Deck 4: Buying Business Services

Question 1

Which of the following characteristics is a quadrant in the purchasing portfolio approach (Kraljic Portfolio)? 

A) Price. 
B) Frequency of use. 
C) Availability. 
D) Leverage products.

Answer 1

  D

Question 2

Service Level Agreement (SLA) payments to suppliers are commonly based on which of the following? 

A) Actual performance. 
B) Actual performance versus targeted performance. 
C) Targeted performance. 
D) Number of complaints.

Answer 2

  B

Question 3

Which of the following are key performance indicators (KPIs) for a 'Service Level Agreement (SLA)? 

A) Price changes. 
B) Staff/customer ratio. 
C) Service levels. 
D) Profits.

Answer 3

  C

Question 4

Which of the following are key performance indicators (KPIs) for a 'Service Level Agreement (SLA)? 

A) Quality levels 
B) Staff/customer ratio. 
C) Profits. 
D) Volume of business.

Question 5

Which of the following characteristics is a quadrant in the purchasing portfolio approach (Kraljic Portfolio)? 

A) Bottleneck products. 
B) New Products. 
C) Solid products. 
D) Liquid products.

Question 6

Which of the following characteristics differentiates a good from a service? 

A) Price. 
B) Location. 
C) Heterogeneity. 
D) Frequency of use.

Question 7

Which of the following best explains the term 'Service Level Agreement (SLA)? 

A) An agreement specifying starting and finishing times for the service. 
B) A description of the performance which needs to be delivered by the supplier. 
C) A description of the contract value for the provision of a service. 
D) A contractual agreement .

Question 8

Which of the following are not possible under the terms of a Service Level Agreement (SLA)? 

A) Specific rates plus a bonus. 
B) Clear performance targets. 
C) Guaranteed bonuses. 
D) Specific rates minus a penalty.

Question 9

Which of the following characteristics is a quadrant in the purchasing portfolio approach (Kraljic Portfolio)? 

A) New products. 
B) Routine products. 
C) Availability. 
D) Old products.

Question 10

Which of the following characteristics differentiates a good from a service? 

A) Price. 
B) Frequency of use. 
C) Availability. 
D) Simultaneity.

Question 11

Which of the following are key performance indicators (KPIs) for a 'Service Level Agreement (SLA)? 

A) Price changes. 
B) Staff/customer ratio. 
C) Profits. 
D) Costs.

Question 12

Which of the following were traditionally the most purchased services? 

A) Payroll. 
B) Human Resources. 
C) Contract Catering. 
D) Transport.

Question 13

Which of the following is a cause of 'agency problem'? 

A) Sub-contractors failure to meet milestone deadlines. 
B) Conflict of interest between buyer and seller due to engineering and planning problems. 
C) Conflict of interest between buyer and seller due to risk allocation. 
D) Conflict of interest between buyer and seller due to poor quality performance.

Question 14

Which of the following characteristics differentiates a good from a service? 

A) Intangibility. 
B) Price. 
C) Colour. 
D) Frequency of use.

Question 15

Which of the following were traditionally the most purchased services? 

A) Payroll. 
B) Human Resources. 
C) Transport. 
D) Cleaning.

Question 16

Which of the following processes is used to professionalize purchasing for purchasing excellence? 

A) Strategic management processes. 
B) Operational management processes. 
C) Tactical management processes 
D) Risk assessments.

Question 17

Which of the following characteristics is a quadrant in the purchasing portfolio approach (Kraljic Portfolio)? 

A) Gift products. 
B) New products. 
C) Strategic products. 
D) New markets.

Question 18

Which of the following were traditionally the most purchased services? 

A) Security. 
B) Human Resources. 
C) Payroll. 
D) Transport.

Question 19

Which of the following processes is used to professionalize purchasing for purchasing excellence? 

A) Supervisory management processes. 
B) Operational management processes. 
C) Tactical management processes. 
D) Enabling process.

Question 20

Which of the following characteristics differentiates a good from a service? 

A) Price. 
B) Perishability. 
C) Availability. 
D) Frequency of use.

Question 21

Which of the following is an example of a Financial Service? 

A) Buildings maintenance. 
B) Salary administration. 
C) Risk management. 
D) Security.

Question 22

Which of the following is not an example of an outcome specification? 

A) Stakeholder satisfaction. 
B) Materials. 
C) Customer benefits. 
D) Profit contribution.

Question 23

Which of the following is a criterion in the purchasing portfolio approach (Kraljic Portfolio)? 

A) Financial impact. 
B) Existing market share. 
C) Projected market share. 
D) New product availability.

Question 24

Which of the following is not an example of a throughput specification? 

A) Materials. 
B) Work instructions. 
C) Budgets. 
D) Work schedule.

Question 25

Which of the following is not an example of an output specification? 

A) Quality. 
B) On time delivery. 
C) Working capital. 
D) Budgets.

Question 26

Which of the following is an example of a Professional Service? 

A) Buildings maintenance. 
B) Salary administration. 
C) Risk management. 
D) Security.

Question 27

Which of the following is not an example of an input specification? 

A) Materials. 
B) Hours. 
C) Quality. 
D) Equipment hours.

Question 28

Which of the following is an example of a Marketing Service? 

A) Buildings maintenance. 
B) Advertising. 
C) Risk management. 
D) Security.

Question 29

Which of the following is an example of a Facility Service? 

A) Buildings maintenance. 
B) Salary administration. 
C) Risk management. 
D) Security.

Question 30

Which of the following best explains the throughputs that will be expected from the service provider? 

A) The supplier processes needed to produce the service. 
B) The performance of the supplier. 
C) The resources and capabilities of the supplier. 
D) The economic value generated by the service.

Question 31

Which of the following is an example of an Information and Communication Technology (ICT) Service? 

A) Buildings maintenance. 
B) Computer help desk. 
C) Risk management. 
D) Security.

Question 32

Which of the following best explains the outcomes that will be expected as a consequence of the service provided? 

A) The supplier processes needed to produce the service. 
B) The performance of the supplier. 
C) The resources and capabilities of the supplier. 
D) The economic value generated by the service.

Question 33

Which of the following best explains the output that will be expected from the service provided? 

A) The supplier processes needed to produce the service. 
B) The performance of the supplier. 
C) The resources and capabilities of the supplier. 
D) The economic value generated by the service.

Question 34

Which of the following is an example of a Transportation and Distribution Service? 

A) Buildings maintenance. 
B) Warehousing. 
C) Risk management. 
D) Security.

Question 35

Which of the following best explains the inputs that will be used by the service provider? 

A) The supplier processes needed to produce the service. 
B) The performance of the supplier. 
C) The resources and capabilities of the supplier. 
D) The economic value generated by the service.

Question 36

Which of the following best explains 'Business-critical services'? 

A) A service where the suppliers performance will immediately affect end-customer satisfaction. 
B) A service where the suppliers performance does not immediately affect end-customer satisfaction. 
C) Profitable services. 
D) High quality services.

Question 37

Which of the following is a criterion in the purchasing portfolio approach (Kraljic Portfolio)? 

A) Projected market share. 
B) New product availability. 
C) Supply risk. 
D) Existing market share.

Question 38

Which of the following is an example of a Human Resource Service? 

A) Buildings maintenance. 
B) Training and development. 
C) Risk management. 
D) Security.

Question 39

Which of the following is an example of a Technical Service? 

A) Buildings maintenance. 
B) Repair and support services. 
C) Risk management. 
D) Security.

Question 40

Which of the following best explains 'Non-business-critical services'? 

A) Unimportant services. 
B) Less profitable services. 
C) A service where the suppliers performance does not immediately affect end-customer satisfaction. 
D) A service where the suppliers performance will immediately affect end-customer satisfaction.

Question 41

Which of the following could be a consequence of competence problems and friction between the buyer and other departments? 

A) Outsourcing. 
B) A lack of transparency in purchasing decisions. 
C) Overspending on supplies. 
D) Internal departments may prefer to deal directly with the supplier.

Question 42

What of the following activities represent the best thing a buyer can do with internal customers? 

A) Say nothing. 
B) Provide superior transparency in terms of the number of service providers the company works with. 
C) Ignore their input. 
D) Be subjective.

Question 43

Which of the following should be an element in an output specification? 

A) Certificates (and Diplomas) that can be provided by the supplier. 
B) Expertise. 
C) Capacity. 
D) References.

Question 44

Which of the following factors will not be stressed by buyers when purchasing services? 

A) Fair price. 
B) Cost savings potential. 
C) Clear contractual relationships. 
D) Subjectivity

Question 45

At which of the following points can payment be made to a supplier? 

A) When both parties agree about the quality and quantity of the goods delivered. 
B) When the goods or services are delivered. 
C) When the good or services are ordered. 
D) 3 months after the goods or services are delivered.

Question 46

Which of the following internal activities,once outsourced,could commonly result in service provider staff working within the purchaser organization? 

A) Finance activities. 
B) Security services. 
C) Market research. 
D) Cleaning services.

Question 47

What of the following may best describe the key driver for buyers? 

A) Buyers should be professional. 
B) Buyers should be assertive negotiators. 
C) Buyers should be objective. 
D) Buyers should be 'cost-driven'.

Question 48

What of the following may be a consequence of a lack of alignment between the purchasing department and other departments? 

A) Competence problems and friction between the parties may occur. 
B) Profits decline. 
C) Budgets are reduced. 
D) Suppliers go elsewhere.

Question 49

Which of the following are not responsibilities of contract managers? 

A) Selecting the right contract. 
B) Contract negotiation. 
C) Ensuring contract compliance by buyer and seller. 
D) Paying the supplier.

Question 50

Which of the following internal activities,once outsourced,could commonly result in service provider staff working within the purchaser organization? 

A) Finance activities. 
B) Security services. 
C) Market research. 
D) Sales.

Question 51

Which of the following factors will not be stressed by buyers when purchasing services? 

A) Personal relationship. 
B) Cost savings potential. 
C) Clear contractual relationships. 
D) Clear performance expectations.

Question 52

What of the following may best describe the key driver for buyers? 

A) Buyers should be professional. 
B) Buyers should be 'service-driven'. 
C) Buyers should be objective. 
D) Buyers should be aggressive negotiators.

Question 53

Which of the following internal activities,once outsourced,could commonly result in service provider staff working within the purchaser organization? 

A) Finance activities. 
B) Market research. 
C) Catering services. 
D) Sales.

Question 54

Which of the following are potential benefits of critical or key performance indicators? 

A) They facilitate discussions on how to punish sub-standard performance in suppliers. 
B) They allow the application of penalties and incentives in contract to stimulate service providers to perform better. 
C) They provide answers to supply problems. 
D) They inform suppliers.

Question 55

Which of the following activities represent the best thing a buyer can do with internal customers? 

A) Provide superior transparency in terms of the purchasing spend that is related to the services. 
B) Say nothing. 
C) Ignore their input. 
D) Be subjective.

Question 56

Which of the following is not an element in a preliminary pre-qualification? 

A) Operational Processes. 
B) Expertise. 
C) Capacity. 
D) References.

Question 57

What of the following activities represent the best thing a buyer can do with internal customers? 

A) Ignore their views. 
B) Provide superior transparency in terms of the actual quality provided by the suppliers involved. 
C) Say nothing. 
D) Explain that the buyer is the expert.

Question 58

Which of the following internal activities,once outsourced,could result in service provider staff working within the purchaser organization? 

A) Transport and logistics. 
B) Sales. 
C) Finance activities. 
D) Market research.

Question 59

Which of the following should be an element in an input specification? 

A) Certificates (and Diplomas) that can be provided by the supplier. 
B) Expertise. 
C) Capacity. 
D) References.

Question 60

What of the following may be a consequence of a lack of alignment between the purchasing department and other departments? 

A) Competence problems and friction between the parties may occur. 
B) Profits decline. 
C) Budgets are reduced. 
D) Suppliers go elsewhere.

Question 61

Which of the following do not feature in a 'triad' configuration in services delivery? 

A) Suppliers. 
B) Buyers. 
C) Customers. 
D) The Government.