Question 1

Overall,the objectives of supply management focus on:&#10;A)operational and strategic issues.&#10;B)tactical,transactional and daily activities in the organization.&#10;C)price,supply availability,and inventory levels.&#10;D)internal supply processes and relationships with key suppliers.&#10;E)organizational competitive position and profitability.

Accepted Answer

The objectives of supply management cover both operational and strategic issues, including procurement, sourcing, supplier management, inventory management, and supply chain optimization, with the ultimate goal of improving organizational competitive position and profitability. Tactical, transactional, and daily activities are important parts but not the only focus of supply management objectives. Price, supply availability, and inventory levels are important factors to consider but not the only objectives. Internal supply processes and relationships with key suppliers are also important but are not the only objectives of supply management.

Question 2

A centralized supply structure is designed to:&#10;A)increase the strategic focus of purchasing and supply management.&#10;B)spread purchasing power throughout the buying organization.&#10;C)maximize business unit autonomy.&#10;D)simplify reporting lines.&#10;E)increase the speed of response to internal demand.

Accepted Answer

A centralized supply structure aims to increase the strategic focus of purchasing and supply management by consolidating purchasing power and decision-making authority in a central unit. This allows for better coordination of procurement activities and more effective negotiations with suppliers, ultimately leading to cost savings and improved supplier performance. The other options listed are not the primary objectives of a centralized supply structure.

Question 3

The size and activities of the supply function in a single business unit organization will depend on:&#10;A)the size of the company.&#10;B)the size of the company and the nature of the company's business.&#10;C)the nature of the company's business.&#10;D)the preference of the owner or president of the business.&#10;E)the preference of the supply manager.

Accepted Answer

The size and activities of the supply function in a single business unit organization depend on both the size of the company and the nature of the company's business. The larger the company, the more complex the supply function may be. However, the nature of the company's business will also influence the type of supplies needed and the level of coordination required within the supply function. Therefore, both factors must be considered when determining the size and activities of the supply function in a single business unit organization.

Question 4

Supply can provide an uninterrupted flow of materials,supplies and services by:&#10;A)holding large inventories.&#10;B)holding small inventories.&#10;C)standardizing capital equipment,materials,MRO and services.&#10;D)holding large inventories and standardizing capital equipment,materials,MRO and services.&#10;E)holding small inventories and standardizing capital equipment,materials,MRO and services.

Accepted Answer

Supply can ensure an uninterrupted flow of materials, supplies, and services by holding large inventories, which acts as a buffer against supply chain disruptions, and by standardizing capital equipment, materials, MRO (Maintenance, Repair, and Operations), and services, which simplifies procurement and reduces the need for a wide variety of items.

Question 5

A change from a decentralized supply structure to a centralized one:&#10;A)is solely the decision of the existing chief supply officer.&#10;B)is easily done as long as the CEO mandates the change.&#10;C)typically requires experience and skills not present in the existing structure.&#10;D)requires a consensus among existing supply management professionals.&#10;E)seldom requires new information technology.

Accepted Answer

Changing from a decentralized supply structure to a centralized one requires skills and experience as it involves significant changes in processes, policies, and procedures. It also requires a thorough analysis of the existing structure and an understanding of the supply chain. It may involve retraining or redeploying staff, implementing new technologies, and possibly changing the entire supply culture. Therefore, it may not be easy to carry out and requires expertise not present in the existing structure.

Question 6

Direct spend is:&#10;A)typically managed the same as indirect spend.&#10;B)of greater importance in manufacturing companies than in service companies.&#10;C)any input that is intangible.&#10;D)greater in service companies than in manufacturing.&#10;E)usually less of the focus of supply management than indirect spend.

Accepted Answer

Direct spend refers to the materials, goods, and services that are directly used in the production or delivery of a company's products or services. Thus, it is of greater importance in manufacturing companies where raw materials and components are a significant cost component in production.

Question 7

Internal business partnerships between supply and other functional areas such as marketing/sales,finance/accounting,operations and engineering are:&#10;A)easily developed because all functional areas share goals and metrics.&#10;B)difficult to develop because supply has little impact on organizational goals.&#10;C)unimportant because one area has no impact on the others.&#10;D)not worth the time it takes to develop them.&#10;E)desirable because of the interdependencies between and among functions.

Accepted Answer

Internal business partnerships between supply and other functional areas are desirable because most business processes require cooperation and coordination across functions. The interdependencies between supply and other functional areas, such as marketing/sales, finance/accounting, operations, and engineering, make these partnerships necessary for success.

Question 8

The degree of purchasing centralization is reflected by:&#10;A)the size of the purchasing organization.&#10;B)the number of supply professionals dispersed throughout the organization.&#10;C)the percentage of spend managed or controlled by business units.&#10;D)the percentage of spend managed or controlled by corporate supply.&#10;E)the amount of spend that is outsourced.

Accepted Answer

The degree of purchasing centralization is indicated by the percentage of spend managed or controlled by corporate supply, as it shows how much purchasing authority is centralized at the corporate level.

Question 9

The ratio of purchased material and services costs compared to total costs or total income has a major influence on:&#10;A)the nature of the products or services acquired.&#10;B)the size of the supply base.&#10;C)the extent to which supply and suppliers can provide competitive advantage.&#10;D)supply's reporting level in the organization.&#10;E)the credentials of the existing supply personnel.

Accepted Answer

The answer of The ratio of purchased material and services...

Question 10

High-performing cross-functional supply teams:&#10;A)rely on a sequential process across functions.&#10;B)concentrate most of the work at the front-end of the process.&#10;C)concentrate most of the work at the back-end of the process.&#10;D)are useful for every type and dollar value of purchase.&#10;E)require close supervision by senior management.

Accepted Answer

High-performing cross-functional supply teams concentrate most of the work at the front-end of the process, which includes needs assessment, supplier selection, and contract negotiation. This allows for a more efficient and effective procurement process.

Deck 3: Supply Organization