Question 1

Packaging is an easy category to buy because it has few disposal, environmental, and transportation implications.

Accepted Answer

Packaging has significant disposal, environmental, and transportation implications. It can contribute to waste, pollution, and carbon emissions, and its transportation can also impact the environment.

Question 2

Supply's growing involvement in the acquisition of services may be explained by:

Accepted Answer

The high dollars spent on services and the opportunities to reduce costs are the main reasons for Supply's growing involvement in the acquisition of services.

Question 3

Capital items can be depreciated, are often bought under a separate budgetary allocation, and may require special financing arrangements.

Accepted Answer

Capital items are long-term assets that are depreciated over time, often require separate budgeting due to their high cost, and may need special financing due to their significant financial impact.

Question 4

Early supply involvement can be accomplished by:

Accepted Answer

Using cross-functional teams on new product development allows supply professionals to be involved early in the process, ensuring that supply considerations are integrated from the beginning.

Question 5

MRO stands for Maintenance, Resale, and Operating Supplies.

Accepted Answer

MRO stands for Maintenance, Repair, and Operations, which refers to the supplies and activities needed to keep a company running smoothly.

Question 6

New technology frequently permits an organization to gain competitive advantage on the bases of different products and services at significantly lower cost.

Accepted Answer

New technology can streamline processes, reduce production costs, and enable innovation, allowing organizations to offer unique products or services at lower prices, thus gaining a competitive edge.

Question 7

An advantage of buying by performance or function over other specification methods is that it provides:

Accepted Answer

This method allows suppliers to use their expertise to determine the best way to meet the buyer's needs, potentially leading to more innovative and suitable solutions.

Question 8

Description by brand:

Accepted Answer

A description by brand may be necessary if the manufacturing process is secret, as it ensures the buyer gets the specific product with the desired characteristics that only that brand can provide.

Question 9

Quality as a term covers both functionality: "Does it do the job we want done?" and conformance to specification: "Does it fit the specification agreed to?"

Accepted Answer

Quality encompasses both the ability of a product or service to meet the intended purpose (functionality) and its adherence to predefined standards or specifications (conformance).

Question 10

Capital assets are long-term assets that:

Accepted Answer

Capital assets are long-term assets that have an ongoing effect on the organization's operations, as they are used over multiple years to generate revenue.

Question 11

For non-repetitive requirements, a system or process of acquisition can be designed.

Accepted Answer

The answer of For non-repetitive requirements, a system or process...

Question 12

When a specification is widely known, commonly recognized and readily available to every buyer, it is called a:

Accepted Answer

A standard specification is widely known, commonly recognized, and readily available to every buyer.

Question 13

A buyer may be compelled to purchase by specification when:

Accepted Answer

The answer of A buyer may be compelled to purchase...

Question 14

The purpose of identifying the function of an item to be required is:

Accepted Answer

Identifying the function of an item helps determine what constitutes acceptable value by understanding the essential requirements and performance criteria, ensuring that the item meets the necessary standards and provides value for its intended use.

Question 15

The price of a semiprocessed material-steel sheets instead of ingots, frozen pork bellies instead of hogs, cocoa butter instead of beans-tends to move in the opposite direction of the price of the basic raw material.

Accepted Answer

The price of semiprocessed materials generally moves in the same direction as the price of the basic raw materials, as they are directly related in the production process.

Question 16

Supply chain risks include:

Accepted Answer

The answer of Supply chain risks include:
...

Question 17

Buying capital equipment differs from other types of purchases because determination of final cost includes estimates over the life of the equipment.

Accepted Answer

Buying capital equipment involves considering the cost of the equipment not only at the time of purchase, but also the estimated costs over its useful life, such as maintenance, repairs, and operating expenses. This makes the determination of final cost a more long-term and complex process compared to other types of purchases.

Question 18

Equipment, real estate, and construction are examples of capital acquisitions, but information technology is not.

Accepted Answer

Information technology can also be considered a capital acquisition as it often involves significant investment in hardware, software, and infrastructure that provide long-term benefits to an organization.

Question 19

Standardization:

Accepted Answer

Standardization refers to the process of establishing and applying rules for consistent sizes, designs, and quality to ensure uniformity and compatibility across products or services.

Question 20

Assets may be tangible or intangible.

Accepted Answer

Assets can be physical items like machinery (tangible) or non-physical items like patents (intangible).

Quiz 6: Need Identification and Specification