Question 1

Moving into e-procurement involves more buying of substandard goods and a larger purchasing staff.

Accepted Answer

Moving into e-procurement can actually lead to better quality control and less likelihood of buying substandard goods. Additionally, automation can streamline the purchasing process and potentially result in a smaller purchasing staff.

Question 2

Public Works and Government Services Canada is the government's largest purchasing organization.

Accepted Answer

Public Works and Government Services Canada (PWGSC) is the government's largest purchasing organization, responsible for procuring goods and services for federal departments and agencies.

Question 3

A buying alliance attempts to use their combined leverage to obtain lower prices for raw materials.

Accepted Answer

A buying alliance is formed to collectively negotiate better prices and terms from suppliers. The alliance can use their combined purchasing power to negotiate discounts, better payment terms, and access to products that may not be available to individual companies.

Question 4

Specific investments are those expenditures tailored to a particular company and value chain partner.

Accepted Answer

Specific investments are investments made in a particular company or value chain partner that are customized to their needs and requirements. These are different from general investments that are not targeted towards any particular company or partner.

Question 5

In the "customer is king" category of buyer-seller relationship, the category is characterized as being one that it relatively simple where routine exchanges with moderately high levels of cooperation and information exchange occurs.

Accepted Answer

The "customer is king" category of buyer-seller relationship is characterized by a high level of adaptation by the seller to meet the specific needs of the buyer, often involving complex and customized solutions, rather than routine exchanges.

Question 6

Opportunism is a concern and risk when buyers cannot easily monitor supplier performance.

Accepted Answer

Opportunism is more likely to occur when buyers cannot easily monitor supplier performance as suppliers may take advantage of the contract terms, engage in unethical behavior or lower the quality of their products or services.

Question 7

With respect to proposal solicitation in B2B, sellers begin the process by requesting permission to make a proposal rather than waiting for the buyer to request one.

Accepted Answer

In B2B proposal solicitation, it is typically the buyer who initiates the process by issuing a request for proposal (RFP) or invitation for bid (IFB), inviting sellers to submit their proposals.

Question 8

In a system called vendor-managed inventory, companies shift the ordering responsibility to their suppliers.

Accepted Answer

In vendor-managed inventory system, the suppliers are responsible for monitoring and replenishing the inventory at the retailers' stores.

Question 9

Corporate credibility depends on: corporate expertise, corporate trustworthiness, and corporate likability.

Accepted Answer

Corporate credibility is based on three factors: corporate expertise, corporate trustworthiness, and corporate likability.

Question 10

Government organizations often complain about bureaucracy, regulations, decision-making delays, and frequent shifts in procurement staff.

Accepted Answer

Many government organizations have been criticized for being slow, bureaucratic, and having cumbersome procedures that can slow down decision-making and procurement processes.

Question 11

With respect to assessing customer value, in conjoint analysis customers are asked to rank their preference for alternative market offerings or concepts.

Accepted Answer

In conjoint analysis, customers are indeed asked to rank or rate different product configurations or market offerings to determine the relative importance of each attribute or feature, which helps in assessing customer value for those attributes.

Question 12

Top firms are comfortable using technology to improve the way they do business with their business-to-business customers.

Accepted Answer

Top firms are embracing technology and using it to enhance their B2B relationships and operations. Many are implementing customer relationship management (CRM) systems, automation tools, and online portals to streamline the buying process and provide a better customer experience.

Question 13

The buying process begins when someone places an order with a sales representative.

Accepted Answer

The buying process actually begins much earlier, with the recognition of a need or problem by the potential buyer, followed by information search and evaluation of alternatives before the decision to purchase is made.

Question 14

Companies can order thousands of items through electronic catalogues distributed by e-procurement software, such as Grainger's.

Accepted Answer

E-procurement software like Grainger's offer electronic catalogues that allow companies to order thousands of items.

Question 15

One of the eight categories of buyer-seller relationships is the contractual transaction that generally shows low levels of trust, cooperation, and interaction; exchange is defined by formal contract.

Accepted Answer

The description given matches the characteristics of a contractual transaction, which is one of the eight categories of buyer-seller relationships.

Question 16

Some companies shift the ordering responsibility to their suppliers in systems called vender-managed inventory (VMI).

Accepted Answer

In vender-managed inventory systems, the responsibility of ordering inventory is transferred from the customer to the supplier. Hence, the statement is true.

Question 17

In general, buyers review the product and its price rather than any other considerations about the seller as a buying decision is made.

Accepted Answer

Buyers often consider various factors beyond the product and its price, including the seller's reputation, customer service, return policies, and shipping options, which can significantly influence their purchasing decisions.

Question 18

According to the buygrid framework described in the text, a performance review completes the buygrid as a last step.

Accepted Answer

The buygrid framework outlines the stages of a business buying process, with the performance review being the final step to evaluate the purchase decision.

Question 19

A good illustration of a member of the institutional market would be Boeing because it is a member of the aviation institution structure.

Accepted Answer

The term "institutional market" typically refers to the buying and selling of securities or commodities in large volumes by institutional investors such as pension funds, mutual funds, and insurance companies, rather than referring to companies being part of an industry or sector like aviation.

Question 20

Product value analysis (PVA) is an approach to cost reduction in which components are studied to determine if they can be redesigned or standardized or made by cheaper methods of production.

Accepted Answer

PVA is indeed an approach to cost reduction that involves analyzing components to see if they can be redesigned, standardized, or made by more cost-effective methods of production.

Quiz 7: Analyzing Business Markets