Question 1

All of the following are supply management goals EXCEPT:
A)Ensure timely availability of resources.
B)Purchase at the lowest price.
C)Enhance quality.
D)Assess technology and innovation.

Accepted Answer

Purchasing at the lowest price is a common misconception about supply management. While cost savings is important, it is not the only goal of supply management. The other goals include ensuring timely availability of resources, enhancing quality, and assessing technology and innovation.

Question 2

Aspen Corporation has discovered that it uses 10 different suppliers for a particular type of item,has bought 20 different models of that item,and total expenditures last year for the item were $100,000.Aspen most likely is conducting:
A)Supplier audits.
B)Spend analysis.
C)Supplier certification.
D)Make or buy analysis.

Accepted Answer

Aspen Corporation is conducting spend analysis to analyze its spending patterns and identify opportunities for cost reductions. By discovering that they use 10 different suppliers for a particular type of item and buying 20 different models of that item, they can identify opportunities to consolidate suppliers and models to reduce costs. Additionally, the total expenditure on the item is $100,000 which can help Aspen determine if they are receiving a good return on investment for their spending.

Question 3

A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries.What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables?
A)Local,close to its production plant when possible.
B)National,using suppliers within each country.
C)Global,using the same suppliers across the world.
D)Low-cost country sourcing.

Accepted Answer

Using local sourcing strategy for fresh ingredients such as vegetables would ensure that the company is able to tailor its soup recipes to the taste preferences of consumers in each individual country. Local sourcing will allow the company to use regionally available ingredients, potentially reducing costs associated with long distance sourcing and transportation. Additionally, local sourcing supports economic development in the areas where the company operates.

Question 4

In its own country,a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company.This is an example of:
A)Supply chain risk.
B)Sustainability.
C)Insourcing.
D)Strategic sourcing.

Accepted Answer

This situation is an example of supply chain risk, as a former supplier is now a competitor and could potentially disrupt the supply chain for the product that was developed by your company.

Question 5

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low.A recommended sourcing strategy for Jones is to:
A)Use multiple sourcing.
B)Increase efficiencies.
C)Build partnerships.
D)Consolidate purchases.

Accepted Answer

Using multiple sourcing is the best strategy for mitigating the high supply risk and low value purchase. By engaging multiple sources for this item, the company can reduce the impact of any one supplier's failure to deliver or meet quality standards. Additionally, it allows for price comparison and negotiation, ensuring that the company gets the best deal possible for this low-value purchase.

Question 6

Zanda Corp.had outsourced its production to a company located in Asia.Recently it decided to continue to outsource but bring the production back to a company located in the United States.This decision was likely made after Zanda:
A)Conducted a spend analysis.
B)Conducted a make or buy analysis.
C)Examined total cost of ownership.
D)Developed supplier certification processes.

Accepted Answer

Examining the total cost of ownership (TCO) involves looking at all the costs associated with acquiring, operating, and disposing of a system or product. This likely influenced Zanda Corp.'s decision to move production back to the United States, as it would have considered factors beyond just the initial cost, such as shipping, quality, lead time, and potential risks associated with outsourcing overseas.

Question 7

Which of the following is NOT a benefit of outsourcing?
A)Greater flexibility to change technology
B)Better access to market information
C)Lower supply management costs
D)Less capital needed for investment

Accepted Answer

The answer of Which of the following is NOT a...

Question 8

Squeaky Klean,a small consumer products company,purchases custom-designed plastic bottles for its cleaning products that are made at a single plant in Cleveland,Ohio.To make these bottles,specialized tooling must be purchased at a high cost and installed at a supplier's plant.Its sourcing strategy for bottles should be to:
A)Use three or more suppliers.
B)Dual source.
C)Single source.
D)Insource bottle production.

Accepted Answer

Due to the high cost of specialized tooling and the need for custom-designed bottles, it would be most efficient for Squeaky Klean to single source their bottles from the supplier in Cleveland, Ohio. This would allow for consistency in quality and reduce costs associated with tooling and transportation. Using multiple suppliers or dual sourcing could potentially increase costs and quality control issues. Insourcing bottle production would also require significant investment in equipment and resources.

Question 9

Benefits of single sourcing include all of the following EXCEPT:
A)Quantity discounts.
B)More consistent quality.
C)Better supplier relationships.
D)Less supply risk.

Accepted Answer

Single sourcing can increase supply risk because relying on one supplier can make a company vulnerable to supply disruptions. The other options (A, B, C) are benefits of single sourcing, such as potential for quantity discounts, more consistent quality, and better supplier relationships.

Question 10

Outsourcing is often a good choice when:
A)There are only a few suppliers.
B)A product is in the mature phase of the life cycle.
C)Technology is new.
D)The product is critical to a firm's competitiveness.

Accepted Answer

Outsourcing is typically more beneficial for products in the mature phase of their life cycle because these products often have standardized processes and lower innovation rates, making it easier and more cost-effective to outsource their production or support.

Question 11

Which approach is likely to be used for leverage purchases?
A)Purchasing cards
B)Vendor-managed inventory
C)Using executive champions
D)Standardizing purchases

Accepted Answer

Standardizing purchases is a common approach for leverage purchases as it helps in consolidating buying power to negotiate better terms and prices.

Question 12

A relationship with a supplier that is characterized by high levels of distrust,little communication,and short-term transactions is called a(n):
A)Adversarial relationship.
B)Arm's-length relationship.
C)Acceptance of mutual goals.
D)Full partnership.

Accepted Answer

An adversarial relationship with a supplier is characterized by high levels of distrust, little communication, and short-term transactions. This type of relationship is typically focused on getting the best deal possible in the short term, often at the expense of the supplier. It is not a sustainable or mutually beneficial way to do business in the long term.

Question 13

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as:
A)Noncritical.
B)Leverage.
C)Bottleneck.
D)Strategic.

Accepted Answer

Bottleneck items are characterized by their moderate to high risk and low to moderate levels of spend. These items can cause significant disruptions in the supply chain despite their relatively low spend, making them critical to manage effectively.

Question 14

Qualitative factors that should be assessed when making an insourcing/outsourcing decision include all of the following EXCEPT:
A)Compatibility of the supplier's organizational culture and values with your company
B)The importance assigned to the supplier's location
C)The skills and knowledge of the supplier's management team
D)The costs incurred at the start of the contract

Accepted Answer

All of the factors listed (A, B, and C) are important qualitative factors to consider when making an insourcing/outsourcing decision. The only choice that is not a relevant factor is D, as the costs incurred at the start of the contract would be considered a quantitative factor, since it can be measured in dollars and cents.

Question 15

If you are evaluating whether a supplier's workforce is receiving fair wages,you are most likely doing a(n):
A)Spend analysis.
B)Assessment of sustainability.
C)ISO 9000 assessment.
D)Total cost of ownership assessment.

Accepted Answer

Evaluating whether a supplier's workforce is receiving fair wages falls under the category of corporate social responsibility and sustainable sourcing practices. Therefore, the most appropriate assessment to determine this would be an assessment of sustainability.

Question 16

A primary reason for using global suppliers is to:
A)Improve sustainability.
B)Reduce transportation costs.
C)Take advantage of free trade agreements.
D)Work with the same suppliers in many different regions of the world.

Accepted Answer

The answer of A primary reason for using global suppliers...

Question 17

The process of understanding how a firm is spending its money and with which suppliers is called:
A)Strategic sourcing.
B)Make or buy analysis.
C)Market analysis.
D)Spend analysis.

Accepted Answer

Spend analysis is the process of understanding how a firm is spending its money and with which suppliers. Strategic sourcing involves the evaluation and selection of suppliers to meet the purchasing needs of a company. Make or buy analysis is a decision-making process that helps a company determine whether to produce a product or service in-house or outsource it to a third-party vendor. Market analysis involves the gathering and interpretation of data about a particular market to inform business decisions. Therefore, the best choice is D, as it directly relates to the process of understanding a company's expenditures and suppliers.

Question 18

Which of the following is (are)advantage(s)of full partnerships with suppliers,as compared to traditional adversarial relationships? I.They help reduce uncertainties for both buyer and supplier.
II.The full partnership is easier to establish and maintain than other relationships,so more suppliers can be dealt with.
III.The full partnership assures the lowest material price.
A)I only
B)II only
C)III only
D)I and II only
E)II and III only

Accepted Answer

Full partnerships with suppliers help reduce uncertainties for both buyer and supplier by fostering a collaborative relationship focused on long-term benefits rather than short-term gains. This contrasts with adversarial relationships, which often focus on price negotiations at the expense of stability and trust. Full partnerships are not necessarily easier to establish and maintain, as they require significant effort and commitment from both parties. Additionally, while they can lead to cost savings, they do not guarantee the lowest material price, as their focus is on overall value rather than just price.

Question 19

Zanda Corp.is considering trying to develop a full partnership with a particular supplier.This suggests that the item Zanda buys from the supplier is:
A)A noncritical part.
B)A "bottleneck" item.
C)A strategically important part.
D)An item appropriate for a "leverage" strategy.

Accepted Answer

Developing a full partnership with a supplier suggests that the item being bought is strategically important, meaning that the supplier plays a vital role in Zanda's operations or product/service offering.

Question 20

Which of the following would NOT be a step in conducting an insourcing/outsourcing analysis?
A)Assessing quantitative costs of outsourcing
B)Evaluating new suppliers who could make the SKU
C)Assessing the relationship of the product to the firm's core competencies
D)Conducting a detailed internal audit of purchasing practices

Accepted Answer

Conducting a detailed internal audit of purchasing practices is not directly related to the decision of insourcing or outsourcing, which typically involves evaluating costs, suppliers, and alignment with core competencies.

Quiz 8: Lean Systems

All of the following are supply management goals EXCEPT:

Aspen Corporation has discovered that it uses 10 different suppliers for a particular type of item,has bought 20 different models of that item,and total expenditures last year for the item were $100,000.Aspen most likely is conducting:

A global food products company makes soups that are specifically tailored to the tastes of consumers in individual countries.What sourcing strategy is the company likely to use for its fresh ingredients such as vegetables?

In its own country,a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company.This is an example of:

Jones Company has identified an item for which the supply risk is high and the value of the purchase to the firm is low.A recommended sourcing strategy for Jones is to:

Zanda Corp.had outsourced its production to a company located in Asia.Recently it decided to continue to outsource but bring the production back to a company located in the United States.This decision was likely made after Zanda:

Which of the following is NOT a benefit of outsourcing?

Benefits of single sourcing include all of the following EXCEPT:

Outsourcing is often a good choice when:

Which approach is likely to be used for leverage purchases?

A relationship with a supplier that is characterized by high levels of distrust,little communication,and short-term transactions is called a(n) :

Moderate- to high-risk purchases with low to moderate levels of spend are categorized as:

Qualitative factors that should be assessed when making an insourcing/outsourcing decision include all of the following EXCEPT:

If you are evaluating whether a supplier's workforce is receiving fair wages,you are most likely doing a(n) :

A primary reason for using global suppliers is to:

The process of understanding how a firm is spending its money and with which suppliers is called:

Zanda Corp.is considering trying to develop a full partnership with a particular supplier.This suggests that the item Zanda buys from the supplier is:

Which of the following would NOT be a step in conducting an insourcing/outsourcing analysis?