Deck 4: Ethical and Sustainable Sourcing

Question 1

According to the text,driving your suppliers to offer the lowest possible prices,which in turn will lower your cost of goods sold,could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components.

Answer 1

True

Question 2

A 4PL,commonly referred to as a lead logistics provider,is a trucking company that also provides tracking services.

Answer 2

False

Question 3

Companies that lack internal expertise in a specific functional area would likely consider insourcing.

Answer 3

False

Question 4

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base.

Question 5

The average annual Purchase spend as a percentage of sales has been declining over the years.

Question 6

Manufacturers typically have very little influence over second and third tier suppliers when compared to the influence they hold over first tier suppliers.

Question 7

The influence of corporate sourcing decisions interacts with internal design,production,finance,marketing,and accounting.

Question 8

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT:

A) Global population growth
B) Increasing environmental awareness
C) Legislation requiring corporate ethical and sustainable sourcing
D) Declining worldwide levels of natural resources

Question 9

Developing a collaborative negotiation infrastructure include four steps: building a preparation process,develop a negotiation database.Design a negotiation launch process,and institute a feedback mechanism.

Question 10

Generally speaking,there are two approaches to deciding whether or not an action is ethical,utilitarianism and rights and duties.

Question 11

Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.

Question 12

According to the textbook,Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices.

Question 13

Retail items,which would likely be found at a store like Target or Wal-Mart,like lamps,blankets,microwave ovens,and candy bars would be classified as functional products.

Question 14

While a manufacturer may have substantial influence over its first tier suppliers,their influence over second and third tier suppliers is typically much higher.

Question 15

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers,it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.

Question 16

While paperless transactions are now possible through e-procurement and Web-based services,these would NOT be considered sustainable business practices.

Question 17

Purchasing departments can be seen as a primary designer and facilitator of important inward- and outward-facing sourcing policies.

Question 18

Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements,additional purchasing contracts,or contract extensions on existing contracts.

Question 19

Product parts,processes,and product assembly should all be designed by the manufacturing firm to assure a single-minded approach that the suppliers can follow.Supplier involvement in these design phases is considered counterproductive.

Question 20

Benchmarking is the practice of copying what other businesses do best.

Question 21

Which of the following is TRUE?

A) VMI stands for Vertically Managed Inventory
B) 3PL stands for Third Party Leverage
C) VMI stands for Vendor-Managed Inventory
D) 3PL stands for Three Point Logistics

Question 22

The inventory level where suppliers replenish their customer's inventory with a predetermined order quantity is called the:

A) Channel Equity Level
B) Reorder point
C) Bill Back
D) MRO point

Question 23

An outsourcing program can result in all of the following positive outcomes,except:

A) Reducing staffing levels
B) Decreased need for supplier management
C) Cost reduction
D) Gains in manufacturing flexibility

Question 24

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework?

A) Classify supplier items as either innovative or functional
B) Define the goals of the supply chain and check for consistency with products and firm strategy
C) Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development
D) Identify and evaluate the capabilities of suppliers and then identify areas which could be improved

Question 25

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as:

A) Ethical souring
B) Functional sourcing
C) Strategic sourcing
D) Hybrid Sourcing

Question 26

The application of ethical principles to business situations can be referred to as:

A) Business ethics
B) Social responsibility
C) Ethical Sourcing
D) Strategic Sourcing

Question 27

Which of the following is FALSE?

A) The use of 3PL's has been increasing as companies seek more effective supply chain strategies.
B) VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items
C) The use of 3PL providers allows companies to gain competitive advantages without having to gain the required knowledge through firsthand experience.
D) VMI allows suppliers to manage their customers' inventory provided they have the capability to see inventory levels in real time

Question 28

According to the EcoMarkets survey,which surveys over 6000 private and public buyers,the most popular aspect of green sourcing is:

A) Recycling
B) Material reuse
C) Energy conservation
D) Packaging reuse

Question 29

One of the most value enhancing activities performed by a supplier,for a key customer,which minimizes carrying costs and can avoid stockouts:

A) Early supplier involvement scheduling
B) Vendor managed inventory
C) Strategic inventory planning
D) Purchase spend reduction forecasting

Question 30

Which of the following would most likely be considered a functional product?

A) PDA - Personal Digital Assistant
B) HDTV - High Definition Televisions
C) DVD recorders
D) Disposable Camera

Question 31

Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers?

A) Lower levels of quality from their suppliers
B) Lower levels of service from their suppliers
C) Deteriorating buyer-supplier relationships
D) All of these

Question 32

Wal-mart is the driving force behind a system of measurement intended to influence how products are made and purchased in the future.This system of measurement is the:

A) Greenstream
B) ISO 17000
C) Retail carbon footprint
D) Global sustainability index

Question 33

The purchasing managers at Sunnydale Corporation decide to intentionally increase purchases from small,women-owned suppliers.This decision can be considered:

A) Illegal
B) Unethical
C) Ethical Sourcing
D) Utilitarianism

Question 34

The management of the firm's external resources through identification and selection of suppliers,management of supplier relationships,and monitoring and rewarding supplier performance in an effort to support the long-term goals of the organization is called:

A) Buyer-supplier integration
B) Acceptance sampling
C) Procurement rationalization
D) Strategic sourcing

Question 35

The textbook outlined a Supply Chain Ethical and Sustainability Sourcing Strategy Framework.How many steps are in this framework?

A) 3
B) 5
C) 6
D) 10

Question 36

Variations of outsourcing include all of the following EXCEPT: (C; 114)

A) Co-sourcing
B) Selective sourcing
C) Front sourcing
D) Insourcing

Question 37

Harold's Fish Shop decides to reduce its purchases from poorly performing fish suppliers and focus future orders with suppliers that have been top-performing in the past.This is an example of:

A) Supply base rationalization
B) Supplier development
C) Top-tier supplier selection
D) Selective sourcing

Question 38

The Ethical Trading Initiative (ETI)does NOT include which of the following:

A) Children under 13 shall not be employed
B) Working hours are not excessive
C) Regular employment is provided
D) Freedom of association and the right to collective bargaining are respected

Question 39

Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria?

A) Allows firm to screen out poor performing suppliers in its present supplier base.
B) Allows firm to screen out undesirable suppliers that they may be considering for future purchases.
C) Allows firm and its suppliers to develop a better corporate relationship
D) All of these

Question 40

The following term refers to an act that creates the greatest good for the greatest number of people:

A) Rights and duties
B) Corporate responsibility
C) Utilitarianism
D) Social sustainability

Question 41

Which of the following can be used as a punishment for suppliers that perform poorly?

A) Elimination of future business with the focal firm
B) Downgrade the supplier's status
C) Billback penalty
D) All of these

Question 42

According to the textbook,collaborative relationships place a relatively lower importance rating on which of the following competitive priorities:

A) Speed of Delivery
B) Cost
C) Product Quality
D) Frequency of deliveries

Question 43

What does 3PL stand for?
What do 3PLs offer a company?
Provide three examples of what a 3PL might do for a client.

Question 44

Sustainable sourcing is a rather common practice among firms in many industries.What are THREE possible benefits companies practicing sustainable sourcing seek to achieve:

Question 45

Provide TWO key differences between products that can be classified as functional vs.innovative.Also after providing your list of two,provide an example of a functional product and an example of an innovative product.

Question 46

Benchmarking is:

A) A system of performance metrics that seeks to motivate suppliers to perform better.
B) A practice where companies attempt to learn and apply the best practices of other companies.
C) A system of marking defective inbound inventory so it can quickly be identified for return to the supplier.
D) A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

Question 47

Home Depot is a retail leader in selling home improvement tools and materials.Home Depot wants to become more environmentally conscious.
Answer the following series of questions in an effort to develop a plan that will guide Home Depot executives into transforming Home Depot into a sustainable organization through green sourcing.
1.Define sustainability.
2.Outline a set of goals that would lead Home Depot down a sustainable path.
3.How do these goals make sense from both a financial and environmental perspective?
4.What are some ways supplier managers can aid in achieving these goals?

Question 48

Provide THREE key advantages that can be achieved in manufacturing firms that allow suppliers to contribute then become involved early in the new product (or old product reengineering)design and development process.

Question 49

The primary benefits of ____ include costs savings and freeing up time for purchasing staff to concentrate on the firm's core activities.

A) eProcurement
B) Insourcing
C) The Ethical Trade initiative
D) Six Sigma

Question 50

The organization you work for is characterized by the following:
•The organization was incorporated only 18 months ago
•Your end products are assembled using international components
•The organization competes in a high-tech industry
•The lifecycles for your products are relatively short
•The market for your products has seen a 30% growth rate in the last 12 months,and you expect to sustain growth rates of 30 to 50% over the next three years
All of these points lead to the conclusion that this is a relatively young organization that has grown quickly and will continue to experience considerable growth and change over the next few years.
In order to remain competitive the organization is looking to you to develop a plan in terms of establishing a sourcing strategy.Provide FOUR initiatives that you would suggest to management and describe why each is important.

Question 51

What are some of the risks of outsourcing?