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| 1 | |
Which of the following statements supports single sourcing: |
| | A) | there is a high probability of a devastating natural disaster. |
| | B) | the use of just-in-time production, stockless buying, or systems contracting. |
| | C) | concerns exist about supplier capacity for future volume. |
| | D) | there is a need to reduce dependence on a supplier. |
| | E) | there is volatility in the supplier market. |
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| 2 | |
In the portfolio matrix, characteristics of goods and services in the leverage quadrant are: |
| | A) | few suppliers with adequate capability so substitution and switching are difficult. |
| | B) | item substitution is possible, switching is difficult, many suppliers are available. |
| | C) | item substitution and supplier switching are possible, but few suppliers are capable. |
| | D) | competitive supply market, substitution is possible, price per unit is important. |
| | E) | competitive supply market, substitution is possible, total cost is a primary focus. |
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| 3 | |
Reverse marketing is: |
| | A) | encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains. |
| | B) | when the buying organization has decided to stop making something inhouse and identifies a supplier from its existing supply base. |
| | C) | is an aggressive, marketing-initiated, approach to finding and developing world class suppliers. |
| | D) | requires that the marketing department in the buyer's organization fully understand the needs of supply. |
| | E) | is most appropriate when the product is fairly standard and available from multiple local suppliers. |
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| 4 | |
Assessment of a potential supplier's financial situation: |
| | A) | is best left to the finance department which will alert supply to any issues that might adversely affect a pending deal. |
| | B) | seldom relies on financial information provided by the supplier. |
| | C) | is always necessary and follows a strict protocol no matter what type of purchase or dollar value. |
| | D) | is usually unnecessary because it is highly unlikely that a supplier will go out of business, and, even if they do, it is relatively easy to replace a supplier. |
| | E) | may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations. |
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| 5 | |
Supply management's role in environmental considerations is: |
| | A) | expanding because purchasing has primary responsibility for specification writing. |
| | B) | limited because environmental issues have little impact on the acquisition cycle. |
| | C) | expanding because the goal of zero environmental impact affects the buying cycle. |
| | D) | limited by the product design developed by design engineers. |
| | E) | limited to compliance with government laws and regulations. |
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| 6 | |
To avoid risk, a buyer can: |
| | A) | hedge in a commodities market. |
| | B) | require bid or performance bonds. |
| | C) | decide not to do business in certain countries. |
| | D) | a and b. |
| | E) | a, b, and c. |
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| 7 | |
A supplier's references: |
| | A) | should always be in the same industry as the buying organization. |
| | B) | may be useful if they are of similar size and objectives as the buyer's organization. |
| | C) | are never completely trustworthy and therefore of little use. |
| | D) | should be ask closed-ended (yes-no) questions. |
| | E) | are useful only to confirm factual information. |
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| 8 | |
Sustainability is the ability to: |
| | A) | sustain economic prosperity through long-term relationships with key suppliers. |
| | B) | achieve economic prosperity, a higher quality of life and protect natural systems. |
| | C) | develop a supply base that meets requirements and protects natural systems. |
| | D) | sustain long term bottomline growth with a stable supply base. |
| | E) | achieve economic prosperity for the company and its shareholders and avoid environmental litigation. |
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| 9 | |
Decision trees: |
| | A) | may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option. |
| | B) | may be useful in making effective supplier selection decisions the first-time a buying decision is made, but not on repetitive purchases. |
| | C) | may be useful in making effective supplier selection decisions when making repetitive purchases, but not special, one-time purchases. |
| | D) | are of limited value because options can only be evaluated qualitatively, not quantitatively. |
| | E) | cannot reflect past decisions so they are useless as a decision tool when making repetitive purchases. |
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| 10 | |
Small suppliers: |
| | A) | are most suited for large dollar value "A" requirements. |
| | B) | usually represent very low risk to the purchaser. |
| | C) | tend to have a strong financial base. |
| | D) | often provide the greatest responsiveness and flexibility. |
| | E) | tend to have an extensive management structure. |
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