Deck 3: Understanding Firms As Customers

Question 1

________ entails broadening the domain and span of influence of purchasing,pursuing quality improvements and cost reductions.

A)Supply management orientation
B)Procurement orientation
C)Value orientation
D)Buying orientation

Answer 1

B

Question 2

Ken,a buyer for Miller Construction,is willing to sacrifice fewer product variations,fewer delivery locations and less technical support from his supplier in exchange for reduced prices.This is an example of:

A)multisourcing
B)target pricing
C)procurement orientation
D)defeaturing or cooperative pricing

Answer 2

D

Question 3

Extended purchase price added to the nonperformance costs,all divided by extended purchase price,equals:

A)total cost of ownership (TCO)
B)early supplier involvement (ESI)
C)supplier performance index (SPI)
D)value in use (VIU)

Answer 3

C

Question 4

A consortium led by the French Association of Value Analysis and the Association of German Engineers explored,developed and articulated the value management approach for the European Union.The consortium first urges firms to:

A)focus on business processes
B)adopt a supply management orientation approach
C)adopt a customer-value philosophy and set of action guidelines
D)incorporate a procurement orientation into all aspects of buying

Question 5

Using the tools of value assessment,________ conducts the most thorough and demanding evaluations of suppliers.

A)supply management orientation
B)procurement orientation
C)value orientation
D)buying orientation

Question 6

________ reflects the buyer's inability to predict how many alternate suppliers will be available and what quality of goods and services will be forthcoming when a need arises.

A)transaction uncertainty
B)buying uncertainty
C)market uncertainty
D)need uncertainty

Question 7

________ refers to all those members of an organization who become involved in the buying process for a particular product or service.

A)Team members
B)Business market managers
C)Suppliers
D)Buying team

Question 8

The mission of the ________ is collectively to analyze and focus a value stream so that it does everything involved in supplying a good or service in a way that provides maximum value to the customer.

A)buying center
B)lean enterprise
C)buying group
D)supply manager

Question 9

Companies that subscribe to the ________ evaluate suppliers largely in terms of realized price,quality and availability.

A)supply management orientation
B)procurement orientation
C)value orientation
D)buying orientation

Question 10

Johnny of the Taxi Co.,runs a tight business,demands high standards of his drivers and keeps his cabs in excellent working condition.However,he cannot predict when one of his 38 cabs will break down or get a flat tire and how much it will cost the company - not to mention the irate customer.Johnny has ________.

A)transaction uncertainty
B)buying uncertainty
C)market uncertainty
D)need uncertainty

Question 11

Cooperative relationships with customer firms require all of the following EXCEPT:

A)integrative negotiation
B)target costing
C)target pricing
D)standardization

Question 12

________ focuses on reducing total cost of ownership,not simply price,and is another way to cooperate.

A)Integrative negotiation
B)Target costing
C)Target pricing
D)Standardization

Question 13

A firm that is oriented toward procurement seeks to increase its productivity through all the following EXCEPT:

A)maximizing power over their suppliers
B)improving quality
C)reducing total cost of ownership
D)cooperating with suppliers

Question 14

Cheryl has been the business market manager for Nearly New Cleaning Service since its inception in 1981.She has strong relationships with her supply vendors and requires little new information each time she purchases,unless her company's beginning a new service.She only needs the price and whether or not it's available.This is:

A)a modified rebuy
B)a straight rebuy
C)a continuous rebuy
D)a new task purchasing situation

Question 15

An organization with a ________ maintains arm's-length relationships with vendors and is primarily focused on reducing the total spending.

A)supply management orientation
B)procurement orientation
C)value orientation
D)buying orientation

Question 16

At Trainke Automotive Supply,Inc.,when a part breaks down in the warehouse,the floor worker reports it to the supervisor who reports the break to the warehouse manager,who then selects a vendor to come and repair the equipment,often based on the supervisor's recommendations of what vendor has responded the quickest and done the best work in the past.The supervisor and manager both rely on floor workers to keep vigilant watch over the equipment they work with daily.This is an example of:

A)team member roles
B)role differentiation
C)buying situations
D)value management system

Question 17

As firms migrate to a ________,they create performance measures that focus on total cost of ownership.

A)supply management orientation
B)procurement orientation
C)value orientation
D)buying orientation

Question 18

When managers realize the fate of their organization is inextricably linked to other companies,their firms migrate to a ________:

A)supply management orientation
B)procurement orientation
C)value orientation
D)buying orientation

Question 19

The four major tenets of supply management orientation include all the following EXCEPT:

A)focus on end-users
B)craft a sourcing strategy
C)sustain highly collaborative relationships with select suppliers
D)avoid risk wherever possible

Question 20

________ is based upon the assumption that resources can be expanded to benefit both parties.The process entails identifying shared interests and goals and freely exchanging information.

A)standardization
B)procurement
C)integrative negotiation
D)involvement consulting

Question 21

Transaction uncertainty is inversely related to the customer's confidence that suppliers have easy-to-use procedures for doing business,processing orders accurately,and providing reliable and timely deliveries.

Question 22

In a new task buying situation,the customer firm has had experience securing the product or service,but managers need to reevaluate alternatives

Question 23

Procurement managers classify products and services that fail to meet company requirements as underspecified and those that provide far more features than necessary as overspecified.

Question 24

The total cost of ownership (TCO)is defined as the sum of purchase price minus all expenses incurred during the productive lifetime of a product or service minus its salvage or resale price.