Deck 3: The Purchasing Management Process

Question 1

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) Size. 
C) Reputation. 
D) Profitability.

Answer 1

  C

Question 2

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) Quality of Service. 
C) Strategic Plan. 
D) Profitability.

Answer 2

  B

Question 3

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) References. 
C) Size of Premises. 
D) Chief Executive.

Answer 3

  B

Question 4

Which of the following explains 'Audit Process'? 

A) The process audit is a systematic investigation of the extent to which the (technical) processes are capable of meeting the established standards in a predictable way. 
B) The process audit is a snap check on the extent to which the (technical) processes are capable of meeting the established standards in a predictable way. 
C) The process audit is a systematic investigation of the extent to which the (technical) processes are capable of meeting the established standards. 
D) The process audit is a systematic investigation of the extent to which the (technical) processes are capable of meeting the future standards in a predictable way.

Question 5

Which of the following is the main reason for 'Single Sourcing'? 

A) Contractual obligations. 
B) The number of suppliers. 
C) The technical specifications of the good or service to be purchased. 
D) The price.

Question 6

Which of the following is not a feature of 'Global sourcing'? 

A) It is pro-actively integrating and coordinating common items and processes across worldwide locations. 
B) It is pro-actively integrating and coordinating common items and materials across worldwide locations. 
C) It is pro-actively integrating and coordinating common items and suppliers across worldwide locations. 
D) It is reactively dispersing common items and materials across worldwide locations.

Question 7

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) Transaction orientation. 
B) Pricing. 
C) Design. 
D) Manufacture.

Question 8

Which of the following explains 'Gain and Risk Sharing Agreements'? 

A) The supplier future income is partially determined by the success of the customer's new product in its end markets. 
B) The supplier future income is wholly determined by the success of the customer's new product in its end markets. 
C) The customer's future income is partially determined by the success of the customer's new product in its end markets. 
D) The supplier future income is partially determined by the success of the customer's existing product in its end markets.

Question 9

Which of the following best explains the term 'Learning Curve' originally developed in the American aircraft industry? 

A) The cost price per aeroplane decreased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled. 
B) The cost price per aeroplane increased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled. 
C) The cost price per aeroplane decreased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled. 
D) The cost price per aeroplane increased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled.

Question 10

Which of the following should be provided by purchasing management? 

A) Periodical, detailed management reporting. 
B) Increased market share. 
C) New product development. 
D) Risk assessments.

Question 11

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) Unionisation of workforce. 
C) Motivation. 
D) Profitability.

Question 12

Which of the following explains 'Market Structure'? 

A) The total set of conditions in which a company sells its products, with special attention to the number of parties in the market and the nature of the product being traded. 
B) The number of suppliers. 
C) The total set of conditions in which a company sells its products with special attention to the nature of the product being traded. 
D) The total set of conditions in which a company sells its products with special attention to the number of parties in the market.

Question 13

Which of the following explains 'Systems Audit'? 

A) Assessing the control system of an organization using a systems approach. 
B) Assessing the internal quality of an organization using a systems approach. 
C) Assessing the internal quality and control system of an organization using a systems approach. 
D) Assessing the external quality and control system of an organization using a systems approach.

Question 14

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) Size. 
C) Dynamism. 
D) Profitability.

Question 15

Which of the following explains 'Product Audit'? 

A) This provides an image of the degree to which a company succeeds in making everything runs perfectly according to the standards established by the company itself. 
B) This provides an image of the degree to which a company succeeds in making everything runs perfectly according to the standards and requirements established by the company itself. 
C) This provides an image of the degree to which a company succeeds in making everything runs perfectly. 
D) This provides an image of the degree to which a company succeeds.

Question 16

Which of the following explains 'Competitive Pricing'? 

A) The price paid for a product is based upon competitive tendering. 
B) The price paid for a product is based upon competitive tendering among a number of pre-selected suppliers. 
C) The price paid for a product is based upon a set fee. 
D) The price paid for a product is based upon competitive tendering among a number of unknown suppliers.

Question 17

Which of the following explains 'Global Sourcing'? 

A) Proactively integrating and co-ordinating common items and designs, technologies and suppliers across worldwide purchasing and operating locations. 
B) Proactively integrating and co-ordinating common items and processes across worldwide purchasing and operating locations. 
C) Proactively integrating and co-ordinating common items and materials, processes, designs, technologies and suppliers across worldwide purchasing and operating locations. 
D) Proactively integrating and co-ordinating common items and materials across worldwide purchasing and operating locations.

Question 18

Which of the following are likely to be a criterion for choosing the best supplier? 

A) Location. 
B) Size. 
C) Competitiveness. 
D) Profitability.

Question 19

Which of the following explains 'Supply Chain'? 

A) A series of companies (links) in which the consecutive stages of production of an economic product take place, from primary production to final consumer 
B) A series of companies (links) in which the consecutive stages of production of an economic product take place from primary production. 
C) A series of companies (links) in which the consecutive stages of production of an economic product take place. 
D) A series of companies (links).

Question 20

Which of the following explains 'Purchasing Management'? 

A) All activities necessary to manage suppliers. 
B) All activities necessary to manage supplier relationships. 
C) All activities necessary to manage supplier relationships in such a way that their activities are aligned with the company's overall business strategies. 
D) All activities necessary to manage supplier relationships in such a way that their activities are aligned with the company's overall business strategies and interests.

Question 21

Which of the following dimensions are quality costs? 

A) The cost of wages and salaries. 
B) The cost of preventing errors. 
C) The cost of cancelled orders. 
D) The reputational costs.

Question 22

Which of the following dimensions can be used to measure and evaluate purchasing activities? 

A) Organizational. 
B) Reputation. 
C) Complaints. 
D) Number of staff.

Question 23

Which of the following dimensions are aspects of materials cost policy? 

A) Control of cost of uniforms. 
B) The cost of energy consumption. 
C) Reduction of logistics and transportation cost. 
D) The reputational costs.

Question 24

Which of the following explains 'Purchasing Authority'? 

A) This allows a manager to legally bind their company to an external partner. 
B) This allows a manager to legally bind their company to an internal partner. 
C) This allows a manager to link their company to an external partner. 
D) This allows a manager to legally bind their external partner.

Question 25

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) Delivery 
B) Commercial orientation 
C) Design 
D) Manufacture

Question 26

Which of the following is not part of the purchasing management process? 

A) Purchasing planning. 
B) Purchasing policy implementation. 
C) Purchasing control/inspection and evaluation. 
D) Health and Safety compliance.

Question 27

Which of the following explains 'Purchasing Performance'? 

A) The extent to which the purchasing function is able to realize its costs. 
B) The extent to which the purchasing function is able to sacrifice of a minimum of the company's resources, i.e. costs. 
C) The extent to which the purchasing function is able to realize its predetermined goals at the sacrifice of a minimum of the company's resources, i.e. costs. 
D) The extent to which the purchasing function is able to realize its predetermined goals.

Question 28

Which of the following dimensions can be used to measure and evaluate purchasing activities? 

A) Price/Cost. 
B) Reputation. 
C) Complaints. 
D) Number of staff.

Question 29

Which of the following dimensions are quality costs? 

A) The costs that result from preventing mistakes. 
B) The cost of energy consumption. 
C) The cost of cancelled orders. 
D) The reputational costs.

Question 30

Which of the following dimensions are aspects of materials cost policy? 

A) Control of materials costs and prices. 
B) The cost of energy consumption. 
C) The cost of cancelled orders. 
D) The reputational costs.

Question 31

Which of the following is not part of the purchasing management process? 

A) Purchasing (market) research. 
B) Purchasing objectives. 
C) Purchasing strategy. 
D) Purchasing structures.

Question 32

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) Transportation. 
B) Value chain orientation. 
C) Design. 
D) Manufacture.

Question 33

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) Planning. 
B) Pricing. 
C) Design. 
D) Internal integration.

Question 34

Which of the following dimensions can be used to measure and evaluate purchasing activities? 

A) Product/Quality. 
B) Reputation. 
C) Complaints. 
D) Number of staff.

Question 35

Which of the following explains 'Purchasing Market Research'? 

A) The systematic gathering, classification and analysis of data. 
B) The systematic gathering, classification and analysis of data considering all relevant factors that influence the procurement of goods and services for the purpose of meeting present and future company requirements. 
C) The systematic gathering, classification and analysis of data considering all relevant factors that influence the procurement of goods and services. 
D) The systematic gathering, classification and analysis of data considering all relevant factors that influence the procurement of goods and services for the purpose of meeting present.

Question 36

Which of the following dimensions are quality costs? 

A) The cost of wages and salaries. 
B) The cost related to the timely recognition of errors. 
C) The cost of cancelled orders. 
D) The reputational costs.

Question 37

Which of the following dimensions are aspects of materials cost policy? 

A) Control of the wage/salary bill. 
B) The cost of energy consumption. 
C) The cost of cancelled orders. 
D) Reduction of transaction cost.

Question 38

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) After Sales Service. 
B) Pricing. 
C) Coordination orientation. 
D) Manufacture.

Question 39

Which of the following is a stage in the 'Purchasing and Supply Development Model'? 

A) External integration. 
B) Pricing. 
C) Design. 
D) Manufacture.

Question 40

Which of the following dimensions can be used to measure and evaluate purchasing activities? 

A) Floor area of facility. 
B) Reputation. 
C) Complaints. 
D) Logistics.

Question 41

Which of the following are performance targets for purchasing? 

A) Profit maximisation. 
B) Supplier quality improvement. 
C) Improving logistics performance. 
D) Internal communications.

Question 42

Which one of the following best describes what investments are made by the company in terms of new products and technology,and what products will be taken out of the market for the years to come? 

A) Planning phase 
B) Business alignment strategy 
C) Operational phase 
D) Implementation phase

Question 43

Which of the following are performance targets for purchasing? 

A) Profit maximisation. 
B) Supplier quality improvement. 
C) Improving logistics performance. 
D) Internal communications.

Question 44

Which of the following must the purchasing management process strive for continuously improving? 

A) The delivery dates of orders. 
B) The price/value ratio in the relationship with suppliers. 
C) The number of suppliers. 
D) Storage facilities.

Question 45

Which of the following is not part of communicating purchasing policy? 

A) Internal communication. 
B) Settling complaints. 
C) Business values, integrity and ethics. 
D) External communication.

Question 46

Which of the following are performance targets for purchasing? 

A) Profit maximisation. 
B) Manufacturing improvement. 
C) Improving supplier logistics performance. 
D) Internal inefficiency.

Question 47

Which of the following is not a focus in the purchasing and supply model? 

A) Reduce cost. 
B) Total customer satisfaction. 
C) Contract management. 
D) Supply chain optimization.

Question 48

Which of the following tasks is not a task of the purchasing department? 

A) Conducting purchasing market-research. 
B) Specification of price and delivery conditions. 
C) Investigating the financial position of suppliers. 
D) Defining purchasing specifications.

Question 49

Which of the following is not a focus in the purchasing and supply model? 

A) Ethics 
B) Savings through synergy. 
C) Total cost of ownership. 
D) Supply chain optimization

Question 50

Which of the following is not a focus in the purchasing and supply model? 

A) Reduce cost. 
B) Social resistance 
C) Supply chain optimization. 
D) Serve the factory.

Question 51

Which of the following techniques can be used to measure purchasing performance? 

A) Suggestion Schemes. 
B) Psychometric testing. 
C) Customer satisfaction surveys. 
D) Teambuilding.

Question 52

Which of the following techniques can be used to measure purchasing performance? 

A) Benchmarking. 
B) Suggestion schemes. 
C) Teambuilding. 
D) Psychometric testing.

Question 53

Which of the following is not a stage of development in the purchasing and supply model? 

A) Transaction orientation. 
B) Commercial orientation. 
C) Business values, integrity and ethics development. 
D) Value chain integration.

Question 54

Which of the following are performance targets for purchasing? 

A) Profit maximisation. 
B) Manufacturing improvement. 
C) Improving logistics performance. 
D) Internal efficiency.

Question 55

Which of the following is the prime source of the purchasing objectives? 

A) Operational plans. 
B) Customer evaluations. 
C) Company strategies. 
D) Tactical plans.

Question 56

Which of the following best explains 'Residential engineering'? 

A) A situation where engineers from the supplier are co-located at the buyer's organization to work on design or manufacturing problems. 
B) A situation where engineers from the supplier live on the premises of the buyer organization. 
C) A situation where engineers from a consultancy are co-located at the buyer's organization to work on design or manufacturing problems. 
D) A situation where accountants from the supplier are co-located at the buyer's organization to work on pricing problems.

Question 57

Which of the following is not a focus in the purchasing and supply model? 

A) Reduce cost. 
B) Savings through synergy. 
C) Total cost of ownership. 
D) Value chain integration.

Question 58

Which of the following are performance targets for purchasing? 

A) Cost reduction. 
B) Manufacturing improvement. 
C) Improving logistics performance. 
D) Internal Transport

Question 59

Which of the following are performance targets for purchasing? 

A) Profit maximisation. 
B) Manufacturing improvement. 
C) Improving supplier logistics performance. 
D) Internal inefficiency.

Question 60

Which of the following is the prime task and responsibility of purchasing? 

A) Securing availability of required materials and services at consistent quality from reliable suppliers. 
B) Securing availability of required materials and services from reliable suppliers. 
C) Securing availability of required materials and services at consistent quality. 
D) Securing services at consistent quality from reliable suppliers.