Deck 8: Eprocurement, Trading Exchanges, and Auctions

Question 1

A benefit of eprocurement is:

A) profitability.
B) unauthorized buying.
C) cost and efficiency.
D) channel effectiveness.
E) revenue optimization.

Answer 1

cost and efficiency.

Question 2

A vertical trading exchange:

A) has a product or service focus and doesn't target a specific industry.
B) never limits participation to specific buyers and sellers.
C) is one that has an industry or specific market focus such as healthcare.
D) can build an internet presence for companies in high-rise buildings.
E) uses optimum storage capabilities to outsource data management among trading partners.

Answer 2

is one that has an industry or specific market focus such as healthcare.

Question 3

Which of these steps is part of the eprocurement process?

A) system authentication
B) returns processing
C) testing
D) PO generation
E) request for delivery

Answer 3

PO generation

Question 4

Which of the following is part of the auctioning process?

A) auction announcement
B) promotion and scheduling
C) issuing passwords
D) billing
E) none of the above

Question 5

The most common use for eprocurement in its early stages was for the purchase of:

A) corporate travel services.
B) computer equipment.
C) office supplies and MRO items.
D) raw materials.
E) automotive parts.

Question 6

The use of eprocurement can:

A) increase brand recognition.
B) reduce efficiency.
C) reduce maverick buying.
D) increase horizontal trading exchanges.
E) increase purchase prices.

Question 7

What type of auction would you be involved in if the buyer receives bids from potential suppliers?

A) English auction
B) Reverse auction
C) Revised auction
D) Dutch auction
E) Sealed-bid auction

Question 8

Which of the following is an eprocurement activity?

A) issuing a purchase order
B) approval of purchase
C) selection of a vendor
D) payment
E) all of the above

Question 9

Auctions, both physical and virtual, can take a variety of formats in terms of how the process is conducted and how the winner is determined. An English auction is where:

A) they use a descending price format whereby the auctioneer begins with a high price.
B) the price declines to the point that no products remain.
C) the price ascends and the third highest bidder wins.
D) the price ascends and the highest bidder wins.
E) the price is bargained between the bidder and auctioneer.

Question 10

Trading exchanges in the business-to-business environment:

A) are important strategic mediums.
B) are valuable information gathering tools.
C) provide management with a place to share ideas with partners.
D) are valuable purchasing and selling sites.
E) offer very few services to companies.

Question 11

Which of the following is a benefit of eprocurement?

A) reduced administration costs
B) faster order times
C) price reductions
D) process efficiencies
E) all of the above

Question 12

Which of the following would be considered a benefit associated with eprocurement?

A) firewalls
B) maverick buying
C) authorized buying
D) bulk discounts
E) none of the above

Question 13

Which of the following is part of the auctioning process?

A) settlement
B) bidding
C) promotion and scheduling
D) bid evaluation
E) all of the above

Question 14

Procuring goods and services in electronic format:

A) increases risk of errors and fraud.
B) allows greater efficiency within the firm.
C) requires layoff of purchasing employees.
D) increases costs in the short run.
E) increases delivery time.

Question 15

In which auction type must the highest bidder pay the price submitted by the second highest bidder?

A) English auction
B) French auction
C) Reverse auction
D) Vickrey auction
E) Yankee auction

Question 16

A function that may be carried out by a trading exchange is:

A) certification of suppliers.
B) auction processes.
C) advertising.
D) escrow services.
E) all of the above

Question 17

An exchange that has a product or service focus such as computers or office equipment and does not target any specific industry is a:

A) private exchange.
B) vertical trading exchange.
C) public exchange.
D) horizontal trading exchange.
E) securities exchange.

Question 18

What is the basic order of the auctioning process?

A) Promotion and Scheduling, Bidding, Settlement
B) Auction Configuration, Promotion and Scheduling, Buyer and Seller Registration, Bidding, Bid Evaluation, Settlement
C) Bidding, Bid Evaluation, Settlement
D) Buyer and Seller Registration, Promotion and Scheduling, Auction Configuration, Bid Evaluation, Bidding, Settlement
E) Promotion and Scheduling, Buyer and Seller Registration, Bidding, Bid Evaluation, Settlement

Question 19

A horizontal trading exchange is one that can:

A) sell products to companies in one industry.
B) sell services to companies in one industry.
C) sell either products or services in one industry.
D) sell products or services to many industries.
E) only sell services.

Question 20

Benefits of eprocurement include:

A) cost and efficiency, authorized buying, strategic procurement
B) authorized buying, maverick buying, strategic procurement
C) maverick buying, bulk discounts, increased control
D) strategic procurement, maverick buying, cost and efficiency
E) none of the above

Question 21

Because these applications are accessed over the internet, SaaS-based applications became known as ________.

A) cloud computing.
B) e-auctions
C) trading exchanges
D) portals
E) web services

Question 22

A purchase order is sometimes called a ________.

A) forecast
B) digital certificate
C) quote
D) RFP
E) purchase agreement

Question 23

Moment of truth is part of the eprocurement process.

Question 24

The first stage in a procurement process whereby the buyer communicates its needs to potential suppliers, who will then submit tenders based on the requirements, is called:

A) procurement ignition
B) request for proposal
C) procurement proposition
D) procurement first notification
E) request for quotations

Question 25

The auction configuration (step 1 of the auctioning process) controls the timing details of the auction and auction closing rules.

Question 26

The function of trading exchanges is to consolidate numerous forms of communication into one medium.

Question 27

A request for quotations (RFQ) may be involved in the case of:

A) non-repetitive purchases.
B) purchases from unqualified suppliers.
C) routine product purchases.
D) standard product purchases.
E) international product purchases.

Question 28

Eprocurement can be defined broadly as the complete business process of acquiring goods through electronic means, from requisition through to fulfillment and payment.

Question 29

Horizontal trading exchanges are those which have an industry or specific market focus.

Question 30

A collaborative effort that aims to improve the ability to carry out electronic transactions with others is called:

A) Business Collaboration and Improvement Initiative (BCI).
B) Electronic Business Integration Initiative (EBI).
C) Full Business Collaboration Initiative (FBC).
D) Universal Description, Discovery, and Integration Initiative (UDDI).
E) Dynamic pricing

Question 31

Maverick buying is the unauthorized purchasing of goods by employees through non-routine and poorly controlled means such as acquiring office supplies with petty cash.

Question 32

Bid evaluation is an important part of the trading exchange process.

Question 33

The auction process needs to adequately create ________ so participants can develop confidence that the technology will conduct the auction according to the rules.

A) RFPs
B) audit trails
C) RFQs
D) approval requests
E) bids

Question 34

According to the textbook, the auction process involves how many steps?

A) 4
B) 6
C) 5
D) 7
E) 3

Question 35

E-hut is another term that can be used for a trading exchange.

Question 36

Questions such as, "Who can join the trading exchange?", "Are data owned by the exchange or individual members?", and "Are members restricted in their rights to participate in or own other exchanges?", represent what kind of issue for exchange providers?

A) legal issue
B) profitability
C) governance
D) integration
E) membership

Question 37

Eprocurement for production items is also referred to as ________.

A) materials management
B) epurchasing
C) esourcing
D) direct spending
E) dynamic pricing

Question 38

B2B trading exchanges range from basic brochureware sites to complex ______.

A) ecommerce environments
B) ebusiness trading exchanges
C) profitability environments
D) public exchanges
E) collaborative trading exchanges

Question 39

The eprocurement process varies somewhat by organization.

Question 40

Purchasing processes often need to be modified or reengineered when they are moved to an electronic environment.

Question 41

What kind of auction does EDS Canada used to acquire contract technical staffing services after issuing a request for proposal (RFP)? Describe it.

Question 42

Identify the elements that must be present for e-auctions to be deemed "fair" to participants.

Question 43

The acquisition of computer equipment represents another major category where businesses have begun to use eprocurement.

Question 44

Explain why restricting membership in a B2B trading exchange may be necessary.

Question 45

Describe the buyer and seller registration step in the auction process.

Question 46

The most common formats of auction used on the internet to date have been English auctions for C2C transactions and sealed-bid auctions for B2B transactions.

Question 47

What is esourcing?

Question 48

Describe the evolution of software as a service (SaaS).

Question 49

Name three major benefits of eprocurement.

Question 50

List four types of auctions described in this chapter.