Deck 12: Project Supply Chain Management

Question 1

Buying from an outside supplier to meet project needs is a practice that is rarely used,because it invariably proves to be more expensive than obtaining materials and services internally.

Answer 1

False

Question 2

One of the important factors that should influence the selection of contract type is the degree of risk for the seller and the buyer that each contract type contains.

Answer 2

True

Question 3

Outputs of Plan Procurement Management include the procurement management plan and procurement statement of work.

Answer 3

True

Question 4

Among the disadvantages associated with outsourcing is the gradual loss of special skills for doing some specific activities that have been outsourced.

Question 5

The evaluation criteria developed during procurement planning should guide the vendor evaluation and selection.

Question 6

A project organization can serve as either the buyer or the seller in a project related contract.

Question 7

Contract incentives are often used when the buyer wants to maximize some aspect of performance,such as finishing the project early or providing a higher level of quality.

Question 8

During procurement planning,the project team determines which needs can best be met by acquiring products and services from an outside provider,and which can be accomplished by the team.

Question 9

In many cases,the proposal prepared by the vendor becomes a part of the final contract.

Question 10

Logistics is the work required to move and position inventory throughout a supply chain.

Question 11

A contract is a unilateral document that obligates the seller to provide specified products and services under terms agreeable to the buyer.

Question 12

Fixed price contracts provide low risk for the seller,since the buyer will pay a fixed price,regardless of how much the project actually costs the seller.

Question 13

Lean purchasing refers to a manufacturing context where just-in-time (JIT)tools are used to ensure that every step in the supply process adds value,while costs are kept to a minimum.

Question 14

Traditional project procurement was characterized by win / lose adversarial relations between owner and contractor,whereas contemporary project partnering fosters a relationship of trust and collaboration.

Question 15

Project partnerships can be advantageous to both the client and the vendor,in terms of improved project execution,flexibility,and reduced bid administration.

Question 16

On complex projects,despite the importance of factors such as technical capability,managerial capability and previous experience; the selection decision is made mostly or entirely on price.

Question 17

Supply chain operations require managerial processes that span across functional areas within individual organizations,and link trading partners and customers across organizational boundaries.

Question 18

Extensive supplier evaluation approaches such as surveys,facility visits and financial analysis should be applied to first-tier suppliers only.

Question 19

Supply chain management focuses exclusively upon the parties directly involved in providing supplies to the project team.

Question 20

Effective project partnerships generally require shared responsibilities,shared resources,shared information,shared rights and shared risks between suppliers and customers.

Question 21

All of the following accurately describe the features and characteristics of a contract EXCEPT:

A) A contract binds both the seller and the buyer.
B) A contract obligates the seller to provide a specified product or service.
C) A contract obligates the buyer to pay for a specified product or service.
D) The project organization is always a buyer in a contract arrangement

Question 22

All of these are factors that could lead to a decision to buy or outsource rather than make or perform in-house,EXCEPT:

A) flexibility in procurement
B) ability to use specialized suppliers
C) inadequate capacity
D) more control over quality and time

Question 23

Supply chains use a combination of modes of transportation including: air,rail,water,pipeline and truck.

Question 24

All of the following entities are typically included in the supply chain EXCEPT:

A) suppliers
B) public relations
C) consumers
D) project team

Question 25

Information is a key ingredient at each stage of the project supply chain,as well as within each phase of supply chain decision making.

Question 26

All of the following statements accurately describe supply chain management EXCEPT:

A) It is a closed-loop system solely within the project organization's boundaries
B) It spans across suppliers,resellers,project organizations and consumers.
C) It addresses the flow of products,information and funds.
D) It is a system approach to managing the entire flow of physical products.

Question 27

The PMBOK process of documenting project procurement decisions,specifying the approach and identifying potential sellers is known as:

A) Define supply chain.
B) Plan procurement management.
C) Schedule procurements.
D) Negotiate contracts

Question 28

All of the following factors are commonly used to assess potential suppliers pursuant to a source selection decision EXCEPT:

A) supply quality
B) personal relationships with senior management
C) inbound transportation cost
D) replenishment lead time

Question 29

Which party to a contract absorbs the preponderance of cost risk when a Firm-Fixed-Price (FFP)contract is used?

A) the seller
B) the buyer
C) the cost risk is equally shared.
D) the insurer

Question 30

The procurement management plan:

A) describes how the procurement division will be managed.
B) describes how supply chain partners will be managed.
C) describes how a project team will acquire goods and services from outside the performing organization.
D) describes how sellers will be audited by the procurement team.

Question 31

Which of the following contract types is most appropriate when costs are NOT well known and the buyer absorbs all of the cost risk?

A) Firm-Fixed-Price (FFP)
B) Fixed-Price-Incentive-Firm (FPIF)
C) Cost-Plus-Fixed-Fee (CPFF)
D) Time and Material (T&M)

Question 32

Which of the following is one of the PMBOK Guide's four project procurement management processes?

A) Conduct procurements
B) Perform configuration management
C) Conduct contract reviews
D) Perform value engineering

Question 33

Project partnerships offer all of the following advantages to vendors EXCEPT:

A) there is a more dependable stream of work
B) the expected outcome is clearly stated
C) the buyer gains at the vendor's expense
D) greater potential profit

Question 34

A description of the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products,services or results is known as:

A) the contract clauses and special provisions
B) the procurement statement of work
C) the supply invoice
D) the purchase order

Question 35

Which of the following factors should be considered when a project team evaluates a "make or buy" decision to procure services?

A) prevailing public opinion regarding the economic impact of outsourcing
B) only the direct costs associated with the decision,excluding consideration of indirect costs
C) advantages and disadvantages of outsourcing in terms of time,cost and performance control
D) project manager's or sponsor's preference

Question 36

Which of the following types of contracts involves payment to the seller for the seller's actual costs plus a fee typically representing the seller's profit?

A) fixed-price contract
B) cost-reimbursable contract
C) equitable adjustment contract
D) direct cost contract

Question 37

Often a project team will start the selection process by establishing a list of potential suppliers.All of the following information sources are frequently used to identify these potential suppliers EXCEPT:

A) supplier catalogs or websites
B) sales personnel
C) stakeholder register
D) trade shows

Question 38

Which of the following terms describes a method for transforming contractual arrangements into a cohesive,collaborative project team with a single set of goals and established dispute resolution procedures?

A) a contract unification plan
B) partnering
C) arbitration
D) conflict resolution

Question 39

All of the following items are generally considered when selecting the right type of contract EXCEPT:

A) extent of price competition
B) overall degree of cost and schedule risk
C) urgency of requirements
D) project organization's accounting system

Question 40

Evaluations of prospective suppliers by project teams often involve all of the following approaches EXCEPT:

A) financial condition analysis
B) facility visits
C) supplier surveys
D) prototyping

Question 41

Compare and contrast traditional project procurement management with the more contemporary approach - project partnering.What are the conditions or sharing requirements for effective project partnerships?

Question 42

Contract types are often associated with two broad categories: fixed-price contracts and cost-reimbursable contracts.Briefly identify the factors to consider when determining which type is most appropriate for a planned contract.

Question 43

Project managers must frequently decide whether to obtain needed products and services from internal sources or from external sources.This decision is often referred to as the "make or buy" decision.Briefly identify and explain at least three reasons that support the decision to "make" the products and at least three reasons that support the decision to "buy" the products.

Question 44

Project partnerships offer which of the following advantages to both clients and vendors?

A) shared motivation
B) potential of lower cost for client
C) potential of greater profit for vendor
D) opportunity for vendor to prove oneself

Question 45

According to the PMBOK Guide,the project procurement management knowledge area includes four processes.Identify and briefly describe each of these processes.