Question 1

According to the text,driving your suppliers to offer the lowest possible prices,which in turn will lower your cost of goods sold,could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components.

Accepted Answer

The text mentions that pressuring suppliers to offer the lowest possible prices can harm buyer-supplier relationships and lead to lower quality levels in the items produced using those suppliers' low cost components.

Question 2

A 4PL,commonly referred to as a lead logistics provider,is a trucking company that also provides tracking services.

Accepted Answer

A 4PL is not a trucking company but rather a third-party logistics provider that manages and integrates the entire supply chain of a company. They may utilize multiple transportation providers, including trucking companies, but their main function is to manage and optimize the logistics process.

Question 3

Companies that lack internal expertise in a specific functional area would likely consider insourcing.

Accepted Answer

Companies that lack internal expertise in a specific functional area would likely consider outsourcing, not insourcing.

Question 4

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base.

Accepted Answer

Rationalizing the supplier base entails decreasing the number of suppliers in the network by removing underperforming suppliers from the existing supplier pool.

Question 5

The average annual Purchase spend as a percentage of sales has been declining over the years.

Accepted Answer

There is no specific data provided to support the claim that the average annual Purchase spend as a percentage of sales has been declining over the years.

Question 6

Manufacturers typically have very little influence over second and third tier suppliers when compared to the influence they hold over first tier suppliers.

Accepted Answer

This is because second and third tier suppliers are farther down the supply chain and may have their own supplier relationships and sourcing strategies that are outside the control of the manufacturer. The manufacturer's leverage over these suppliers is limited, especially if they do not have alternative suppliers to choose from.

Question 7

The influence of corporate sourcing decisions interacts with internal design,production,finance,marketing,and accounting.

Accepted Answer

Corporate sourcing decisions, which include decisions about where to purchase materials, goods, or services from, can have a significant impact on internal operations such as design, production, finance, marketing, and accounting. For example, if a company decides to source raw materials from a different supplier, this could affect production timelines or product quality, which would then have a ripple effect on the finance and marketing functions. Therefore, corporate sourcing decisions do interact with various internal functions of a company.

Question 8

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT:

Accepted Answer

The answer of All of the following are reasons for...

Question 9

Developing a collaborative negotiation infrastructure include four steps: building a preparation process,develop a negotiation database.Design a negotiation launch process,and institute a feedback mechanism.

Accepted Answer

Building a preparation process, developing a negotiation database, designing a negotiation launch process, and instituting a feedback mechanism are the four key components of a collaborative negotiation infrastructure.

Question 10

Generally speaking,there are two approaches to deciding whether or not an action is ethical,utilitarianism and rights and duties.

Accepted Answer

This statement is true. Utilitarianism assesses the ethicality of an action based on its ability to produce the greatest amount of good for the greatest number of people, while rights and duties assess the ethicality of an action based on its conformity to moral rules and obligations.

Question 11

Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.

Accepted Answer

Insourcing refers to a company bringing in-house a process or activity that was previously outsourced to a third-party supplier. If a company experiences issues with a supplier such as late deliveries or low product quality, they may choose to insource the process to have more control over the quality and timeliness of the work.

Question 12

According to the textbook,Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices.

Accepted Answer

The textbook states that Wal-Mart has made significant efforts to implement sustainable business practices, including setting ambitious goals to reduce waste and emissions and investing in renewable energy. However, there have been criticisms of their implementation and progress towards these goals.

Question 13

Retail items,which would likely be found at a store like Target or Wal-Mart,like lamps,blankets,microwave ovens,and candy bars would be classified as functional products.

Accepted Answer

Functional products are those that are basic and necessary for daily living, and are available at mass retailers such as Target or Wal-Mart. Examples include household items like lamps and blankets, appliances like microwave ovens, and everyday treats like candy bars.

Question 14

While a manufacturer may have substantial influence over its first tier suppliers,their influence over second and third tier suppliers is typically much higher.

Accepted Answer

This statement is incorrect as a manufacturer's influence over its second and third tier suppliers is typically much lower compared to its influence over its first tier suppliers. This is because there are more intermediaries involved, and the manufacturer's direct communication and control over these suppliers reduces as we move down the supply chain.

Question 15

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers,it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.

Accepted Answer

As suppliers are increasingly obtaining internationally recognized certifications, it is important for purchasing firms to develop their own internal certification programs that are tailored to their specific needs.

Question 16

While paperless transactions are now possible through e-procurement and Web-based services,these would NOT be considered sustainable business practices.

Accepted Answer

Paperless transactions through e-procurement and Web-based services can reduce paper waste and related costs, making them a sustainable choice.

Question 17

Purchasing departments can be seen as a primary designer and facilitator of important inward- and outward-facing sourcing policies.

Accepted Answer

Purchasing departments are often responsible for setting and implementing sourcing policies for both their internal stakeholders (inward-facing) and external suppliers (outward-facing).

Question 18

Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements,additional purchasing contracts,or contract extensions on existing contracts.

Accepted Answer

This is true. Strategic supplier agreements often include incentives for suppliers who perform well, such as sharing the cost savings resulting from supplier improvements, additional contracts, or contract extensions. This motivates suppliers to continuously improve their performance and helps build long-term relationships with them.

Question 19

Product parts,processes,and product assembly should all be designed by the manufacturing firm to assure a single-minded approach that the suppliers can follow.Supplier involvement in these design phases is considered counterproductive.

Accepted Answer

Supplier involvement in product parts, processes and product assembly design is considered important for ensuring that the manufacturing firm's vision is implemented effectively. It also helps in improving product quality, reducing costs and enhancing supplier relationships. Therefore, it is not considered counterproductive.

Question 20

Benchmarking is the practice of copying what other businesses do best.

Accepted Answer

Benchmarking involves identifying best practices and processes from other successful businesses and implementing them in your own organization to improve performance and efficiency.

Quiz 4: Ethical and Sustainable Sourcing