Deck 4: A Portfolio of Relationships

Question 1

A captive buyer is held hostage by a supplier free to switch to another customer.

Answer 1

True

Question 2

The transformation from reactive and mechanical purchasing to proactive procurement and on to SM can be done without top management commitment.

Answer 2

False

Question 3

Systematically selected supply alliances built on institutional trust help organizations complete their evolution to SM.

Answer 3

True

Question 4

Collaborative relationships are typically used for the procurement of non-commodity items and services.

Question 5

Power is at the heart of all business relationships.

Question 6

Prior to the 1980s,most purchasing relationships were reactive.Interaction between vendor and purchasing resulted in outcomes where one's gain would be the other's loss.

Question 7

A collaborative relationship frequently is an appropriate first step on the road to a strategic alliance.

Question 8

A captive supplier makes investments in order to secure a portion of the buyer's business,with no assurance of sufficient business to recoup the investment.

Question 9

Power is a topic that makes people uncomfortable.

Question 10

One of the advantages of transactional relationships is that lower skill levels of procurement personnel are required.

Question 11

The failure to develop and manage institutional trust is the principle reason that so many supply alliances fail.

Question 12

"Collaboration is the new imperative," declares Michael Dell.

Question 13

The fundamental difference between collaborative relationships and supply alliances is the presence of institutional trust in alliances.

Question 14

One of the advantages of transactional relationships is that relatively less purchasing time and effort are required to establish price.

Question 15

Collaborative and alliance relationships tend to result in lower total costs and improve performance of the supply chain.

Question 16

A firm can evolve to SM without any relationships that are built on institutional trust.

Question 17

The transformation from reactive and mechanical purchasing to proactive procurement and on to SM,parallels a similar transformation in relationships between buyers and suppliers.

Question 18

During the late 1980's and early 1990's,"partnerships" became popular.The authors of the textbook argue that there are problems with the term partner.One of the problems given in the text was that the implications of the term "partner" were not well understood.

Question 19

During the late 1980's and early 1990's,"partnerships" became popular.The authors of the textbook argue that there are problems with the term partner.One of the problems given in the text was that legal problems and concerns inevitably arose regarding the term.

Question 20

Successful supply chain management requires the effective and efficient management of a portfolio of relationships.

Question 21

Which of the following is not a transactional relationship characteristic?

A) One of a series of independent deals
B) Costs, data and forecasts are not shared
C) A minimum of purchasing time and energy is required to establish prices
D) Transactional purchases lend themselves to e-procurement
E) Parties work together to develop designs

Question 22

A captive supplier makes investments in order to secure a portion of the buyer's business,but it is given assurance of sufficient business to recoup the investment through legal contracts.

Question 23

Which of the following is not a disadvantage of transactional relationships?

A) Potential for communication difficulties
B) Expediting and monitoring of incoming quality
C) Inflexible when flexibility may be required
D) No inspection needed due to low prices
E) Tend to result in more delivery problems

Question 24

One of the advantages of collaborative relationships is that relatively less purchasing time and effort are required to establish price than in transactional relationships.

Question 25

One of the advantages of collaborative relationships is that lower skill levels of procurement personnel are required.

Question 26

Prior to the 1980s,most purchasing relationships were proactive.

Question 27

Collaborative relationships are typically used for the procurement of commodity items.

Question 28

Which of the following is not one of the three types of buyer supplier relationships presented in the textbook?

A) Transactional
B) Transcendental
C) Collaborative
D) Alliance

Question 29

Which of the following is not a transactional relationship characteristic?

A) Long-term contract
B) An absence of concern
C) One of a series of independent deals
D) Costs, data and forecasts are not shared
E) Price is the focus of the relationship

Question 30

A transactional relationship frequently is an appropriate first step on the road to a strategic alliance.

Question 31

Successful supply chain management requires that all relationships with suppliers be either collaborative or alliances.

Question 32

Collaborative and alliance relationships tend to result in higher total costs for non-commodity products than conducting the same business using transactional relationships.

Question 33

The fundamental difference between collaborative relationships and supply alliances is the presence of cost measurement and information technology in alliances.

Question 34

Researchers Stanley and Pearson found that there are three most important factors in a successful buyer-supplier relationship.Which of the following is not one of the factors?

A) Two-way communication
B) Paying a fair and reasonable price
C) The supplier's responsiveness to supply management's needs
D) Clear product specifications

Question 35

A captive buyer is buyer that uses single sourcing.

Question 36

Institutional trust does not require much management.

Question 37

Which of the following is not a disadvantage of transactional relationships?

A) Lowest Total Cost of Ownership is usually forced out of suppliers
B) Suppliers provide the minimum service required
C) Less effective performance by suppliers
D) Customers are subject to more supply disruptions
E) Supplier is not motivated to invest time and energy development of buyer's products

Question 38

"Greater price competition through the Internet is the new imperative," declares Michael Dell.

Question 39

Since it has become a well-known term and is established in the legal system,the authors of the textbook support the use of the term partner

Question 40

Which of the following is not one of the outcomes that collaborative relationships tend to foster?

A) Longer term contracts
B) Reduction of risk for suppliers
C) Reducing total costs
D) A focus on price
E) Improvement of processes

Question 41

Which of the following is a situation wherein an alliance may be appropriate?

A) High Switching Likelihood with High Switching Costs
B) No Partnership/Alliance-Capable Supplier in the Geographic Area
C) No Hard Savings from Partnership
D) No Internal Customer Buy-In
E) Price is Stable

Question 42

Which of the following is not an attribute of institutional trust?

A) Sharing information is a means of developing trust
B) Based only on institutional integrity
C) Conflict in the relationship is openly addressed
D) Rights, desires, and opinions are considered
E) Firms have mutual goals

Question 43

Which of the following is not an attribute of institutional trust?

A) Recognizes trust has different cultural meanings
B) Both CEO's make a personal investment
C) Senior managers from both firms commit
D) Sharing of information is discouraged
E) Ethical issues are freely brought up without fear

Question 44

Which of the following is not an attribute of institutional trust?

A) Trust exists if it is written into a contract
B) Developed over time
C) Internal trust is developed before external trust
D) Based on individual and institutional integrity
E) It is greater than individual trust.

Question 45

Which of the following is a situation wherein an alliance may be appropriate?

A) Demand is Stable
B) No Partnership/Alliance-Capable Supplier for the Item
C) No Partnership/Alliance-Capable Supplier in the Geographic Area
D) Rapid Technological Change
E) Mismatch of Clock Speed

Question 46

Which of the following statements is not true about trust?

A) Trust is one of the key factors that differentiate the three classes of relationships.
B) The simplest definition of trust according to the textbook is "being confident that the other party will do what it says it will do."
C) Transactional relationships are completely void of trust
D) Some level of trust must be present in all three types of relationships
E) The level of trust increases with collaborative relationships and becomes an essential characteristic with strategic alliances

Question 47

Which of the following is not an attribute of institutional trust?

A) Informal agreements are as good as written
B) Tactical plans are shared, but not strategic plans
C) Both parties are sensitive to the cultural bridge
D) Relationship is adaptable in the face of change
E) Both firms recognize the interdependency

Question 48

Which of the following is not an e-Commerce trap presented in the textbook?

A) Gilding the pig
B) The Magic pill
C) Shooting the moon
D) Supplier equality

Question 49

Which of the following is not an attribute of alliances?

A) Ethics take precedence over expediency
B) Adaptable in the face of change
C) Penalties are used to guide performance
D) Win-win negotiations
E) Executive level commitment

Question 50

Which of the following is not an attribute of institutional trust?

A) It can be developed quickly
B) Trust and relationship are viewed as investments
C) Partners have access to other's strategic plans
D) Relevant costs and forecasts are shared
E) When key individuals leave, fingerprints are left behind that hold the relationships together

Question 51

Which of the following is not one of the outcomes that collaborative relationships tend to foster?

A) Decreased information sharing
B) Increased investment in R & D
C) Increased investment in training
D) Increased investment in equipment
E) Better focus on customer needs

Question 52

Which of the following is a situation wherein an alliance may be appropriate?

A) Price Volatility
B) Synergistic collaborative design opportunities exist
C) Demand Volatility
D) High Switching Likelihood with High Switching Costs
E) No Partnership/Alliance-Capable Supplier for the Item

Question 53

Which of the following is not one of the benefits of supply alliances?

A) Lower total costs
B) Reduced time to market
C) Increased inspection levels
D) Improved technology flow from suppliers
E) Improved continuity of supply

Question 54

Which of the following is a situation wherein an alliance may be appropriate?

A) Supplier Dependency Creation
B) Neglected Areas
C) Suppliers Seeking to Reduce Competition
D) Low Switching Likelihood with Low Switching Costs
E) No leverage from Partnership

Question 55

Developing and managing collaborative relationships require supply professionals that possess the all of the following skills and attitudes except one in the following list.Which skill in the following list is not required?

A) Recognize the benefits of collaboration
B) Ability to identify, obtain and use data
C) Able to work in chaos and uncertainty
D) Agile, flexible, and highly
E) Ability to develop information systems

Question 56

Which of the following is not an attribute of alliances?

A) Continuous improvement
B) Contracts that are difficult to interpret
C) Interdependence and commitment
D) Atmosphere of cooperation
E) Informal interpersonal connections

Question 57

Which of the following is not an action to develop and manage trust?

A) Senior leaders at both firms act as champions
B) A communication system is developed
C) Base negotiations on the zero-sum game
D) Actions to develop and measure trust are created
E) Risks and rewards are addressed openly

Question 58

Which of the following is not an action to develop and manage trust?

A) An inter-firm team is appointed
B) Discussions conducted in an atmosphere of respect
C) A team of attorneys is appointed to manage the relationship
D) Inter-firm team receives guidance and training in the implementation of practices
E) Listening, understanding, time, energy are invested

Question 59

Which of the following is not an attribute of alliances?

A) Internal infrastructures to enhance learning
B) Openness in all areas of the relationship
C) Negotiations result in one winner
D) A living system
E) A shared vision of the future

Question 60

Which of the following is not one of the issues that affect a supplier's assessment of a buying firm?

A) Cash Flow
B) Openness and Approachability
C) Availability
D) Professionalism
E) Gifts and gratuities

Question 61

Which of the following is not an action to develop and manage trust?

A) Hold back critical information from the alliance partner, just in case
B) Negotiation is used as a trust-building opportunity
C) Both firms work together on technology plans
D) Technical personnel from both firms visit the other
E) Contractual relations are designed to enhance trust

Question 62

The Quaker Oats case history demonstrates that in addition to having the trust required to form an alliance:

A) Both parties must have mutual respect
B) Volume quantities must be fixed
C) There is still a need for a comprehensive contract, including such questions and answers as "what if"?
D) It is not necessary to have open book accounting
E) Legal provisions are still necessary

Question 63

Which of the following is not an action to develop and manage trust?

A) Contract relations focus on continuous improvement
B) Team and relationship skills are developed early
C) A contracting philosophy and a legal infrastructure are designed to the relationship
D) Develop multiple backup suppliers to assure continuity of supply
E) Institutional trust is measured and managed