Deck 4: Ethical and Sustainable Sourcing

Question 1

It is important for firms to addresses the impact of ethical and sustainable sourcing on other facets of the organization and its trading partners.

Answer 1

True

Question 2

There are just a small number of resources available for firms seeking to learn about and implement successful sourcing practices.

Answer 2

False

Question 3

There are two approaches to deciding whether or not an action is ethical.The first approach is utilitarianism.The second approach is rights and duties.

Answer 3

True

Question 4

Functional products are characterized by low profit margins, relatively stable demands, and high levels of competition.

Question 5

Companies outsource to help them reach their sustainability goals.

Question 6

Reverse logistics has become an important trend in ethical and sustainable sourcing.

Question 7

Environmental supplier certifications can be used to identify rogue suppliers before they can cause problems.

Question 8

Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management.

Question 9

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.

Question 10

It is considered unethical for a firm to intentionally buy from women-owned businesses.

Question 11

Sustainable sourcing practices include promoting diversity by intentionally buying from ethnic minority businesses.

Question 12

A practice aimed at ensuring that purchased products or materials meet environmental objectives of the organization is referred to as green purchasing.

Question 13

The use of ethical and environmental certifications for suppliers is decreasing.

Question 14

Sustainable sourcing takes into account the long-term impact on people, profits, and the planet.

Question 15

Benchmarking is the practice of watching the mistakes other businesses do and trying to avoid the same mistakes.

Question 16

As described in the text, a "fair trade product" refers to selling and purchasing products without a cash transaction.

Question 17

Developing a collaborative negotiation infrastructure includes four steps: build a preparation process, develop a negotiation database, design a negotiation launch process, and institute a feedback mechanism.

Question 18

Rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program.

Question 19

Creating strategic supplier alliances benefits firms by increasing the performance and value of suppliers as well as increasing brand awareness.

Question 20

Ethical sourcing policies should NOT include determining where all purchased goods come from and how they are made.

Question 21

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT:

A) Global population growth
B) Increasing environmental awareness
C) Legislation requiring corporate ethical and sustainable sourcing
D) Consumers' desires for better corporate responsibility

Question 22

Firms assess their sourcing capabilities because the sourcing function is one of the most value-enhancing functions in an organization.

Question 23

Sustainable sourcing policies should include which of the following?

A) Use of minority workers
B) Fair working conditions
C) Use of renewable energy
D) Use of child labor

Question 24

______________ considers the public consequences of organizational buying.

A) The bullwhip effect
B) Ethical sourcing
C) Benchmarking
D) Vendor managed inventory

Question 25

A service where key customers ask suppliers to take on the job of store level replenishment planning is called:

A) Vendor managed inventory
B) Early supplier involvement scheduling
C) Strategic inventory planning
D) Purchase spend reduction forecasting

Question 26

Promoting diversity by intentionally buying from small firms or ethnic minority businesses is an example of:

A) Supply base rationalization
B) Ethical sourcing
C) Sustainable sourcing
D) Supply base sourcing

Question 27

The use of environmental supplier certification programs assists companies by which of the following?

A) Identifying strategic alliance candidates
B) Identifying companies who are the most popular with consumers
C) Helping communities who are in jeopardy of plant closures
D) All of the above

Question 28

Convincing your supplier to cutting back on packaging, fuel, or electricity is an example of:

A) Ethical sourcing
B) Sole sourcing
C) Sustainable sourcing
D) Global sourcing

Question 29

It is best for firms to learn through their own experiences the methods and tools that work the best, rather than benchmarking.

Question 30

The purchasing department at Big Horn Sheep Corporation decided to intentionally increase purchases from small, underdeveloped nations.This decision can be considered:

A) Illegal
B) Unethical
C) Utilitarianism
D) Ethical Sourcing

Question 31

The Ethical Trading Initiative (ETI) does NOT include which of the following:

A) Workers receive a 30 minute break for an 8 hour shift
B) Working hours are not excessive
C) Regular employment is provided
D) Freedom of association and the right to collective bargaining are respected

Question 32

In designing an ethical and sustainable strategy a firm might make use of which of the following?

A) Hire more supervisors to address problems quickly
B) Use performance measures to identify weaknesses
C) Create many short term relationships with suppliers
D) All of these

Question 33

Leading companies practicing sustainable sourcing and seeking to reduce costs would NOT use which of the following strategies?

A) Backward integration to purchase suppliers
B) Increase resource efficiencies
C) Avoid use of noncompliant suppliers
D) Rethink transportation and distribution systems

Question 34

A fair trade product refers to one that is manufactured or grown by a disadvantaged producer in a developing country that receives for its goods.

A) Bitcoin
B) A fair price
C) An imported product
D) Freedom of association

Question 35

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework?

A) Establish corporate ethical and sustainable sourcing policies
B) Certify suppliers as ISO 9001 compliant
C) Develop a performance measurement system
D) Prioritize items based on ethical and sustainability opportunities and ease of implementation.

Question 36

Which of the following terms refers to an act that creates the greatest good for the greatest number of people:

A) Rights and duties
B) Corporate responsibility
C) Social sustainability
D) Utilitarianism

Question 37

Sustainability reporting is ______________ for American companies:

A) Required in the U.S.
B) Mandated quarterly
C) Required every 3 years
D) Largely a voluntary effort

Question 38

Criteria to evaluate a purchasing department's performance should include both quantitative and qualitative assessments.

Question 39

Some businesses refer to sustainability in terms of supporting the three P's.This stands for:

A) People, place, price
B) Place, price, promotion
C) People, planet, profit
D) Planet, people, price

Question 40

Which of the following is a trend in ethical and sustainable sourcing?

A) Using suppliers who are reducing their carbon footprint
B) Discontinuing purchases from firms that use unacceptable labor practices
C) Reducing the number of delivery miles traveled
D) All of these

Question 41

Benchmarking is:

A) A system of performance metrics that seeks to motivate suppliers to perform better.
B) A practice where companies attempt to learn and apply the best practices of other companies.
C) A system of marking defective inbound inventory so it can quickly be identified for return to the supplier.
D) A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

Question 42

For a large company with many strategic supplier alliances, what would be the best way to manage them?

A) Create an alliance board to oversee alliances
B) Reduce the number of supplier alliances to less than five
C) Hire an outside firm to manage them
D) All of the above

Question 43

One standard which is measured in environmental supplier certification is:

A) The number of trucks owned by the supplier
B) Technology investment by the supplier
C) The suppliers' recycled content
D) The number of on-time deliveries

Question 44

Describe THREE important steps in organizing and managing a successful strategic alliance program.

Question 45

ISO 14000 may play a role in a firm's.

A) Manufacturing flexibility program
B) Supplier certification program
C) Customer certification program
D) Negotiated pricing program

Question 46

Which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance?

A) Improving time to market
B) Lowering inventory turnover rates
C) Participating in value engineering/value analysis efforts
D) Creating supplier alliances

Question 47

Successful strategic supplier alliances can result in which of the following?

A) Better market penetration.
B) Access to new technologies and knowledge
C) Higher return on investment
D) All of these

Question 48

Purchasing goods from suppliers in developing countries be risky.Why might this be risky? How can firms reduce this risk?

Question 49

As relationships with suppliers become more trusted, reliable, and long-term in nature, early supplier involvement has become a popular strategy among firms.Explain THREE benefits gained from using this strategy.

Question 50

Which of the following can be used as a punishment for suppliers that perform poorly?

A) Elimination of future business with the focal firm
B) Downgrade the supplier's status
C) Billback penalty
D) All of these

Question 51

Which of the following is NOT a typical strategy for firms to obtain benchmarking data about other companies?

A) Discussing sourcing strategies with colleagues at business association meetings
B) Hiring former employees from other companies and assessing their knowledge
C) Utilizing resources from the Center for Advanced Purchasing Studies
D) Collecting published trade information on benchmarking studies

Question 52

Which of the following is true of today's purchasing staff members?

A) They are viewed as strategic internal suppliers of the organization
B) They are expected to generate cost savings for the organization
C) They are expected to generate service and quality enhancements for the organization
D) All the above

Question 53

The main benefit(s) from benchmarking sourcing practices is/are:

A) Savings in energy consumption and materials, lower distribution costs, and improved corporate image among regulators, customers and community.
B) Lower prices of goods and services, use of fewer buyers and lower administrative costs
C) Larger market for products, economies of scale in purchasing and production, and lower labor costs.
D) Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies.

Question 54

A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as:

A) Distributive negotiations
B) Win-win negotiations
C) Optimal review period
D) DMAIC improvement cycle

Question 55

Service companies like beauty parlors, cleaning companies and delivery companies are also becoming aware of the trends in ethical and sustainable sourcing.Describe FOUR ways a service company can use ethical and sustainable sourcing.Provide an example of how this can happen.

Question 56

Why do firms assess their sourcing capabilities?

A) They are looking for ways to reduce their employee headcount
B) They can easily spot suppliers who are not practicing sustainable sourcing practices
C) They can gauge their success in improving their own value-enhancing contributions to the firm
D) All of the above

Question 57

Sustainable sourcing is a rather common practice among firms in many industries.What are THREE possible benefits companies practicing sustainable sourcing seek to achieve:

Question 58

What is the purpose of supplier certification programs? Describe a certification program that would help companies who are looking for ethical and sustainable suppliers.

Question 59

Which of the following could be an ethical and environmental certification requirement?

A) Forest Stewardship Council (FSC) certification
B) Energy Star certification
C) Fair Trade certification
D) All of these

Question 60

Which of the following is TRUE?

A) VMI stands for Vertically Managed Inventory
B) 3PL stands for Third Party Leverage
C) VMI stands for Vendor Managed Inventory
D) 3PL stands for Three Point Logistics

Question 61

Home Depot is a retail leader in selling home improvement tools and materials.Home Depot wants to become more environmentally conscious.
Answer the following series of questions in an effort to develop a plan that will guide Home Depot executives into transforming Home Depot into a sustainable organization through green sourcing.
a.Define sustainability.
b.Outline a set of goals (FOUR) that would lead Home Depot down a sustainable path.
c.How do these goals make sense from both a financial and environmental perspective?
d.What are some ways supplier managers can aid in achieving these goals?

Question 62

Explain why sourcing practices are benchmarked.Provide TWO examples of resources available for firms seeking to implement successful sourcing practices.

Question 63

Answer the following 3 questions:
a.Why would a firm want to assess their sourcing capabilities?
b.List FIVE assessment criteria to evaluate the purchasing department's performance.
c.What kind of performance tool can be used to assess the criteria listed?