Question 1

Which of the following situations explains 'ordering'? 
A) Ordering refers to the placing of purchase orders at a supplier against previously arranged conditions. 
B) Ordering is when orders are placed directly at the supplier, without questioning the supplier's conditions. 
C) Ordering refers to the placing of purchase orders at a supplier without previously arranged conditions. 
D) Ordering is when orders are placed directly at the supplier and there is questioning of the supplier's conditions.

Accepted Answer

Ordering refers to the placing of purchase orders at a supplier against previously arranged conditions.

Question 2

Which of the following terms refers to products,indirect materials or consumable items which are necessary for keeping the organization running in general,and for the support activities in particular? 
A) Maintenance, repair and operating materials. 
B) Supplies 
C) Consumables 
D) Tangible goods

Accepted Answer

Maintenance, repair and operating materials (MRO) refer to products, indirect materials or consumable items necessary to keep the organization running and support activities. MRO items include items such as lubricants, cleaning supplies, safety equipment, office supplies, and other materials used in day-to-day production and maintenance activities. Supplies and consumables are broader categories that can include other types of items beyond MRO materials, and tangible goods refer to any physical product that can be sold or purchased, which is not specific to support activities.

Question 3

Which of the following explains 'purchasing? 
A) The management of the company's indirect activities in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions. 
B) The management of the company's internal resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions. 
C) The management of the company's distribution channels in such a way that the distribution of good and services is secured under the most favourable conditions. 
D) The management of the company's external resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions.

Accepted Answer

Purchasing involves managing the company's external resources to ensure the supply of necessary goods, services, capabilities, and knowledge under the most favorable conditions.

Question 4

Which of the following are indirect materials? 
A) Transport 
B) Raw materials 
C) Services 
D) Components

Accepted Answer

Indirect materials are those that are not directly traceable to a specific product, such as services that support production but are not part of the final product.

Question 5

Which of the following is a definition of procurement? 
A) Procurement is all activities required in order to get the product from the supplier to its final destination. 
B) Procurement is all activities required in order to get the product from the manufacturer to its final destination. 
C) Procurement is all activities required in order to get the product from the supplier to the distributer 
D) Procurement is all activities required in order to get the product from the distributor to its final destination.

Accepted Answer

Procurement encompasses all activities involved in obtaining goods and services from suppliers, including sourcing, negotiation, and strategic selection, not just the physical movement of goods.

Question 6

Which of the following is a definition of 'quality'? 
A) Quality is meeting (internal or external) customer's requirements that have not been formally agreed between a customer and a supplier. 
B) Quality is meeting (internal customer's requirements that have been formally agreed between an internal customer and a supplier. 
C) Quality is meeting (internal or external) customer's requirements that have been formally agreed between a customer and a supplier. 
D) Quality is meeting (internal or external) customer's requirements that have been informally agreed between a customer and a supplier.

Accepted Answer

Quality is defined as meeting the requirements that have been formally agreed upon between the customer and the supplier. This means that both parties have agreed on the specifications and expectations for the product or service. This ensures that the customer receives exactly what they want, and the supplier is aware of what they need to provide to meet those requirements. Both internal and external customers can have formally agreed-upon requirements.

Question 7

Which of the following are activities of the purchasing function? 
A) Property maintenance 
B) Production control 
C) Market research 
D) Preparing and conducting negotiations with suppliers.

Accepted Answer

The activity of purchasing function is preparing and conducting negotiations with suppliers to procure goods and services required by the organization. Property maintenance, production control, and market research are not specific activities of the purchasing function.

Question 8

Which term describes the purchasing of all materials,components and services that are used to support the company's infrastructure and back-office activities? 
A) Components acquisition 
B) Raw materials acquisition 
C) Direct purchasing 
D) Indirect purchasing

Accepted Answer

Indirect purchasing refers to the procurement of all materials, components, and services that are used to support the company's infrastructure and back-office activities. This may include items such as office supplies, equipment, IT services, and maintenance services.

Question 9

Which of the following are activities of the purchasing function? 
A) Representing the company in legal matters. 
B) Monitoring and controlling orders to secure supply. 
C) Public relations. 
D) Developing strategic corporate plans.

Accepted Answer

The activities of the purchasing function include monitoring and controlling orders to secure supply. Representing the company in legal matters, public relations, and developing strategic corporate plans are not direct activities of the purchasing function.

Question 10

Which term describes products which are not consumed immediately,but whose purchasing value is depreciated during its economic life cycle? 
A) Just -in-Time supplies 
B) Raw materials acquisition 
C) Equipment 
D) Investment goods

Accepted Answer

Investment goods refer to products that are not consumed immediately, but rather have an economic life cycle during which their purchasing value depreciates. Equipment is a specific type of investment good, but not all investment goods are equipment. Raw materials acquisition refers to the process of obtaining the materials needed to produce a product, and just-in-time supplies refer to a manufacturing strategy of only ordering and receiving supplies as they are needed in the production process.

Question 11

Procurement activities are necessary for running,maintaining and managing which of the following activities? 
A) Primary activities 
B) Support activities 
C) Primary and Support activities 
D) Future activities

Accepted Answer

Procurement activities are necessary for both primary and support activities. Primary activities are directly related to the production of goods and services, such as inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities, on the other hand, are not directly related to production but vital for the smooth functioning of the organization, such as procurement, technology development, human resource management, and infrastructure. Therefore, procurement activities are necessary for running, maintaining, and managing both primary and support activities.

Question 12

Which of the following are not procurement activities? 
A) Traffic and transportation 
B) Inventory control 
C) Incoming inspection 
D) Quality control and quality assurance.

Accepted Answer

The answer of Which of the following are not procurement...

Question 13

Which of the following situations explains 'primary activities'? 
A) Primary activities are those activities that are required to offer the company's value proposition to its customers. 
B) Inbound logistics, operations and outbound logistics, 
C) Marketing and sales and customer service activities. 
D) All of the above.

Accepted Answer

Primary activities are part of the value chain analysis that includes inbound logistics, operations, outbound logistics, marketing and sales, and service activities, all of which are essential in delivering a company's value proposition to its customers.

Question 14

Which of the following are activities of the purchasing function? 
A) Selecting the best possible supplier 
B) Recruiting staff 
C) Distributing goods and services 
D) Financial control

Accepted Answer

The activity of selecting the best possible supplier is a key responsibility of the purchasing function. Recruiting staff, distributing goods and services, and financial control are not typically associated with the purchasing function, although there may be some overlap in responsibilities with other departments.

Question 15

Which of the following are 'primary activities'? 
A) Human Resources Management 
B) Inbound logistics. 
C) Public relations 
D) Payroll

Accepted Answer

Primary activities are those that are directly involved in the creation and delivery of a product or service. Inbound logistics, which involve the transportation, storage, and handling of materials and inventory, are considered a primary activity. Human Resources Management, Public Relations, and Payroll are considered support activities.

Question 16

Which of the following situations explains the 'make to order (MTO)' process? 
A) Maintenance repair and operating materials are kept in stock. 
B) Only raw materials and components are kept in stock. 
C) Finished products are stockpiled. 
D) No raw materials or components are kept in stock.

Accepted Answer

The 'make to order (MTO)' process involves keeping only raw materials and components in stock and producing finished products only after receiving customer orders.

Question 17

Which of the following situations explains a 'supplier partner' relationship? 
A) A supplier partner is defined as a firm with whom a company has an ongoing buyer/seller relationship. 
B) A supplier partner is defined as a firm with whom a company orders places directly at the supplier, without questioning the supplier's conditions. 
C) A supplier partner is defined as a firm with whom a company has not yet completed a contractual agreement to supply. 
D) A supplier partner is defined as a firm with whom a company supplies raw materials only.

Accepted Answer

A supplier partner relationship describes an ongoing buyer/seller relationship between a company and a supplier, characterized by collaboration and a mutual focus on long-term success. This type of relationship often involves regular communication, joint planning, and a high degree of trust between the two organizations. Option B describes a situation in which a company is simply placing orders with a supplier without any collaboration or partnership. Option C describes a situation in which no contractual agreement has been reached yet, so it does not necessarily involve a supplier partner relationship. Option D describes a situation in which a company is only supplying raw materials to a supplier, so it also does not describe a supplier partner relationship.

Question 18

Which of the following statements explains 'purchasing management'? 
A) All activities necessary to manage supplier relationships in such a way that their activities are aligned with the company's overall business strategies and interests. 
B) Relates to all activities necessary to manage customer relationships in such a way that their activities are aligned with the company's overall business strategies and interests. 
C) Relates to all activities necessary to manage staff relationships in such a way that their activities are aligned with the company's overall business strategies and interests. 
D) Relates to all activities necessary to manage financial relationships in such a way that their activities are aligned with the company's overall business strategies and interests.

Accepted Answer

Purchasing management refers to managing supplier relationships in a way that aligns their activities with the company's overall business strategies and interests. It involves activities such as supplier selection, negotiation, contract management, and performance evaluation.

Question 19

Which of the following situations explains 'payment terms'? 
A) Payment terms relate to what, how and when the buyer will pay for the products and services delivered by the supplier. 
B) Payment terms relate to a 12 week period allowed before payment is due for the products and services delivered by the supplier. 
C) Payment terms relate to when the buyer will pay for the products and services delivered by the supplier. 
D) Payment terms relate to what and how the buyer will pay for the products and services delivered by the supplier.

Accepted Answer

Payment terms refer to the agreed-upon conditions surrounding the payment for products and services provided by a supplier. This can include details around what will be paid, how it will be paid, and when it will be paid. Option A is the most comprehensive answer as it covers all aspects of payment terms.

Question 20

Which of the following situations does not apply to a 'supplier partner' relationship? 
A) A situation where a company has an ongoing buyer/seller relationship. 
B) A situation involving a commitment over an extended period, 
C) A situation involving the placing of purchase orders at a supplier without previously arranged conditions. 
D) A situation involving a mutual sharing of information and a sharing of risks and rewards resulting from the relationship.

Accepted Answer

A supplier partner relationship involves a strategic alliance and collaboration between the buyer and supplier. Placing purchase orders at a supplier without previously arranged conditions does not reflect a supplier partner relationship as it lacks the strategic and collaborative aspect of such a relationship.

Quiz 1: The Role of Purchasing in the Value Chain

Which of the following situations explains 'ordering'?

Which of the following terms refers to products,indirect materials or consumable items which are necessary for keeping the organization running in general,and for the support activities in particular?

Which of the following explains 'purchasing?

Which of the following are indirect materials?

Which of the following is a definition of procurement?

Which of the following is a definition of 'quality'?

Which of the following are activities of the purchasing function?

Which term describes the purchasing of all materials,components and services that are used to support the company's infrastructure and back-office activities?

Which of the following are activities of the purchasing function?

Which term describes products which are not consumed immediately,but whose purchasing value is depreciated during its economic life cycle?

Procurement activities are necessary for running,maintaining and managing which of the following activities?

Which of the following are not procurement activities?

Which of the following situations explains 'primary activities'?

Which of the following are activities of the purchasing function?

Which of the following are 'primary activities'?

Which of the following situations explains the 'make to order (MTO) ' process?

Which of the following situations explains a 'supplier partner' relationship?

Which of the following statements explains 'purchasing management'?

Which of the following situations explains 'payment terms'?

Which of the following situations does not apply to a 'supplier partner' relationship?