Deck 1: Purchasing and Supply Management

Question 1

The return on assets effect (ROA)quantifies and measures:

A)the indirect contribution of supply management to profitability.
B)any increase in sales that occurs at a greater rate than the cost of assets.
C)reduction in the allocations to the operating budget of the supply department.
D)the impact of supply actions on inventory and the balance sheet.
E)the effect on profitability of reduced spend compared to a sales increase.

Answer 1

D

Question 2

The design and management of seamless,value-added processes across organizational boundaries to meet the needs of the end customer is called:

A)supply chain management.
B)strategic sourcing.
C)value management.
D)customer relationship management.
E)strategic process management.

Answer 2

A

Question 3

Supply can influence risk management in which area(s)?

A)financial
B)operational
C)reputation
D)financial and operational
E)financial,operational and reputation

Answer 3

E

Question 4

Interest in the supply function as a managerial activity began:

A)before 1900 when railroads recognized it as an important function.
B)during World Wars I and II because of global materials shortages.
C)in the 1970s during a period of high inflation.
D)in the early 1980s with high interest rates and the costs of financing inventory.
E)more recently with the rise of e-commerce.

Question 5

A successful supply chain management strategy integrates:

A)processes and systems within and across organizations.
B)processes and systems within the organization.
C)the flow of materials within an organization.
D)the flow of information within the buying organization.
E)the flow of information with first tier suppliers.

Question 6

Company image may be directly influenced by:

A)treating suppliers in a fair and equitable manner.
B)complying with regulatory requirements.
C)sustainability practices of suppliers.
D)treating suppliers in a fair and equitable manner,complying with regulatory requirements and sustainability practices of suppliers.
E)complying with regulatory requirements and sustainability practices of suppliers.

Question 7

In manufacturing organizations,the dollars spent with suppliers fall into what range as a percent of revenues?

A)25 to 35
B)30 to 60
C)45 to 75
D)50 to 80
E)65 to 75

Question 8

The use of the concepts of purchasing,procurement,supply,and supply chain management will vary from organization to organization depending on:

A)the organization's stage of development and/or sophistication.
B)the industry in which they operate.
C)the organization's competitive position.
D)the organization's stage of development and/or sophistication,the industry in which they operate and the organization's competitive position.
E)the organization's stage of development and/or sophistication and the industry in which they operate.

Question 9

Supply has the potential to contribute to:

A)financial performance.
B)financial performance and competitive position.
C)profitability,competitive position and sustainability performance.
D)competitive position and sustainability performance.
E)financial performance,competitive position and sustainability performance.

Question 10

Evidence of the growth and influence of supply management in an organization includes:

A)fewer activities under the management or span of control of supply.
B)meaningful involvement at the operational level.
C)involvement in strategic planning.
D)executive status of the chief supply officer.
E)involvement in strategic planning and executive status of the chief supply officer.

Question 11

For an organization with revenue of $100 million,purchases of $60 million,and profit of $8 million before tax,a 10 percent reduction in purchase spend would result in an increase in profit of:

A)10 percent.
B)36 percent.
C)57 percent.
D)60 percent.
E)75 percent.

Question 12

The supply area is a good training ground for managers because it provides exposure to:

A)accounting systems.
B)pressure of decision making under uncertainty.
C)various levels and functions in the organization.
D)accounting systems,pressure of decision making under uncertainty,and various levels and functions in the organization.
E)pressure of decision making under uncertainty and various levels and functions in the organization.