Deck 6: Need Identification and Specification

Question 1

A non-repetitive purchase,such as a $5 million piece of equipment,should be purchased by:

A)a project team representing supply,finance,and operations.
B)a permanent team representing supply,finance,and operations.
C)the user with a purchasing card.
D)a blanket order.
E)a procurement process or system.

Answer 1

A

Question 2

Simplification is:

A)essentially a technical and engineering concept.
B)an agreement on definite sizes,design,and quality.
C)a reduction in the number of suppliers providing a certain item.
D)an attempt to concentrate production on the most important product sizes.
E)an attempt to reduce conflicting information in specifications.

Answer 2

D

Question 3

Supply chain risks may be:

A)operational.
B)financial.
C)reputational.
D)operational and financial.
E)operational,financial and reputational.

Answer 3

E

Question 4

When a specification is formulated by the buying organization,often on the basis of standards set by governmental or technical societies,it is called a(n):

A)standard specification.
B)performance standard.
C)individual standard.
D)market standard.
E)customized standard.

Question 5

About 70 percent of the opportunity for value improvement lies in:

A)supplier selection and contract negotiations.
B)evaluation of potential suppliers and supplier selection.
C)identification and evaluation of potential suppliers.
D)specification and identification of potential suppliers.
E)need identification and specification.

Question 6

A requirement typically is considered strategic if it:

A)enhances revenue.
B)reduces risk.
C)provides access to new technology.
D)enhances revenue and reduces risk.
E)enhances revenue,reduces risk and provides access to new technology.

Question 7

The inability to store services:

A)means timing is non-critical to successful service acquisition.
B)makes it easier to acquire services than goods.
C)creates quality assurance difficulties.
D)facilitates supplier performance evaluation and measurement.
E)is of little importance at the time of supplier selection.

Question 8

When using performance or function specification as a method of description:

A)it is fairly easy to ensure that suppliers are quoting for exactly the same material or service.
B)the opportunity exists to purchase identical requirements from several sources.
C)it is easy to compare quotations and the supplier cannot include a risk allowance in the price.
D)most of the risk is borne by the buyer.
E)most of the risk is borne by the supplier.

Question 9

Early supply and supplier involvement:

A)is seldom necessary because internal users are best suited to identify needs.
B)helps assure that what is specified is procurable and represents best value.
C)is focused on early establishment of key contractual terms and conditions.
D)relies on cross-functional teams to manage the buyer-supplier relationship.
E)is a way to encourage internal customers to regularly interact with suppliers.

Question 10

Capital assets:

A)are not bought and sold in the regular course of business.
B)may be tangible or intangible.
C)have an expected use of less than one year.
D)have little or no effect on the organization's operations.
E)are typically acquired for fairly small sums of money.