Deck 16: Other Supply Responsibilities

Question 1

Production planning relies heavily on forecasts from operations to anticipate demand for products and services..

Answer 1

False

Question 2

Supply can contribute to the organization's environmental management program by:

A) developing sourcing and usage alternatives for hazardous materials.
B) focusing on substitution of non-hazardous materials for hazardous materials.
C) encouraging and participating in designing products that do not use or generate hazardous waste.
D) a and b
E) a, b and c

Answer 2

E

Question 3

Reducing the obsolescence and waste of maintenance, repair, and operating MRO) supplies through better materials and inventory management will:

A) reduce the costs of disposing of MRO items that are obsolete or waste.
B) reduce carrying cost by lowering inventory levels, especially of obsolete items.
C) improve environmental performance by reducing waste that goes into landfills or incinerators.
D) simultaneously reduce costs and improve environmental performance.
E) have little impact because MRO is a small percentage of annual spend and the items usually have low environmental low-impact.

Answer 3

D

Question 4

One of the reasons why companies are paying more attention to the effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste materials is that:

A) consumers overwhelmingly demand environmental responsibility.
B) it is easy to administer and highly profitable.
C) most organizations generate little scrap, surplus, obsolete and waste materials.
D) disposal costs are rising and environmental legislation is strengthening.
E) disposal is a fairly simple problem that is easily resolved.

Question 5

Obsolete is in the eyes of the beholder. Something that has been declared obsolete in one organization may be perfectly acceptable and useable in another.

Question 6

Waste is created when a change in the production process occurs, or when a better material is substituted for the material originally used.

Question 7

An organization's Enterprise Resource Planning ERP) system may be used to develop a national or global database for company personnel at different locations to post and purchase spare parts, obsolete materials, and surplus.

Question 8

Escalator clauses in contracts for scrap disposal are necessary because the prices of primary metals fluctuate.

Question 9

To ensure maximum return for its investment, the process and procedures for selling scrap and surplus must cover a broad range of activities including segregation and storage, weighing and measuring, delivery, negotiation, supplier selection, and payment.

Question 10

The role and importance of investment recovery in an organization is driven in large part by the:

A) CEO's perspective on environmental issues.
B) Chief Purchasing Officer's clout or leverage with other executives.
C) projected dollar value of the potential revenue recovery or cost reduction.
D) salespeople who encourage the inclusion of buy-back programs of key materials.
E) internal level of knowledge about disposal channels and suppliers.

Question 11

Production planning:

A) focuses on long-term schedules to control inventory and production.
B) requires coordinating the delivery and storage of key raw materials.
C) cannot involve supply because of fears of undue influence from suppliers.
D) relies heavily on forecasts from purchasing and supply management.
E) is a discrete activity with little coordination with other functions.

Question 12

The potential benefits of having accounts payable report to the same executive as supply include:

A) familiarity with the supplier
B) familiarity with the order.
C) opportunities to reduce transaction costs and headcount.
D) the ability for supply to ensure that payments for suppliers are made on time.
E) all of the above.

Question 13

The total cost of hazardous waste for a company does not include the costs of new plant and equipment to reduce waste and deal with contaminated plants.

Question 14

Investment recovery is often assigned to:

A) supply managers because they have knowledge supply markets and price trends.
B) salespeople because they have contact with buyers who may use the material.
C) marketing managers because they have information on internal users.
D) engineers who can suggest possible uses of the material within the organization.
E) financial analysts because they set the target return on all investments.

Question 15

Coordinating inbound and outbound transportation:

A) has little application in an effective and efficient supply organization.
B) is done by cross-functional teams in most organizations.
C) helps to reduce costs and improve utilization of related assets and resources.
D) provides the basic elements of a global supply network.
E) is used extensively in Europe, but has not migrated to the U.S.

Question 16

It makes no sense to assign responsibility for disposal to the supply management function because the personnel usually have no selling experience.

Question 17

As more people come to believe that it makes economic sense to practice environmentally sound operations, business and government may be able to work together for common goals.

Question 18

If material has been declared surplus, the only option is to sell it.

Question 19

Warehousing and inventory storage:

A) can either be an internal function or outsourced to a third-party logistics firm.
B) typically has little communication with supply management.
C) may have direct responsibility for organizational purchasing decisions.
D) outsourcing decisions typically are made by the finance department.
E) is seldom outsourced.