerships offer which of the following advantages to both clients and vendors?

A) shared motivation
B) potential of lower cost for client
C) potential of greater profit for vendor
D) opportunity for vendor to prove oneself

Question 44

Contract types are often associated with two broad categories: fixed-price contracts and cost-reimbursable contracts. Briefly identify the factors to consider when determining which type is most appropriate for a planned contract.

Question 45

Project managers must frequently decide whether to obtain needed products and services from internal sources or from external sources. This decision is often referred to as the "make or buy" decision. Briefly identify and explain at least three reasons that support the decision to "make" the products and at least three reasons that support the decision to "buy" the products.