Question 1

According to Porter, a firm's value chain is composed of primary and support activities that can lead to competitive advantage when configured properly.

Accepted Answer

Porter's value chain model identifies primary activities such as inbound logistics, operations, outbound logistics, marketing and sales, and service, as well as support activities including procurement, technology, human resources, and infrastructure. When these activities are configured properly, they can lead to competitive advantage for a firm.

Question 2

The development of strategic purchasing practices can only help a company maintain its competitive position in a rapidly changing business environment.

Accepted Answer

Strategic purchasing practices not only help maintain a competitive position but can also enhance efficiency, reduce costs, improve quality, and foster innovation, contributing to a stronger competitive advantage.

Question 3

Competition today is no longer between firms; it is between the supply chains of those firms.

Accepted Answer

This statement is true as supply chain management plays a crucial role in the success of a firm and its ability to compete in the market. A well-managed supply chain can reduce costs, increase efficiency, and improve delivery times, giving a firm a competitive advantage over its competitors. In today's globalized economy, firms are not just competing against each other, but also competing against the supply chains of their rivals.

Question 4

The routine ordering and follow-up of basic operational supplies is a strategic responsibility.

Accepted Answer

The routine ordering and follow-up of basic operational supplies is an administrative responsibility, not a strategic responsibility.

Question 5

The traditional approach to purchasing and supply management is to build relations with suppliers to jointly pull costs out of the product or service and expect suppliers to contribute innovate ideas that continually add value to a firm's products and services.

Accepted Answer

The traditional approach to purchasing and supply management often focused on cost minimization and transactional relationships with suppliers, rather than building long-term partnerships for joint innovation and value addition.

Question 6

Formal organizational charts portray the entirety of the workings of an organization.

Accepted Answer

Formal organizational charts typically depict the formal structure and hierarchy of an organization, but they do not necessarily capture all aspects of how the organization operates.

Question 7

Distribution management involves the management of packaging, storing, and handling of materials at receiving docks, warehouses, and retail outlets.

Accepted Answer

Distribution management includes all aspects of planning, organizing, and controlling the flow of goods from the point of origin to the point of consumption, including packaging, storage, and handling.

Question 8

In the manufacturing sector, the percentage of purchases to sales averages 55 percent.

Accepted Answer

This statement is generally true. In the manufacturing sector, the cost of goods sold (which includes purchases of materials, labor, and other costs related to production) typically represents 55 percent or more of total sales. However, the exact percentage may vary depending on the specific industry, company, and other factors.

Question 9

Cost management is no longer an integral part of purchasing and supply chain management.

Accepted Answer

Cost management is still an essential part of purchasing and supply chain management. It involves finding ways to reduce costs throughout the supply chain, including negotiating prices with suppliers, optimizing inventory levels, and improving efficiency in transportation and other logistics activities. Effective cost management can lead to significant cost savings and increased profitability for a company.

Question 10

Today's emphasis on supplier quality has shifted from detecting defects at the time of receipt or use to prevention early in the materials-sourcing process.

Accepted Answer

This statement is true. The focus is now on preventing defects in the materials-sourcing process rather than detecting them later on.

Question 11

Supply chain management does not require the coordination of activities and flows that do not extend across boundaries.

Accepted Answer

Supply chain management involves the coordination of activities and flows across multiple boundaries, including between different organizations and functions within an organization.

Question 12

Purchasing and supply management has a major impact on product and service quality.

Accepted Answer

Purchasing and supply management involves selecting and working with suppliers to obtain the necessary materials and goods for production. The quality of these materials and goods can greatly impact the overall quality of the final product or service. Therefore, effective purchasing and supply management is critical for ensuring high-quality products and services.

Question 13

Purchasing is becoming less responsible for sourcing indirect goods and services required by internal groups.

Accepted Answer

Purchasing departments are increasingly responsible for sourcing not only direct materials but also indirect goods and services, as organizations recognize the importance of managing these expenditures to optimize costs and efficiency.

Question 14

Supply management is a broader concept than purchasing.

Accepted Answer

Supply management includes activities beyond just purchasing, such as forecasting demand, inventory management, supplier relationship management, and logistics management.

Question 15

An abundance of competitors and choices have conditioned customers to want higher quality, faster delivery, and products and services tailored to their individual needs at a higher total cost.

Accepted Answer

Customers typically desire higher quality, faster delivery, and products and services tailored to their individual needs, but they often want these benefits at a lower total cost, not higher. The competitive market usually drives prices down and quality up.

Question 16

Most of the features that make their way into final products originate with suppliers.

Accepted Answer

The answer of Most of the features that make their...

Question 17

Global sourcing is a requirement and no longer a luxury for most firms.

Accepted Answer

With increasing globalization and competition, firms need to look for cost-efficient and high-quality suppliers from all over the world in order to stay competitive. Global sourcing has now become a necessity for most firms to survive and succeed in the market.

Question 18

The key to the success of any company is the quality of its employees.

Accepted Answer

The quality of employees is crucial for the success of any company. Skilled and motivated employees will lead the company to achieve its goals and improve its performance.

Question 19

The availability of low-cost domestic supplier alternatives has led to the shift away from outsourcing and offshoring.

Accepted Answer

The answer of The availability of low-cost domestic supplier alternatives...

Question 20

Sophisticated customers, both industrial and consumer, no longer talk about price increases - they demand price reductions!​

Accepted Answer

Sophisticated customers are becoming more price-sensitive and are looking for ways to reduce the costs of goods and services. This has led to a shift towards cost-cutting measures, such as negotiating lower prices or finding alternative suppliers, rather than simply accepting price increases.

Quiz 1: Introduction to Purchasing and Supply Chain Management