Chapter 1 Introduction To Supply Chain Management 22

11. On occasion, firms assist suppliers, new or
old, to improve their processing capabilities, product or service quality,
delivery effectiveness, and cost performance by providing the required
technical and financial assistance. This is referred to as:

a.	Supplier development
b.	Outsourcing
c.	Centralized purchasing
d.	Supplier hybridization

12. The
Uniform Commercial Code governs the purchase and sale of goods in the US except
in the state of:

a.	Hawaii
b.	Louisiana
c.	Mississippi
d.	South Dakota

13. Which
of the following documents is considered the buyer’s offer to purchase products
or services from a supplier, is legally binding once the supplier accepts it,
and usually has the terms and conditions of purchase preprinted on the back of
the document?

a.	Purchase requisition
b.	Planned order release
c.	Material requisition
d.	Purchase order

14. Benefits
derived from implementing e-procurement systems include all of the following
EXCEPT:

a.	Allows buyers to submit bids and suppliers to respond to those bids in real time
b.	Increases the accuracy in communication between buyers and suppliers
c.	Creates numerous additional job opportunities in the purchasing department
d.	Tracking bids and transactions is easier and faster

15. Benefits
derived from implementing an e-procurement system include all EXCEPT:

a.	Time Savings
b.	Real Time Access
c.	Trackability
d.	Decentralized Purchasing

16. Which
of the following illustrates Forward Vertical Integration?

a.	Microsoft starting a new division that designs and manufactures clothing
b.	Ford automotive buying additional machines for production
c.	Subway sandwich company buying a bakery to make the bread for their sandwiches.
d.	Sony buying trucks to deliver their finished goods inventories to their customers’ warehouses

17. If
a distribution company that focused on warehousing and distribution of grocery
items decided to purchase a chain of grocery stores, the distribution company
would be exemplifying:

a.	Backward vertical integration
b.	Forward vertical integration
c.	Backward horizontal integration
d.	Forward horizontal integration

18. Which
of the following would be a good reason to outsource (buy) versus making?

a.	A firm lacks the technology or expertise to produce an item
b.	To utilize existing capacity within a company’s own firm
c.	To have more direct control over the design and production of an end item
d.	No competent supplier presently produces the needed item

19. Given
the following make-buy information, what would be the break-even point?

	Make Option	Buy Option
Fixed Costs	$7500	$1500
Variable Costs	$ 4	$ 9

a.	1200 units
b.	1708 units
c.	690 units
d.	460 units

20. Given
the following make-buy information, what would be the break-even point?

	Make Option	Buy Option
Fixed Costs	$15000	$1250
Variable Costs	$ 5	$ 10

a.	917 units
b.	2875 units
c.	1083 units
d.	2750 units

21. As
firms seek to improve the products they offer to the market, companies are
seeking help from their suppliers in new product design and development
through:

a.	Supplier certification programs
b.	Manufacturer certification programs
c.	Early supplier involvement
d.	Total Cost of Ownership initiatives

22. Which
of the following is a reason that single sourcing is considered risky/bad?

a.	The buyer’s required ordering quantities are very low
b.	Larger orders make quantity discounts more likely
c.	The limited (finite) capacity of one supplier
d.	Decreases the item to item quality variability of items purchased

23. Which
of the following statements is FALSE?

a.	More than 50% of each sales dollar typically goes towards covering supply chain costs
b.	Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents
c.	Electronic procurement systems can aid a company in saving both time and money
d.	If a firm lacks the technology to make a required component they will need to consider buying/outsourcing.

24. Which
of the following is NOT a form of countertrade?

a.	Barter
b.	Offset
c.	Incoterming
d.	Counterpurchase

25. While
most public procurement is focused on goals similar to those of purchasing
departments in the private sector, U.S. federal government purchases must
comply with the:

a.	Federal Acquisition Regulation
b.	Fair Standards and Equitable Purchases Act
c.	Federal Code of Conduct for Procurement
d.	Services and Materials Acquisition Act

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Chapter 1 Introduction To Supply Chain Management 22

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