Question 1

The supply process and structure for managing indirect spend is typically different than that for managing direct spend.

Accepted Answer

The supply process and structure for managing indirect spend often differ from direct spend due to variations in procurement strategies, supplier relationships, and the nature of the goods or services being procured.

Question 2

A purchasing consortium:
A) speeds up the purchasing process, but does not usually result in price concessions from suppliers.
B) consists of two or more independent organizations that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
C) results in price concessions from suppliers, but usually does not speed up the purchasing process.
D) consists of two or more divisions of the same organization that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
E) is a form of collaborative purchasing used only by the public sector to deliver a wider range of services at a lower total cost.

Accepted Answer

A purchasing consortium involves independent organizations combining their purchasing power to negotiate better terms with suppliers, including pricing, service, and technology.

Question 3

Supply can provide an uninterrupted flow of materials, supplies and services by:
A) holding large inventories.
B) holding small inventories.
C) standardizing capital equipment, materials, MRO and services.
D) b and c
E) a and c

Accepted Answer

Holding large inventories ensures availability, and standardizing capital equipment, materials, MRO, and services can streamline processes and reduce disruptions.

Question 4

Supply's contribution to the organization's competitive position depends on its ability to:
A) reduce costs.
B) enhance revenues.
C) manage assets.
D) a and c
E) a, b and c

Accepted Answer

Supply's contribution to an organization's competitive position involves reducing costs, enhancing revenues, and managing assets effectively.

Question 5

Close to 70 percent of the value of any given requirement is established when needs are recognized and described. Therefore, the following functions should work together during need recognition and description:
A) the primary user and specifier.
B) the primary user and supply.
C) the primary user, design engineering and supply.
D) the primary user, design engineering, supply and accounting.
E) the primary user, design engineering, supply and all other relevant functional areas such as accounting/finance, marketing and operations.

Accepted Answer

All relevant functional areas should collaborate during need recognition and description to ensure comprehensive understanding and alignment, maximizing the value of the requirement.

Question 6

The degree of centralization is reflected by the number of supply professionals working throughout all functional areas of the organization.

Accepted Answer

The answer of The degree of centralization is reflected by...

Question 7

Hybrid supply structures typically:
A) amplify the disadvantages of centralization.
B) amplify the advantages of decentralization.
C) capture the benefits of both centralized and decentralized structures.
D) are used in small to medium-sized organizations.
E) are used in service organizations of all sizes.

Accepted Answer

Hybrid supply structures are designed to capture the benefits of both centralized and decentralized structures, allowing organizations to leverage the strengths of each approach.

Question 8

Organizations commit resources to cross-functional team development to:
A) give internal users ownership of tasks and problems.
B) achieve time, quality, or cost-reduction targets
C) promote diversity in the workplace.
D) give supply ownership of tasks and problems.
E) cross-train employees in case of downsizing.

Accepted Answer

Cross-functional teams are developed to leverage diverse expertise and perspectives to achieve specific organizational goals, such as improving time efficiency, enhancing quality, or reducing costs.

Question 9

The organizational structure centralized, decentralized, or hybrid) of the supply function:
A) has little influence on supply processes, internal cross-functional relationships, or the procedures and systems employed.
B) influences supply processes, internal cross-functional relationships, and the procedures and systems employed.
C) influences supply processes, but not internal cross-functional relationships, or the procedures and systems employed.
D) influences internal cross-functional relationships, and the procedures and systems employed, but not supply processes.
E) influences the procedures and systems employed, but not supply processes or internal cross-functional relationships.

Accepted Answer

The organizational structure of the supply function significantly influences supply processes, internal cross-functional relationships, and the procedures and systems employed, as it determines how decisions are made and how different parts of the organization interact.

Question 10

Specialization within the supply function:
A) allows staff to develop expertise in particular areas.
B) is unnecessary because most tasks are transactional.
C) has no impact on talent management or organization within supply.
D) increases operating costs beyond the benefits of specialization.
E) is seldom required now that so many tasks are automated.

Accepted Answer

Specialization within the supply function allows staff to develop expertise in particular areas, enhancing efficiency and effectiveness in handling specific tasks.

Question 11

Eliminating process inefficiencies is the best way to accomplish supply objectives at the lowest total operating costs.

Accepted Answer

Eliminating process inefficiencies can streamline operations, reduce waste, and optimize resource use, leading to lower total operating costs while achieving supply objectives.

Question 12

A change in how supply is organized and structured is the result of:
A) the changing preference of the Chief Purchasing Officer.
B) an assessment of the best purchasing structure given the supply base.
C) a change in the overall corporate organizational structure.
D) a determination of the easiest change to manage internally.
E) a consensus among the supply management professionals in the company.

Accepted Answer

The answer of A change in how supply is organized...

Question 13

Products, services and processes can be standardized and, if done effectively, will lower total cost of ownership.

Accepted Answer

Standardization can lead to economies of scale, reduced complexity, and streamlined processes, all of which can contribute to lowering the total cost of ownership.

Question 14

Some of the disadvantages of decentralization are narrow specialization and job boredom, lack of job flexibility, and a tendency to minimize legitimate differences in requirements.

Accepted Answer

Decentralization typically leads to increased job flexibility, broader specialization, and accommodates diverse requirements, as decision-making is distributed across various levels.

Question 15

There is an inherent conflict between supply's objective to provide an uninterrupted flow of materials, supplies and services required to operate the organization and the objective to keep inventory investment and loss at a minimum.

Accepted Answer

The conflict arises because maintaining an uninterrupted flow often requires holding more inventory, which can increase costs and potential losses, while minimizing inventory investment aims to reduce these costs and risks.

Question 16

Which factors have a major influence on supply's level in the organization: a) the ratio of purchased material and services costs as a percentage of total costs or income. b) the size of the supply base. c) the nature of the products or services acquired. d) the extent to which supply and suppliers can provide competitive advantage. e) the credentials of the existing supply personnel.
A) a and b
B) c and d
C) d and e
D) a, c and d
E) a, d and e

Accepted Answer

The nature of the products or services acquired and the extent to which supply and suppliers can provide competitive advantage are major factors influencing supply levels. Additionally, the ratio of purchased material and services costs as a percentage of total costs or income is crucial as it impacts cost management and efficiency.

Question 17

Decentralization refers to a supply organization that is physically located at corporate headquarters from which all organizational spending decisions are made.

Accepted Answer

Decentralization refers to the distribution of decision-making authority away from a central location or group, allowing local branches or units to make decisions independently.

Question 18

In a decentralized purchasing structure, those tasks which are more effectively handled at the business unit level include establishing policies, procedures, controls, and systems.

Accepted Answer

In a decentralized purchasing structure, establishing policies, procedures, controls, and systems is typically handled at a central level to ensure consistency and compliance across the organization.

Question 19

Supply should obtain needed goods and services at the lowest total cost of ownership meaning that other cost factors-such as quality levels, after-sales service, warranties, inventory and spare parts requirements, and downtime-must be considered even though in the long term these factors seldom have a cost impact greater than the original purchase price.

Accepted Answer

In the long term, factors like quality, service, and downtime can have a significant cost impact, sometimes exceeding the original purchase price.

Quiz 3: Supply Organization

The supply process and structure for managing indirect spend is typically different than that for managing direct spend.

A purchasing consortium:

Supply can provide an uninterrupted flow of materials, supplies and services by:

Supply's contribution to the organization's competitive position depends on its ability to:

Close to 70 percent of the value of any given requirement is established when needs are recognized and described. Therefore, the following functions should work together during need recognition and description:

The degree of centralization is reflected by the number of supply professionals working throughout all functional areas of the organization.

Hybrid supply structures typically:

Organizations commit resources to cross-functional team development to:

The organizational structure centralized, decentralized, or hybrid) of the supply function:

Specialization within the supply function: