Question 1

Single sourcing consolidates purchase volume with a single supplier in hopes of increasing cooperation and communication in the supply relationship as well as ____.

Accepted Answer

Single sourcing consolidates purchase volume, leading to economies of scale, which help in lowering the costs per unit.

Question 2

Procurement costs often range between ____ of an organization's revenues.

Accepted Answer

Procurement costs often range between 60-80% of an organization's revenues.

Question 3

A degree of aggressive procurement involvement not normally encountered in supplier selection refers to ____.

Accepted Answer

Aggressive procurement involvement in supplier selection usually refers to supplier development, which involves working closely with suppliers to improve their capabilities, processes, and quality to meet the purchasing organization's needs. This level of involvement is not typically seen in supply management or material management, and physical supply refers to the actual movement and delivery of goods.

Question 4

Which of the following is not a reason for why purchasers are adopting a more proactive and aggressive role in the procurement process?

Accepted Answer

An excess number of suppliers does not inherently drive purchasers to be more proactive; rather, it is inefficiencies, competitive advantage, and knowledge of benefits that motivate such behavior.

Question 5

____ refers to the raw materials, component parts, and supplies bought from outside organizations to support a company's operations.

Accepted Answer

Procurement refers to the process of acquiring raw materials, component parts, and supplies from external sources to support a company's operations.

Question 6

Supplier development is synonymous with ____.

Accepted Answer

Supplier development is synonymous with reverse marketing, where the buyer helps to improve the supplier's capabilities or operations, often to ensure a more reliable supply chain or better quality products. This contrasts with traditional procurement or selection processes, which focus more on choosing suppliers based on existing capabilities.

Question 7

Which of the following is not a category associated with Kraljic's Portfolio Matrix?

Accepted Answer

All the options listed (bottleneck, leverage, noncritical, and strategic) are categories associated with Kraljic's Portfolio Matrix.

Question 8

Multiple sourcing uses more than one supplier in hopes of increased competition, improved market intelligence, and ____

Accepted Answer

Multiple sourcing helps mitigate supply risk by spreading the procurement across multiple suppliers. While multiple sourcing can potentially lower costs per unit and increase cooperation, these outcomes are not guaranteed and can vary depending on the specific circumstances. Increased communication is not necessarily a direct outcome of multiple sourcing.

Question 9

Procurement's historical focus in many organizations was to ____.

Accepted Answer

The historical focus of procurement in many organizations was to achieve the lowest possible cost.

Question 10

A focus on satisfying internal customers is associated with which procurement objective?

Accepted Answer

Supporting operational requirements involves ensuring that internal customers have the goods and services they need to operate effectively. This includes timely procurement and delivery of products and services to meet internal demand.

Question 11

Which of the following is not a potential challenge of using procurement cards (p-cards) in non-domestic markets?

Accepted Answer

All the options listed (currency differences, cultural issues, difference in card acceptance policies, and availability of technology) are potential challenges when using procurement cards in non-domestic markets.

Question 12

Which of the following is not a potential procurement objective?

Accepted Answer

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

Question 13

Which of the following is not a potential benefit associated with procurement cards (p-cards)?

Accepted Answer

P-cards cannot be used in non-domestic markets.

Question 14

Buying the right products, at the right price, from the right source, at the right specifications, in the right quantity, for delivery at the right time to the right internal customer is associated with what procurement objective?

Accepted Answer

This procurement objective is about supporting operational requirements by ensuring that all necessary products and services are available to meet the organization's operational needs efficiently.

Question 15

The text outlines a supplier selection and evaluation process that consists of ____ steps.

Accepted Answer

The answer of The text outlines a supplier selection and...

Question 16

Procurement and ____ are viewed as synonymous terms.

Accepted Answer

Procurement and purchasing are typically used interchangeably to refer to the process of acquiring goods and services from external sources. Materials management and inbound logistics are related concepts, but they refer specifically to the management of materials and goods as they flow through the supply chain, rather than the process of acquiring them. Supply management is a broader term that encompasses procurement/purchasing as well as other related activities such as supplier relationship management and supply chain risk management.

Question 17

Which of the following statements is false?

Accepted Answer

Selecting suppliers is not the final step; it is part of an ongoing process that includes evaluation and continuous improvement.

Question 18

What is the final step in the supplier selection and evaluation process?

Accepted Answer

Evaluating the decision is the final step to ensure the selected supplier meets the required standards and expectations.

Question 19

With respect to the supplier selection and evaluation process, ____ looks at both the internal and external environment within which the supply decision is to be made.

Accepted Answer

Situation analysis involves examining both the internal and external environments to understand the context in which supply decisions are made.

Question 20

Kraljic's Portfolio Matrix ____.

Accepted Answer

Kraljic's Portfolio Matrix is a tool used by managers to classify corporate purchases based on their importance to the company and the complexity of their supply chain. It helps managers make decisions about how to best manage different types of purchases and suppliers. It does not specifically relate to warehousing decisions, adding product lines, or the total cost of ownership.

Quiz 6: Procurement