Deck 9: Category Sourcing: Developing Effective Sourcing Strategies

Question 1

Which of the following should be addressed by a category resourcing strategy? 

A) Profitability of suppliers. 
B) Outsourcing potential. 
C) Competitor analysis. 
D) Partnership or competitive relationship.

Answer 1

  D

Question 2

Which of the following should be addressed by a category resourcing strategy? 

A) Single versus multiple sourcing. 
B) Cost versus quality. 
C) Competitor analysis. 
D) Market share of supplier.

Answer 2

  A

Question 3

Which of the following is not an activity required when conducting a feasibility study? 

A) Important legislation that may affect requirements and buying process. 
B) Underlying cost structure and major cost drivers based upon total cost ownership. 
C) Competitor analysis. 
D) Assessment of initial savings that can be made.

Answer 3

  C

Question 4

Which of the following best explains the concept of 'overspecification'? 

A) Technical requirements are imposed on suppliers which are not necessary for the functionality of the product. 
B) Technical requirements are not imposed on suppliers. 
C) Technical requirements are imposed on suppliers and are necessary for the functionality of the product. 
D) Technical requirements are not imposed on suppliers because they are not necessary for the functionality of the product.

Question 5

Which of the following is not a contributor to cost increases? 

A) Materials prices. 
B) Employee salary increases. 
C) Employers' National Insurance contributions. 
D) Customer warranties paid for by the customer.

Question 6

What should a company do to avoid accusations of bribery and corruption? 

A) Encourage personal gifts and presents to decision-takers. 
B) Invite bids from a wide range of suppliers. 
C) Disclose bribery and corruption by competitors. 
D) Introduce a policy on business ethics and integrity.

Question 7

Which of the following best explains 'supplier cartels'? 

A) Agreements between a limited number of suppliers on pricing behaviour and the division of markets. 
B) Agreements between a limited number of purchasers on pricing behaviour and the division of markets. 
C) Agreements between a limited number of suppliers on pricing behaviour. 
D) Agreements between a limited number of suppliers on the division of markets.

Question 8

Which of the following should be addressed by a category resourcing strategy? 

A) Profitability of suppliers. 
B) Global versus local sourcing. 
C) Competitor analysis. 
D) Market share of supplier.

Question 9

Which of the following is an example of a customer relationship tactic? 

A) Personal gifts and presents to decision-takers. 
B) Supplier evaluations. 
C) Competitive tendering. 
D) Buy one get one free offer.

Question 10

Which of the following is not an activity required when conducting a feasibility study? 

A) Definition of categories and sub-categories. 
B) Carry out an overview of current and future purchasing spend. 
C) Most important stakeholders and actors involved. 
D) Sourcing strategy for a certain category.

Question 11

Which of the following is not a factor to be taken into account for cost savings potential purposes? 

A) Customized versus standard supplies. 
B) Modular versus component buying. 
C) Buyer-supplier dependence. 
D) Current retail pricing.

Question 12

Which of the following best explains 'category sourcing plan'? 

A) This identifies the quality strategy for a certain category. 
B) This identifies the sourcing strategy for suppliers. 
C) This identifies the pricing strategy for a certain category. 
D) This identifies the sourcing strategy for a certain category.

Question 13

Which of the following is not an activity required when conducting a feasibility study? 

A) Analysis of current suppliers and how they perform. 
B) Carry out an overview of value chain. 
C) Definition of future company requirements and needs. 
D) Functional and technical specification of purchased products and future needs.

Question 14

Which of the following best explains the concept of the 'French fries principle'? 

A) Price increases are prohibited. 
B) Price increases are automatically passed onto the next in line. 
C) Price increases are automatically passed onto the final customers. 
D) Price increases are negotiated.

Question 15

Which of the following is not an item of IT office supplies expenditure? 

A) Paper. 
B) Printers. 
C) Copier services. 
D) Stationary.

Question 16

Which of the following is not an item of IT infrastructure expenditure? 

A) Sponsorship. 
B) Printers. 
C) Mobile telecom services. 
D) PCs.

Question 17

Which of the following is not an item of marketing and communication expenditure? 

A) Sponsorship. 
B) Promotional items. 
C) Market research. 
D) PCs.

Question 18

Which of the following is a criterion in a category prioritization matrix? 

A) Cost savings potential. 
B) Scope of last tender. 
C) Current profit levels. 
D) Type and age of contract.

Question 19

Which of the following is a criterion in a category prioritization matrix? 

A) Cost savings potential. 
B) Scope of last tender. 
C) Current profit levels. 
D) Ease of implementation.

Question 20

Which of the following is not a factor to be taken into account for cost savings potential purposes? 

A) Number of suppliers involved in last tender. 
B) Scope of last tender. 
C) Current profit levels. 
D) Type and age of contract.

Question 21

Which of the following is not an element in the definition of a 'partner'? 

A) An ongoing buyer-seller relationship. 
B) A commitment over an extended period of time. 
C) A mutual sharing of information. 
D) A sharing of risks only.

Question 22

Which of the following best explains 'contract buying'? 

A) Bought at last year's price. 
B) Bought at possible future price. 
C) Buying at current market prices. 
D) Bought at previously agreed price.

Question 23

Which of the following explains the abbreviation 'KPI'? 

A) Kanban purchasing inventory. 
B) Key planning initiative. 
C) Key performance indicator. 
D) Knowledge promotes innovation.

Question 24

Which of the following explains the abbreviation 'RFI'? 

A) Recent financial information. 
B) Repairs for inspection. 
C) Request for information. 
D) Return for Incineration.

Question 25

Which of the following best explains 'a mandate from senior management'? 

A) Clear guidance on the scope of the authority delegated to the sourcing team. 
B) Legal contractual provisions. 
C) A draft contract. 
D) A requirement from senior management.

Question 26

Which of the following is not an element in a category sourcing plan? 

A) Objectives sourcing strategy (measurable results). 
B) Commodity sourcing strategy. 
C) Planning of activities. 
D) Evaluation of customer satisfaction levels.

Question 27

Which of the following is not a stage of category sourcing? 

A) Category identification. 
B) Category planning. 
C) Category sourcing. 
D) Category implementation.

Question 28

Which of the following is not an aspect in the changing nature of buyer-supplier relationships over time? 

A) Time horizon. 
B) Complaints. 
C) Logistics. 
D) Quality.

Question 29

Which of the following is not a potential consequence of category sourcing? 

A) Material cost savings. 
B) Increased profits. 
C) Reduction of working capital. 
D) Reduction of transaction costs.

Question 30

Which of the following should be addressed by a contract strategy? 

A) Price agreement versus performance agreement. 
B) Outsourcing potential. 
C) Competitor analysis. 
D) Currency of transactions.

Question 31

Which of the following is not an element in a category sourcing plan? 

A) Summary of expected results and costs. 
B) Business strategy and business issues. 
C) Analysis of historical data. 
D) Current market share of suppliers.

Question 32

Which of the following should be addressed by a contract strategy? 

A) Profitability of suppliers. 
B) Outsourcing potential. 
C) Competitor analysis. 
D) Buying on contract or buying on spot.

Question 33

Which of the following is not an element in a category sourcing plan? 

A) Category identification. 
B) Business strategy and business issues. 
C) Analysis of historical data. 
D) Customer requirements and purchasing process.

Question 34

Which of the following is not a step in a process for driving down purchasing expenditure? 

A) Check contracts currently in place with suppliers. 
B) Find the best possible contract for the company's needs. 
C) Develop the best possible solution in close collaboration with the selected, best-in-class supplier. 
D) Accept the supplier's first price.

Question 35

Which of the following is not a potential benefit of partnerships in logistics? 

A) Anticipation of future requirements. 
B) Increased profits. 
C) Higher levels of service. 
D) Lower logistics costs.

Question 36

Which of the following would not be contained in the 'bid package'? 

A) Buyer's purchasing requirements. 
B) Recent financial projections. 
C) A draft contract. 
D) Bid submission instructions.

Question 37

Which of the following best explains 'vendor rating schedules'? 

A) Reports on the achievements of suppliers. 
B) Simple ranking of suppliers. 
C) Independent assessment of suppliers by a consultant. 
D) Ratings of vendors by other organisations.

Question 38

Which of the following is not a potential benefit of partnerships in product and supply chain costs? 

A) Time-to-market reduction. 
B) Reduction in materials costs. 
C) Reduction in labour costs. 
D) Reduction in process costs.

Question 39

Which of the following best explains 'spot buying'? 

A) Bought at last year's price. 
B) Bought at possible future price. 
C) Buying at current market prices. 
D) Bought at previously agree price.

Question 40

Which of the following explains the abbreviation 'RFP'? 

A) Request for proposal. 
B) Recent financial projections. 
C) Request for partnership. 
D) Return for packaging.

Question 41

Which of the following term best describes the relationship characteristic of a supply partner? 

A) Operational. 
B) Strategic. 
C) Tactical. 
D) Reflective.

Question 42

Which of the following term best describes the price relationship characteristic of a supply partner? 

A) Price + rebate. 
B) Price based on open calculation. 
C) Price + cost-reduction targets. 
D) Price.

Question 43

Which of the following term best describes the quality control relationship characteristic of a preferred supplier? 

A) Quality control by producer and supplier. 
B) Quality assessment by supplier. 
C) Quality control by producer. 
D) Quality assessment by designer (design quality).

Question 44

Which of the following would not be an item in the 'Planning of activities' contents of a category sourcing plan? 

A) Bid comparisons and negotiations. 
B) Customer requirements and purchasing process. 
C) Communication and contract reviews. 
D) Spend and supply market analysis.

Question 45

Which of the following is a time horizon for a design partner relationship? 

A) Order to order. 
B) 1 year. 
C) 1-3 years. 
D) 1-5 years.

Question 46

Which of the following would not be an item in the 'Objectives sourcing strategy' contents of a category sourcing plan? 

A) Cost reduction. 
B) Innovation. 
C) Quality improvement. 
D) Team composition.

Question 47

Which of the following would not be an item in the 'Business strategy and business issues' contents of a category sourcing plan? 

A) Business goals and issues. 
B) Business priorities. 
C) Important stakeholders. 
D) Innovation.

Question 48

Which of the following term best describes the logistics relationship characteristic of a supplier? 

A) Periodic scheduling of materials required by producer. 
B) Electronic document interchange. 
C) Annual agreements. 
D) Orders.

Question 49

Which of the following would not be an item in the 'Objectives sourcing strategy' contents of a category sourcing plan? 

A) Cost reduction. 
B) Innovation. 
C) Quality improvement. 
D) Current suppliers.

Question 50

Which of the following term best describes the contractual relationship characteristic of a preferred supplier? 

A) Quality agreement. 
B) Annual agreement (1 year). 
C) Design contract. 
D) Order to order.

Question 51

Which of the following would not be an item in the 'Planning of activities' contents of a category sourcing plan? 

A) Bid comparisons and negotiations. 
B) Targeted number of suppliers. 
C) Communication and contract reviews. 
D) Spend and supply market analysis.

Question 52

Which of the following is not an item of marketing and communication expenditure? 

A) Sponsorship. 
B) Promotional items. 
C) Market research. 
D) Raw materials.

Question 53

Which of the following is not an item of IT office supplies expenditure? 

A) Paper. 
B) Travel. 
C) Copier services. 
D) Stationary.

Question 54

Which of the following would not be an item in the 'Business strategy and business issues' contents of a category sourcing plan? 

A) Business goals and issues. 
B) Business priorities. 
C) Important stakeholders. 
D) Current suppliers.

Question 55

Which of the following would not be an item in the 'Analysis of historical data' contents of a category sourcing plan? 

A) Price and cost analysis. 
B) Supply market analysis. 
C) Important stakeholders. 
D) Current suppliers.

Question 56

Which of the following would not be an item in the 'Analysis of historical data' contents of a category sourcing plan? 

A) Price and cost analysis. 
B) Supply market analysis. 
C) Business priorities. 
D) Current suppliers.

Question 57

Which of the following is not an item of IT infrastructure expenditure? 

A) White paper. 
B) Printers. 
C) Mobile telecom services. 
D) PCs.

Question 58

Which of the following would not be an item in the 'Commodity sourcing strategy' contents of a category sourcing plan? 

A) Summary of expected results and costs. 
B) Targeted number of suppliers. 
C) Location of suppliers. 
D) Type of preferred contract.

Question 59

Which of the following is not an item of marketing and communication expenditure? 

A) Sponsorship. 
B) Promotional items. 
C) Market research. 
D) Hotels and conferences.

Question 60

Which of the following would not be an item in the 'Commodity sourcing strategy' contents of a category sourcing plan? 

A) Inventory reduction. 
B) Targeted number of suppliers. 
C) Location of suppliers. 
D) Type of preferred contract.

Question 61

Which of the following is not an item of IT office supplies expenditure? 

A) Paper. 
B) Cleaning services. 
C) Copier services. 
D) Stationary.

Question 62

Which of the following is not an item of IT infrastructure expenditure? 

A) Interior decorating. 
B) Printers. 
C) Mobile telecom services. 
D) PCs.