Deck 13: Sourcing Materials and Services

Question 1

e-Sourcing and e-Procurement are the same.

Answer 1

True

Question 2

When a firm makes a "make" decision when analyzing whether to "make or buy", they may still have to purchase some types of inputs from outside suppliers.

Answer 2

True

Question 3

In the Item Procurement Importance Matrix, what is described as high risk, high value?

A) generics
B) commodities
C) criticals
D) distinctives

Answer 3

C

Question 4

Distinctives are low-risk, high value items that are fundamental to the company's finished product.

Question 5

Strategic sourcing is almost the same as procurement.

Question 6

The most important factor in vendor selection is usually financial health.

Question 7

An advantage of e-Sourcing and e-Procurement is that there is little risk involved.

Question 8

Strategic sourcing as a process is far more broad and comprehensive than procurement. Overall, the process starts with the formation of a

A) steering committee.
B) list of vendors.
C) decision as whether to make or buy.
D) list of criticals.

Question 9

Landed costs are independent of sales/FOB terms.

Question 10

In the Item Procurement Importance Matrix, what item is described as low risk, low value?

A) generics
B) commodities
C) criticals
D) distinctives

Question 11

Which of these is not a form of purchasing?

A) purchasing
B) procurement
C) process improvement
D) sourcing

Question 12

There are seven steps in the Strategic Sourcing Methodology.

Question 13

There are several classifications of purchased items. Which of the following is NOT one of those?

A) commodities
B) generics
C) cash cows
D) criticals

Question 14

Traditional basic input costs and direct transaction costs are the same.

Question 15

Some firms are moving towards increasing their number of suppliers in order to encourage competition and lower procurement costs.

Question 16

In the Assess Supply Market step, the firm

A) determines which are the least cost vendors.
B) decides which vendors are located closest to the firm's plant to insure timely delivery.
C) identifies all possible suppliers that might be able to satisfy the user's needs.
D) defines the parameters of the sourcing strategy process.

Question 17

In the Item Procurement Importance Matrix, what describes high risk, low value?

A) generics
B) commodities
C) criticals
D) distinctives

Question 18

Vendors may offer varying levels of discounts from their published prices.

Question 19

The first step in managing sourcing and procurement is to determine the type pf purchase.

Question 20

Procurement serves as a critical link between members of the supply chain.

Question 21

For the buyer, the total procurement price is more than just the basic purchase price. There are other elements to consider. Name these elements, and discuss the primary considerations of each.

Question 22

In the Execute Sourcing Strategy step, the most important thing is to

A) appoint the sourcing committee members from the affected groups.
B) choose a supplier or suppliers, depending on the objectives of the sourcing decision.
C) verify which vendors are either TQM or ISO 9000.
D) determine which vendors have the lowest prices.

Question 23

What is an amalgam of catalogs from vendors within a market that is available via the Internet called?

A) electronic marketplace
B) buy-side system
C) sell-side system
D) on-line trading community

Question 24

There are three definitions to aid understanding of some of the similarities, differences, and linkages between purchasing, procurement, and strategic sourcing. Define them, and discuss the differences between the three.

Question 25

__________ exist for basic raw materials such as grain, oil, and sugar.

A) price lists
B) commodity markets
C) negotiations
D) price quotes

Question 26

There are four steps in the Managing Sourcing and Procurement Processes. Which does not belong?

A) determine the type of purchase
B) determine the necessary levels of investment
C) evaluate the effectiveness of the strategic sourcing process
D) examine off shore and e-procurement suppliers

Question 27

There are seven steps in the Strategic Sourcing Methodology. Name at least five, and choose two to discuss in more detail.

Question 28

Companies with 10,000 purchase transactions or more per year should consider

A) strategic sourcing solutions.
B) transactional procurement solutions.
C) business-to-business transactions.
D) collaboration tools.

Question 29

What vendor selection criteria are described by vendor attitude, cultural compatibility, training aids, packaging, and repair service?

A) quality
B) financial considerations
C) reliability
D) desirable capabilities

Question 30

Discuss the features of transactional procurement systems.

Question 31

The concept that represents the sum of all costs associated with making and delivering products to the point where they are needed is called

A) purchase/acquisition cost
B) strategic sourcing costs
C) life cycle costs
D) total landed cost

Question 32

Which of the following is NOT a source of price?

A) negotiations
B) price quotations
C) price lists
D) wholesale price index

Question 33

What are at least three types of certifications and registrations, what do they signify, and why are they important?

Question 34

What vendor selection criteria are described by price and financial stability?

A) capability
B) financial
C) quality
D) reliability

Question 35

What vendor selection criteria are described by production capability, labor relations, and operating controls?

A) capability
B) quality
C) reliability
D) financial

Question 36

Define and discuss the four basic types of e-commerce business models used in procurement and sourcing.

Question 37

Name several criteria that are important in vendor selection. Which one is the most important?

Question 38

Managing the sourcing and procurement process can be difficult for a multitude of reasons. However, a four-step approach can be used and adapted to a firm's particular needs. Name the four steps and discuss them.

Question 39

There are four types of products and services that are purchased with varying degrees of importance. Name all four, and choose two to discuss in terms of risk and value.