Deck 1: Purchasing and Supply Management

Question 1

Standard costs of production are the basis for operating budgets, product prices, and control of production costs. As these areas develop, __________________ will become part of the ____________ -information system. Standard costs to create the time and place utilities will be calculable.

A) operations and traffic budgeting / technology
B) operations and distribution cost accounting / technology
C) purchasing and distribution cost accounting / accounting technology
D) purchasing and distribution cost accounting / technology
E) operations and warehouse budgeting / accounting

Answer 1

C

Question 2

Purchasers and buyers determine which commodities or services are best, choose the suppliers of the product or services, negotiate the lowest price, and award contracts that ensure that the correct amount of the product or service is received at the appropriate time.

Answer 2

True

Question 3

Supply management is a developing ____________ and an area of management _______________.

A) discipline / responsibility
B) function / specialization
C) division / knowledge
D) position / knowledge
E) discipline / specialization

Answer 3

E

Question 4

or each $___ reduction of material cost, there is a $___ increase in profit. The ratio is ____.

A) 1 / 1 / 1:1
B) 1 / 4 / 1:4
C) 1 / 2 / 1:2
D) 1 / 5 / 1:5
E) 1 / 3 / 1:3

Question 5

The ratios of materials related costs are increasing for all of the following reasons with one exception.

A) inflation and exchange rates
B) increased use of synthetic materials
C) sources of supply
D) complex high-value products

Question 6

_______________ is the cost to place one order. It is incurred each time an order is placed or part of an order is _____________________.

A) Order cost / back ordered
B) Order cost / scheduled for delivery
C) Finished cost / back ordered
D) Order cost / delivered
E) Total cost / scheduled for delivery

Question 7

Purchasing managers, buyers, and agents must become ________ (with/on) the services, materials, and products they purchase.

A) familiar
B) efficient
C) experts
D) effective

Question 8

Whatever the appeal and promise of integrated supply management, achieving integration is a challenge. The decisions of a ___________________________ manager may maximize utilization of production equipment, yet poorly serve the requirements of the ______________ manager.

A) operations-production control (OPC) / financial
B) production-inventory control (PIC) / marketing
C) operations production control (OPC) / plant
D) inventory control / plant
E) plant / marketing

Question 9

ll supply management activities have potential for _________________ and hence ________________.

A) increased costs / declining profits
B) cost reduction / decreased waste
C) cost reduction / increased profit
D) expense control / improved net profit
E) costs reduction / improved cost of goods sold

Question 10

.The cost of acquiring, storing, and moving materials is an increasingly large portion of the ____________________.

A) gross profit
B) cost of goods sold
C) net profit
D) direct expenses
E) cost of doing business

Question 11

hanging economic and political environments, emerging technology versus labor, and the changing nature of purchasing as a discipline-must influence the _______ of purchasing and supply management.

A) role
B) systematic process
C) policies
D) rules
E) direction

Question 12

.In most firms, functional managers within each area make independent decisions using similar techniques. The objective is to____________________ while ___________________________.

A) provide high-quality customer service / minimizing the cost of producing the service
B) provide high-quality customer service / maximizing the net profit
C) . provide customer service / maximizing gross profit
D) provide standard customer service / minimizing expenses
E) maximize profits / minimizing costs of producing the product

Question 13

The decision of the purchasing manager affects not only the purchasing function but other materials functions. It is the objective of ISM to manage the related considerations. Purchasing should consider _______________________ of its decisions.

A) the non-purchasing consequences
B) all the global consequences
C) only the purchasing consequences
D) only the direct consequences
E) none of the consequences

Question 14

The costs of satisfactory customer service are only partly identifiable and quantifiable. Our knowledge of the opportunity costs of poor customer service is also incomplete. Yet decisions must be made while recognizing the system wide decision criteria are ________________________.

A) multiple
B) complex
C) conflicting
D) none of the above
E) all of the above

Question 15

.The purpose of supply management is to support the transformation of raw materials and component parts into _________________.

A) shipped or inventory goods
B) consumer goods
C) high quality products
D) inventory and assets
E) completed goods

Question 16

Measures of customer service are usually expressed in terms of the _______________ of material. While important, ______________ is only one dimension of customer service.

A) quality / quality
B) abundance / abundance
C) availability / availability
D) price / price
E) quality / value

Question 17

Purchasing managers, buyers, and purchasing agents evaluate suppliers on the basis of _________________________________.

A) price and supplier status
B) service support and availability
C) reliability and selection
D) all of the above
E) "A" and "B" only

Question 18

The significance of average inventory is that ________________ is a function of average inventory. Inventory is an (a) _______. Working capital is tied up in material rather than an alternative asset. _______________________as well as costs of storing, insuring, and handling are incurred when inventory exists.

A) opportunity cost / liability / Inventory costs
B) inventory cost / liability / Opportunity costs
C) inventory cost / asset / / Opportunity costs
D) inventory cost / asset / Shrinkage
E) opportunity cost / asset / Shrinkage

Question 19

Purchasers buy goods and services for use by their __________________.

A) business associates
B) homes and businesses
C) families
D) business organization
E) employers

Question 20

uyers typically buy items for_________.

A) their employers
B) resale
C) their organizations
D) use in production
E) specific customers

Question 21

The second issue is, what level of authority should the purchasing function have? Given the evolution of outsourcing, the purchasing function is expected to lose authority in the corporate hierarchy

Question 22

.usinesses have had to change radically in response to ________________.

A) government regulations
B) consumer demand burgeoning technologies
C) competition
D) consumer demand
E) economic conditions

Question 23

When supply management costs become more ________, their control becomes more _________.

A) visible / effective
B) expensive / imperative
C) detailed / necessary
D) visible / feasible
E) expensive / feasible

Question 24

uring the next decade, the ___________________ function is likely to contribute to _________ more than any other function in the company.

A) supply management / profits
B) operations management / profits
C) marketing management / profits
D) supply management / costs
E) operations management / costs

Question 25

_____________________ seek to obtain the highest-quality merchandise at the lowest possible purchase cost for their employers.

A) materials managers
B) Buyers
C) Purchasing agents
D) all the above
E) "B" and "C" only

Question 26

___________ purchasing results in lower costs because of the availability of purchase quantity discounts.

A) Centralized Decentralized
B) Decentralized
C) Network
D) Cooperative

Question 27

____________ promotes the effective use of purchasing professionals because it allows the materials manager more authority and credibility.

A) Centralized Decentralized purchasing
B) Coop purchasing
C) Mass purchasing
D) Decentralized purchasing

Question 28

Supply coordination involves both _______________________ of the organization.

A) discipline and authority
B) knowledge and expertise
C) structure and authority
D) structure discipline and design
E) discipline and design