Deck 7: Supporting the Procurement Process with SAP

Question 1

Buying raw materials from an external vendor is an example of procurement.

Answer 1

True

Question 2

Products awaiting delivery to customers are stored in finished goods inventory.

Answer 2

True

Question 3

CBI adopted an industry-wide differentiation strategy to aid the implementation of SAP.

Answer 3

False

Question 4

A major disadvantage of an ERP system is that it weakens the internal controls that exist within an organization.

Question 5

A company stores the products that it manufactures in raw materials inventory.

Question 6

ERP systems help organizations keep track of inventory turnover.

Question 7

CBI initiated the planning process to implement SAP by determining the structure of its industry.

Question 8

A purchase order specifies the quantity of a product or service and the payment to be made to the supplier.

Question 9

CBI had no purchasing department before the implementation of SAP.

Question 10

The order activity at CBI has changed significantly after the implementation of SAP.

Question 11

Offering a product that has the lowest cost within an industry segment is called focused differentiation.

Question 12

Greater responsiveness to customers was the efficiency objective that CBI had chosen for its new procurement process.

Question 13

CBI used a single database for the entire procurement process before the implementation of SAP.

Question 14

Internal controls systematically limit the actions and behaviors of employees, processes, and systems within the organization to safeguard assets and to achieve objectives.

Question 15

Providing better products across an industry is known as industry-wide differentiation.

Question 16

Prior to the implementation of SAP at CBI, the warehouse manager was responsible for ordering and receiving raw materials.

Question 17

Prior to the implementation of SAP, the most important problem facing the accounting department at CBI was growth in the finished goods inventory.

Question 18

A purchase order is a document issued by suppliers to confirm an order placed by a company.

Question 19

Procurement is the process of collecting, storing, and physically distributing products to buyers.

Question 20

An invoice contains the amount due and the purchase order number for that invoice.

Question 21

A purchase requisition is a formal order sent to a supplier for the purchase of materials.

Question 22

All the procurement data is stored in one central database in the new SAP system at CBI.

Question 23

Suppliers ship products to CBI immediately after a purchase request is generated in the SAP system.

Question 24

In the supply chain, the returns management process is used to manage the financial returns of a company.

Question 25

The final activity of the procurement process at CBI is posting an outgoing payment.

Question 26

At CBI, the purchase requests that are generated using SAP are shared with suppliers.

Question 27

Process synergy occurs when processes are mutually supportive.

Question 28

SAP helped CBI's procurement process become more responsive to customer demands.

Question 29

Each actor involved in the procurement process at CBI has access to all the screens in the new SAP system.

Question 30

Having differentiated supply chain processes helps to reduce the bullwhip effect in the supply chain.

Question 31

The bullwhip effect occurs when companies order fewer supplies than what is required.

Question 32

Transportation is the lowest cost activity of the procurement process.

Question 33

CBI does not share its sales data with its suppliers in real time using SAP.

Question 34

Every SAP screen is associated with a title.

Question 35

Computer data or graphics are overlaid onto the physical environment with augmented reality.

Question 36

A bottleneck occurs when a limited resource greatly reduces the output of an integrated series of activities or processes.

Question 37

In the new SAP system at CBI, the purchasing manager should approve a purchase request for it to be converted to a purchase order.

Question 38

In the new SAP system implemented at CBI, a human actor has to initiate purchase requests.

Question 39

In the supply chain, the supplier evaluation process is used to determine the criteria for supplier selection.

Question 40

Users should input data in the header section of an SAP screen.

Question 41

The accounting database that existed in CBI before the implementation of SAP used to match the invoice data with the ________ and the goods receipt before making an entry in the database.

A) purchase order
B) inventory list
C) accounts payable form
D) purchase requisition

Question 42

Which of the following activities in the value chain includes receiving, storing and disseminating inputs to products?

A) inbound logistics
B) inventory control
C) operations
D) outbound logistics

Question 43

The warehouse manager at CBI was unable to identify the cause of a sudden increase in the sales of certain bike models. Which of the following was the reason for this?

A) The sales database did not contain information about sales promotions.
B) CBI did not have a sales database.
C) The sales database did not contain information about the prices of product accessories.
D) The sales database contained too much information about discounts and marketing campaigns.

Question 44

The implementation of SAP does not require employees to change or upgrade their skills.

Question 45

Why did information silos exist in CBI before the implementation of SAP?

A) The company used four different databases to store procurement information.
B) The company's database was small and could not store necessary information.
C) The company's database was large and centralized for all departments.
D) The company's database did not match purchase orders with suppliers' invoices.

Question 46

Before the implementation of SAP, what problem did CBI face when it held large quantities of finished goods?

A) Demand exceeded CBI's production capacity.
B) The sales database became saturated and redundant.
C) The space for storing raw materials was reduced.
D) Certain bike models had more buyers than others.

Question 47

A software consulting firm sends a formal document to its supplier, requesting for the delivery of 50 desktop computers. This is an example of a(n)________.

A) bill of materials
B) receipt bill
C) purchase order
D) itemized bill

Question 48

Additive manufacturing is also known as two-dimensional printing.

Question 49

CBI reduces costs by shifting production to suppliers who can do the work at a lower cost.

Question 50

RSA Cycles, Inc. is a leading bicycle manufacturer. The company manufactures bicycles that cater to different market segments. Which of the following items, stored in RSA's warehouse, is considered finished goods inventory?

A) metal parts obtained from small suppliers
B) tires that are procured from a vendor
C) bicycles that are to be shipped to retailers
D) tools that workers use in the production process

Question 51

Raw materials inventory stores product components and other goods that are ________.

A) manufactured within an organization
B) used in external firms' production processes
C) returned by customers
D) procured from suppliers

Question 52

________ is the process of obtaining the goods and services needed by an organization.

A) Fabrication
B) Procurement
C) Lead generation
D) Outbound logistics

Question 53

After the implementation of SAP at CBI, a purchasing agent was assigned the task of monitoring the purchase requisitions that the system kicked out every day.

Question 54

A car manufacturer purchases components such as seat belts, fenders, window seals, and panels from outside sources. This process of obtaining goods is called ________.

A) procurement
B) fabrication
C) lead generation
D) outbound logistics

Question 55

Before the implementation of SAP, CBI ________.

A) had multiple warehouses for different types of products and raw materials
B) stored finished goods and raw materials in the same warehouse
C) stored raw materials closer to the factory and finished goods closer to customers
D) had separate warehouses for finished goods and raw materials

Question 56

Finished goods inventory contains items that are ________.

A) used as inputs in the firm's manufacturing process
B) awaiting delivery to customers
C) returned by customers due to quality issues
D) placed in storage for future use by the company

Question 57

Which of the following documents does a firm receive from its suppliers and contains details such as the amount due to the supplier?

A) bill of materials
B) purchase order
C) itemized bill
D) purchase requisition

Question 58

Which of the following is a written document that requests the delivery of a specified quantity of a product or service in return for payment?

A) bill of materials
B) purchase order
C) receipt bill
D) itemized bill

Question 59

Additive manufacturing refers to manufacturing objects through the deposition of successive layers of material.

Question 60

A purchase order requests an action from a(n)________.

A) customer
B) retailer
C) internal consultant
D) supplier

Question 61

SAP helped CBI overcome the problems of its old procurement process by ________.

A) bringing all the data into one place for use in real time
B) establishing independent functional databases
C) avoiding the process of checking three-way matches
D) creating accounting, sales, and operational databases

Question 62

CBI shares ________ with its suppliers using SAP.

A) sales revenue information
B) purchase orders
C) purchase requests
D) warehouse statistics

Question 63

Which of the following efficiency objectives did CBI choose for its new procurement process?

A) reducing the cost of procuring supplies
B) larger finished goods inventory
C) larger inventory of raw materials
D) fewer errors in obtaining a three-way match

Question 64

________ systematically limit(s)the actions and behaviors of employees, processes, and organizational systems to safeguard assets and to achieve objectives.

A) Internal controls
B) Collaborative systems
C) Employee monitoring software
D) Augmented reality

Question 65

Which of the following is an operational supply chain process?

A) evaluation of suppliers
B) procurement of materials
C) returns management
D) supplier relationship management

Question 66

Identify the competitive strategy that CBI decided to adopt in order to implement SAP.

A) industry-wide low cost strategy
B) focused low cost strategy
C) focused differentiation strategy
D) industry-wide differentiation strategy

Question 67

Which of the following is the final activity of the procurement process at CBI after the implementation of SAP?

A) approving a purchase requisition
B) generating an invoice
C) creating a goods receipt
D) posting an outgoing payment

Question 68

CBI believed that SAP would help the company focus its processes on ________.

A) improving responsiveness to customers
B) achieving the lowest cost across the industry
C) achieving the lowest cost within its segment
D) improving the production of low-end bikes

Question 69

CBI initiated its SAP planning process by ________.

A) choosing a specific ERP package
B) creating a single inventory database
C) determining the structure of its industry
D) deciding on a specific SAP package

Question 70

In the new SAP system implemented at CBI, the purchase requisition activity is ________.

A) initiated by suppliers
B) an automated process
C) initiated by accountants
D) performed by a human actor

Question 71

The systems manager of an organization issues an order to the purchasing manager for the purchase of 15 new desktop computers. This is an example of a(n)________.

A) procurement order
B) purchase requisition
C) purchase order
D) itemized bill

Question 72

Which of the following actions is performed manually in the SAP system installed at CBI?

A) notifying the supplier
B) generating a purchase request
C) approving a purchase requisition
D) creating a unique PO number

Question 73

Before implementing any ERP system, an organization must first use ________.

A) a suitable information system to calculate the costs of existing inventory
B) a survey to understand the shortcomings of the existing system
C) the most economical technology available to reduce the initial costs of implementation
D) its strategy to set objectives and measures for major business processes

Question 74

Which of the following is a potential solution to the bullwhip effect?

A) increasing the number of levels in the supply chain
B) increasing manufacturing capacity
C) reducing the number of salespeople
D) sharing sales order data in real-time

Question 75

A(n)________ is an internal company document that issues an order for a purchase.

A) bill of materials
B) purchase order
C) itemized bill
D) purchase requisition

Question 76

Which of the following supply chain processes is strategic in nature?

A) evaluation of suppliers
B) returns management
C) procurement of materials
D) supplier relationship management

Question 77

Which of the following is a valid observation of the purchase process that existed in CBI before the implementation of SAP?

A) The company's purchasing department functioned effectively, but not efficiently.
B) The company operated without a purchasing department.
C) The company's purchasing agents were meticulous record keepers.
D) The company's purchasing agents operated out of a central location.

Question 78

The ________ effect occurs when companies order more supplies than are needed due to a sudden change in demand.

A) just-in-time
B) roll up
C) bullwhip
D) Doppler

Question 79

A large manufacturing company offers a forty percent discount on all its products for a short period of time. As a result, the retailers order and stock more products than needed in order to cash in on the opportunity. This situation refers to the ________.

A) just-in-time effect
B) roll up process
C) Doppler effect
D) bullwhip effect

Question 80

The returns management process in a supply chain manages ________.

A) returns of faulty inputs used in the production process
B) relationships with internal suppliers
C) returns of faulty products for businesses
D) financial returns from sales and other sources