Deck 12: Purchasing Organization

Question 1

Which of the following is not a strategic level purchasing decision? 

A) Decisions related to policies on reciprocal arrangements, countertrade and barter-deals. 
B) Decisions relating to policies concerning transfer-pricing and inter-company supplies. 
C) Developing routines for invoice handling and securing that proper payments are made to suppliers. 
D) Major investment decisions.

Answer 1

  C

Question 2

Which of the following best explains the concept of 'hybrid structure'? 

A) A combination of the centralized and decentralized structure. 
B) A matrix structure. 
C) A centralized structure. 
D) A decentralized structure.

Answer 2

  A

Question 3

Which of the following functions does not feature in purchasing's reporting relationships? 

A) Financial management. 
B) Logistics management. 
C) Human resources. 
D) Production management.

Answer 3

  C

Question 4

Which of the following managerial levels is not commonly at an operations level? 

A) Materials planner. 
B) Logistics management. 
C) Buying assistant. 
D) Senior buyer.

Question 5

Which of the following best explains 'centralized purchasing structure'? 

A) All managers can make purchasing decisions. 
B) There is a central purchasing department where corporate contracting specialists operate at the tactical level. 
C) There is a central purchasing department where corporate contracting specialists operate at the strategic level. 
D) There is a central purchasing department where corporate contracting specialists operate at the strategic and tactical level.

Question 6

Which of the following managerial levels is not commonly at a strategic level? 

A) Top management. 
B) Logistics management. 
C) Purchasing management. 
D) Senior buyer.

Question 7

Which of the following factors do not influence purchasing's reporting relationships? 

A) Strategic impact. 
B) Logistics complexity. 
C) Purchasing turnover ratio. 
D) Market share.

Question 8

Which of the following is not a tactical level purchasing decision? 

A) Introducing a cross-functional, cross-business category sourcing structure in the company. 
B) Agreement on corporate or annual supplier framework agreements. 
C) Troubleshooting: solving daily problems on quality, supply and payment in the relationship with the supplier. 
D) Selection and contracting of suppliers.

Question 9

Which of the following is not a strategic level purchasing decision? 

A) Decisions to outsource activities which are currently executed by the company to outside suppliers. 
B) Agreement on corporate or annual supplier framework agreements. 
C) Decisions related to supplier and sourcing strategies based on multiple versus single sourcing. 
D) Major investment decisions.

Question 10

Which of the following is not an operational level purchasing decision? 

A) The ordering process. 
B) Agreement on corporate or annual supplier framework agreements. 
C) All expediting activities related to released orders. 
D) The monitoring and evaluation of supplier performance.

Question 11

Which of the following is not a structural form for the organization of purchasing in multi-unit companies? 

A) Decentralized purchasing structure. 
B) Centralized purchasing structure. 
C) Virtual purchasing structure. 
D) Cross-functional sourcing teams.

Question 12

Which of the following does not greatly influence management's view of purchasing? 

A) Purchasing's share in the end-product's cost price. 
B) The financial position of the company. 
C) The extent to which the company is depending on the suppliers' market. 
D) The geographic location of the function.

Question 13

Which of the following best explains 'corporate procurement officer (CPO)'? 

A) The manager who is responsible for divisional purchasing for a corporation. 
B) The manager who purchases catering services. 
C) The senior executive who is responsible for the management and coordination of key purchasing and supply processes throughout the corporate organization. 
D) The senior executive who is responsible for a limited range of purchasing and supply processes.

Question 14

Which of the following managerial levels is not commonly at a tactical level? 

A) Top management. 
B) Logistics management. 
C) Purchasing management. 
D) Senior buyer.

Question 15

Which of the following best explains a 'buying consortium'? 

A) One company purchases on behalf of another. 
B) Individual companies created a legally binding arrangement to bundle their purchasing volumes through a joint initiative. 
C) There is a central purchasing department where corporate contracting specialists operate at the strategic level. 
D) Individual companies voluntarily bundle their purchasing volumes through a joint initiative.

Question 16

Which of the following is not an influence on the organization of purchasing? 

A) The characteristics of the company. 
B) The type of industry. 
C) The Chief Executive. 
D) The characteristics of the products purchased.

Question 17

Which of the following best explains 'decentralized purchasing structure'? 

A) All managers can make purchasing decisions. 
B) All business unit managers can request purchasing orders. 
C) All business unit managers can authorise invoices to be paid for purchases. 
D) All business unit managers are responsible for their own financial results and therefore are responsible for all of its purchasing activities.

Question 18

Which of the following is not a feature of a 'hybrid purchasing structure'? 

A) Voluntary coordination. 
B) Lead buyership. 
C) There is a central purchasing department where corporate contracting specialists operate at the strategic level. 
D) Lead design concept.

Question 19

Which of the following is not an operational level purchasing decision? 

A) The ordering process. 
B) Major investment decisions. 
C) All expediting activities related to released orders. 
D) The monitoring and evaluation of supplier performance.

Question 20

Which of the following is not a tactical level purchasing decision? 

A) Decisions to outsource activities which are currently executed by the company to outside suppliers. 
B) Agreement on corporate or annual supplier framework agreements. 
C) Adopting and conducting certification programmes (including audits) for suppliers. 
D) Selection and contracting of suppliers.

Question 21

Which of the following is not a feature of uniform purchasing procedures? 

A) Defining purchasing requirements. 
B) Price reduction. 
C) How to pre-qualify suppliers. 
D) How to select suppliers.

Question 22

Which of the following are not variables influencing what authority should be assigned to the purchasing department? 

A) Dispersed purchasing power. 
B) Information technology. 
C) Personal relationships. 
D) Total cost approach.

Question 23

Which of the following is not an organizational model for creating corporate advantage through purchasing? 

A) Federal purchasing. 
B) Centre-led purchasing. 
C) Central purchasing. 
D) Fragmented purchasing.

Question 24

Which of the following key factors are not commonly used when deciding to opt for centralization or decentralization in purchasing? 

A) Savings potential. 
B) Expertise required. 
C) Existing approach. 
D) Customer demands.

Question 25

Which of the following is an activity of corporate buyers? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Investment goods and maintenance good and services. 
D) General goods and services.

Question 26

Which of the following is not a potential consequence of uniform purchasing procedures? 

A) Lower price and cost levels. 
B) Higher quality. 
C) Better service delivery. 
D) Outsourcing.

Question 27

Which of the following best explains the 'fully integrated logistics structure'? 

A) Purchasing reports directly to the engineering manager at the same level as production planning and physical distribution. 
B) Purchasing reports directly to the logistics manager at a more senior level than production planning and physical distribution. 
C) Purchasing reports indirectly to the logistics manager via the finance manager. 
D) Purchasing reports directly to the logistics manager at the same level as production planning and physical distribution.

Question 28

Which of the following key factors are not necessary to realize and improve the global sourcing process? 

A) Outsourcing. 
B) Corporate commodity plans. 
C) Cross-functional teams. 
D) Standardization of logistics.

Question 29

Which of the following key factors are not commonly used when deciding to opt for centralization or decentralization in purchasing? 

A) Commonality of purchase requirements. 
B) Geographic location. 
C) Supply market structure. 
D) Number of purchasing specialists.

Question 30

Which of the following are not disadvantages related to decentralized purchasing? 

A) Dispersed purchasing power. 
B) Direct responsibility for profit centres. 
C) Scattered market research. 
D) No uniform attitude towards suppliers.

Question 31

Which of the following are not advantages related to decentralized purchasing? 

A) Dispersed purchasing power. 
B) Direct responsibility for profit centres. 
C) Less bureaucratic purchasing procedures. 
D) Direct communication with suppliers.

Question 32

Which of the following is an activity of a chief procurement officer (CPO)? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Investment goods and maintenance good and services. 
D) General goods and services.

Question 33

Which of the following key factors are not necessary to realize and improve the global sourcing process? 

A) Lower price and cost levels. 
B) Strong leadership. 
C) Active involvement of management. 
D) Formalized supplier management.

Question 34

Which of the following key factors determine the way in which corporations should leverage their purchasing and supplier strategies? 

A) Savings potential. 
B) Customer demands. 
C) Price fluctuations. 
D) Corporate cohesion.

Question 35

Which of the following is not an organizational model for creating corporate advantage through purchasing? 

A) Decentral purchasing. 
B) Coordinated purchasing. 
C) Central purchasing. 
D) Fragmented purchasing.

Question 36

Which of the following best explains the 'partially integrated logistics structure'? 

A) Production planning and physical distribution report to the logistics manager, whereas the purchasing manager reports to another senior manager. 
B) Purchasing reports directly to the logistics manager at a more senior level than production planning and physical distribution. 
C) Production planning and physical distribution report to the logistics manager, whereas the purchasing manager reports also to the logistics manager. 
D) Production planning and physical distribution report to the finance manager, whereas the purchasing manager reports to another senior manager.

Question 37

Which of the following is an activity of category sourcing managers? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Investment goods and maintenance good and services. 
D) General goods and services.

Question 38

Which of the following key factors determine the way in which corporations should leverage their purchasing and supplier strategies? 

A) Savings potential. 
B) Purchasing maturity. 
C) Price fluctuations. 
D) Customer demands.

Question 39

Which of the following is not a feature of purchasing maturity? 

A) The role of the purchasing departments. 
B) The status of the function. 
C) The availability of purchasing information systems. 
D) The level of collaboration with distributers.

Question 40

Which of the following is not a feature of purchasing maturity'? 

A) The level of professionalism in the purchasing function. 
B) The status of the function. 
C) The number of purchasing specialists. 
D) The purchasing budget.

Question 41

Which of the following is a skill required of NPR buyer? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 42

Which of the following is a responsibility of contract managers? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Materials planning. 
D) Solve supplier disputes.

Question 43

Which of the following best describes the skills required of a materials planner? 

A) Reporting skills. 
B) Project management skills. 
C) Communication skills. 
D) All-round (multiple skills).

Question 44

Which of the following is a responsibility of business analysts? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Materials planning. 
D) General goods and services.

Question 45

Which of the following is a skill required of a project buyer? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 46

Which of the following is not a skill required of a category sourcing manager? 

A) Leadership skills. 
B) Business skills. 
C) Communication skills. 
D) Long-term planning horizon.

Question 47

In a survey among procurement professionals in private and public-sector organizations throughout the UK and Europe,which percentage of purchasing respondents surveyed holds a degree? 

A) 32%. 
B) 52%. 
C) 62%. 
D) 75%.

Question 48

Which of the following is a skill required of 'legal counsels'? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 49

Which of the following is not a skill required of a chief procurement officer? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) General management skills.

Question 50

Which of the following is a responsibility of NPR buyers? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Materials planning. 
D) General goods and services.

Question 51

Which of the following is not a skill required by a legal counsel to solve supplier disputes? 

A) Analytical skills. 
B) Legal orientation. 
C) Leadership skills. 
D) Reporting skills.

Question 52

Which fraction of purchasing respondents surveyed admitted to rarely or never changing suppliers? 

A) 1/4. 
B) 1/3. 
C) 1/2. 
D) 1/5.

Question 53

Which of the following is a responsibility of project buyers? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Investment goods and maintenance good and services. 
D) General goods and services.

Question 54

Which of the following is a skill required of corporate buyer? 

A) Long-term planning horizon. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 55

Which of the following is a skill required of a chief procurement officer? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 56

Which of the following is a responsibility of legal counsels? 

A) Developing corporate sourcing strategies. 
B) Strategic commodities. 
C) Materials planning. 
D) Solve supplier disputes.

Question 57

Which of the following is not a skill required of a corporate buyer? 

A) Leadership skills. 
B) Commercial skills. 
C) Communication skills. 
D) Long-term planning horizon.

Question 58

Which of the following best explains NPR buyer? 

A) Buyers responsible for buying non-product related goods and services. 
B) Buyers responsible for buying non-product related services. 
C) Buyers responsible for buying product related goods. 
D) Buyers responsible for buying all goods and services.

Question 59

Which of the following is a skill required of a category sourcing manager? 

A) Leadership skills. 
B) Project management skills. 
C) Communication skills. 
D) Reporting skills.

Question 60

Which of the following is not a skill required of a NPR buyer? 

A) Generalist skills. 
B) Business administration. 
C) Communication skills. 
D) Long-term planning horizon.