Deck 5: Sourcing Materials and Services

Question 1

In the Item Procurement Importance Matrix, what item is described as low risk, low value?

A) Generics
B) Commodities
C) Criticals
D) Distinctives

Answer 1

A

Question 2

Procurement serves as a critical link between members of the supply chain.

Answer 2

True

Question 3

Landed costs are independent of sales/FOB terms.

Answer 3

False

Question 4

The first step in managing sourcing and procurement is to determine the type of purchase.

Question 5

Which approach represents a strategy in which the entire organization is focused on the examination of process variability and continuous improvement?

A) Total Quality Management
B) Six Sigma
C) Lean Enterprise Management
D) Theory of Constraints
E) None of these answers

Question 6

e-Sourcing and e-procurement are the same.

Question 7

In the Assess Supply Market step, the firm:

A) determines which are the least cost vendors.
B) decides which vendors are located closest to the firm's plant to insure timely delivery.
C) identifies all possible suppliers that might be able to satisfy the user's needs.
D) defines the parameters of the sourcing strategy process.

Question 8

When a firm makes a "make" decision when analyzing whether to "make or buy," they may still have to purchase some types of inputs from outside suppliers.

Question 9

Which of these is not a form of purchasing?

A) Purchasing
B) Procurement
C) Process improvement
D) Sourcing

Question 10

Commodities are items or services that are low in risk but high in value.

Question 11

Strategic sourcing as a process is far more broad and comprehensive than procurement. Overall, the process starts with the formation of a:

A) steering committee.
B) list of vendors.
C) decision as whether to make or buy.
D) list of criticals.

Question 12

Distinctives are low-risk, high-value items that are fundamental to the company's finished product.

Question 13

An advantage of e-sourcing and e-procurement is that there is little risk involved.

Question 14

Vendors may offer varying levels of discounts from their published prices.

Question 15

Strategic sourcing is almost the same as procurement.

Question 16

In the Item Procurement Importance Matrix, what describes high risk, low value?

A) Generics
B) Commodities
C) Criticals
D) Distinctives

Question 17

There are seven steps in the Strategic Sourcing Methodology.

Question 18

Some firms are moving towards increasing their number of suppliers in order to encourage competition and lower procurement costs.

Question 19

In the Item Procurement Importance Matrix, what is described as high risk, high value?

A) Generics
B) Commodities
C) Criticals
D) Distinctives

Question 20

The most important factor in vendor selection is usually financial health.

Question 21

There are three definitions to aid understanding of some of the similarities, differences, and linkages between purchasing, procurement, and strategic sourcing. Define them, and discuss the differences between the three.

Question 22

Which e-commerce business model used in procurement and sourcing has a seller-operated service that consists of a number of electronic catalogs from suppliers within a market?

A) Sell-side system
B) Electronic marketplace
C) Buy-side systems
D) Online trading community
E) None of these answers

Question 23

For the buyer, the total procurement price is more than just the basic purchase price. There are other elements to consider. Name these elements, and discuss the primary considerations of each.

Question 24

Define and discuss the four basic types of e-commerce business models used in procurement and sourcing.

Question 25

There are seven steps in the Strategic Sourcing Methodology. Name at least five, and choose two to discuss in more detail.

Question 26

What vendor selection criteria are described by vendor attitude, cultural compatibility, training aids, packaging, and repair service?

A) Quality
B) Financial considerations
C) Reliability
D) Desirable capabilities

Question 27

To help guide the strategic sourcing process, five core principles are recognized as key drivers to achieve the desired levels of value, which one is not one of those core principles?

A) Access the total value
B) Develop individual sourcing strategies
C) Evaluate internal requirements
D) Drive continuous savings

Question 28

There are four steps in the Managing Sourcing and Procurement Processes. Which of the following is not one of them?

A) Determine the type of purchase
B) Determine the necessary levels of investment
C) Evaluate the effectiveness of the strategic sourcing process
D) Examine off shore and e-procurement suppliers

Question 29

What are at least three types of certifications and registrations, what do they signify, and why are they important?

Question 30

There are four types of products and services that are purchased with varying degrees of importance. Name all four, and choose two to discuss in terms of risk and value.

Question 31

The concept that represents the sum of all costs associated with making and delivering products to the point where they are needed is called:

A) purchase/acquisition cost.
B) strategic sourcing costs.
C) life cycle costs.
D) total landed cost.

Question 32

What vendor selection criteria are described by price and financial stability?

A) Capability
B) Financial
C) Quality
D) Reliability

Question 33

What is an amalgam of catalogs from vendors within a market that is available via the Internet called?

A) Electronic marketplace
B) Buy-side system
C) Sell-side system
D) On-line trading community

Question 34

What vendor selection criteria are described by production capability, labor relations, and operating controls?

A) Capability
B) Quality
C) Reliability
D) Financial

Question 35

Name several criteria that are important in vendor selection. Which one is the most important?

Question 36

In the Execute Sourcing Strategy step, the most important thing is to:

A) appoint the sourcing committee members from the affected groups.
B) choose a supplier or suppliers, depending on the objectives of the sourcing decision.
C) verify which vendors are either TQM or ISO 9000.
D) determine which vendors have the lowest prices.