Question 1

Which of the following best explains 'value pricing'?

Accepted Answer

A)  Price is based on what the market can bear. 
B)  Price is based on the amount of profit that should be realized. 
C)  Price is based on the importance of the customer to the supplier. 
D)  Fairly low prices for high quality offerings.

Question 2

Which of the following is not a factor in the 'learning effect'?

Accepted Answer

A)  Increased sales. 
B)  Reduced defects and line reject rates during the production process. 
C)  Increased profits from improved efficiency through streamlining the production process. 
D)  Reduced supervision as experience with production of a particular product grows.

Question 3

Which of the following is not a factor in the 'learning effect'?

Accepted Answer

A)  Improved process control. 
B)  Reduced defects and line reject rates during the production process. 
C)  Reduced engineering changes. 
D)  Improved turnover.

Question 4

Which of the following best explains internal factors?

Accepted Answer

A)  Those factors about which the supplier can exert control. 
B)  Those factors about which the purchaser cannot exert control. 
C)  Those factors about which the purchaser can exert control. 
D)  Those factors about which the supplier cannot exert control.

Question 5

Which of the following best explains 'promotional discount'?

Accepted Answer

A)  Discount is based on a special offer to temporarily stimulate sales. 
B)  Discount is based on orders placed out of season for delivery later in the year. 
C)  Discount is based on the how fast the customer pays their bills. 
D)  Discount is based on customers 'proximity to the supplier's factory or distribution centre.

Question 6

Which of the following is not a supplier assessment method?

Accepted Answer

A)  Supplier audits. 
B)  Qualitative assessments. 
C)  Vendor ratings. 
D)  Purchaser audits.

Question 7

Which of the following is not a factor influencing the fixing of the selling price?

Accepted Answer

A)  Expected demand for the product. 
B)  The expected development of the cost price per product unit. 
C)  The importance of the customer to the supplier. 
D)  Exchange rates.

Question 8

Which of the following is not an example of market circumstances?

Accepted Answer

A)  Demand. 
B)  Supply. 
C)  Political factors. 
D)  Cost price.

Question 9

Which of the following best explains 'seasonal discount'?

Accepted Answer

A)  Discount is based on volume ordered and buyers can realize a lower price per unit. 
B)  Discount is based on orders placed out of season for delivery later in the year. 
C)  Discount is based on the how fast the customer pays their bills. 
D)  Discount is based on customers 'proximity to the supplier's factory or distribution centre.

Question 10

Which of the following is not a supplier assessment level?

Accepted Answer

A)  Company level. 
B)  Product level. 
C)  Process level. 
D)  Accreditation level.

Question 11

Which of the following best explains external factors?

Accepted Answer

A)  Those factors about which the supplier can exert control. 
B)  Those factors about which the purchaser cannot exert control. 
C)  Those factors about which the purchaser can exert control. 
D)  Those factors about which the supplier cannot exert control.

Question 12

Which of the following best explains 'the customer's specification'?

Accepted Answer

A)  The buyer knows precisely the cost of the material to be purchased. 
B)  The buyer can only obtain a rough indication of the product's cost by means of supply market research. 
C)  The buyer can only obtain a rough indication of the product's cost by means of demand market research. 
D)  The buyer knows precisely the profit margin on the material to be purchased.

Question 13

Which of the following is not a cost factor?

Accepted Answer

A)  Energy costs. 
B)  Labour productivity. 
C)  Materials costs. 
D)  Supplier capacity utilization.

Question 14

Which of the following best explains 'geographical discount'?

Accepted Answer

A)  Discount is based on volume ordered and buyers can realize a lower price per unit. 
B)  Discount is based on orders placed out of season for delivery later in the year. 
C)  Discount is based on the how fast the customer pays their bills. 
D)  Discount is based on customers 'proximity to the supplier's factory or distribution centre.

Question 15

Which of the following is not a supplier segment?

Accepted Answer

A)  Strategic partners. 
B)  Wholesale partners. 
C)  Performance partners. 
D)  Preferred suppliers.

Question 16

Which of the following is not an example of a facility cost driver?

Accepted Answer

A)  Facility scale. 
B)  Degree of vertical integration. 
C)  Use of automation. 
D)  Transportation costs to customer.

Question 17

Which of the following is not an activity associated with turning supplier rivalry into opportunity?

Accepted Answer

A)  Source each component from two or three vendors. 
B)  Go to see how suppliers work. 
C)  Create compatible production philosophies and systems. 
D)  Set up joint ventures with existing suppliers to transfer knowledge and maintain control.

Question 18

Which of the following is not a financial indicator for assessing a supplier's financial position in relation to equity/debt relationship?

Accepted Answer

A)  Cash flow/investments. 
B)  Long term debt/fixed assets. 
C)  Equity/total assets. 
D)  Earning before tax.

Question 19

Which of the following is not a situation in which to use the 'learning effect'?

Accepted Answer

A)  When large amounts of money are involved. 
B)  When there is insufficient time. 
C)  When it concerns customized components manufactured by a supplier to the customer's specification. 
D)  When direct labour costs make up an important part of the cost price of the product to be produced.

Question 20

Which of the following best explains 'perceived value pricing'?

Accepted Answer

A)  Price is based on what the market can bear. 
B)  Price is based on the amount of profit that should be realized. 
C)  Price is based on the importance of the customer to the supplier. 
D)  Price is based on expected supply of the product.

Exam 14: Cost Approaches and Techniques

Which of the following best explains 'value pricing'?

Which of the following is not a factor in the 'learning effect'?

Which of the following is not a factor in the 'learning effect'?

Which of the following best explains internal factors?

Which of the following best explains 'promotional discount'?

Which of the following is not a supplier assessment method?

Which of the following is not a factor influencing the fixing of the selling price?

Which of the following is not an example of market circumstances?

Which of the following best explains 'seasonal discount'?

Which of the following is not a supplier assessment level?

Which of the following best explains external factors?

Which of the following best explains 'the customer's specification'?

Which of the following is not a cost factor?

Which of the following best explains 'geographical discount'?

Which of the following is not a supplier segment?

Which of the following is not an example of a facility cost driver?

Which of the following is not an activity associated with turning supplier rivalry into opportunity?

Which of the following is not a financial indicator for assessing a supplier's financial position in relation to equity/debt relationship?

Which of the following is not a situation in which to use the 'learning effect'?

Which of the following best explains 'perceived value pricing'?