Question 1

A _____ specifies how supply management will (1) support the desired competitive business-level strategy and (2) complement other functional strategies.
A) supply management strategy
B) corporate strategy
C) marketing strategy
D) category strategy
E) business unit strategy

Accepted Answer

A supply management strategy is specifically focused on how to manage and optimize the supply chain to support the overall business strategy. It takes into account the unique demands of the business and how the supply chain can be used to gain a competitive advantage. The other options may also be important strategies, but they do not specifically address the role of supply management in supporting the overall business strategy.

Question 2

A _____ specifies how a group tasked with developing the strategy for the specific category being purchased will achieve goals that in turn will support higher level strategies.
A) functional strategy
B) corporate strategy
C) business unit strategy
D) category strategy
E) None of the above.

Accepted Answer

The description provided in the question suggests that the answer is category strategy, which focuses on developing strategies for specific product categories or markets. Functional strategy refers to the specific actions taken by different functional areas of a company (e.g. marketing, operations) to support business unit and corporate strategies. Business unit strategy involves developing strategies for each business unit within a company. Finally, corporate strategy is concerned with the overall direction of a company and how it will allocate resources to achieve its goals.

Question 3

Total cost of ownership typically includes costs associated with late delivery, poor quality, or other forms of supplier nonperformance.

Accepted Answer

Total cost of ownership encompasses all costs associated with a supplier, including costs incurred due to late delivery, poor quality, or other forms of nonperformance.

Question 4

In the initial stages of supply management strategy development, supply management adopts essentially a short-term approach and reacts to complaints from its internal customers when deliveries are late, quality is poor, or costs are too high.

Accepted Answer

In the initial stages, supply management tends to focus on addressing immediate issues with delivery, quality, and cost rather than developing long-term strategies.

Question 5

When purchasers find that suppliers' capabilities are not high enough to meet current or future expectations, those suppliers should always be eliminated from the supply base.

Accepted Answer

Suppliers should not always be eliminated from the supply base if their capabilities are not high enough. It is important to first assess the specific areas where improvements are needed and work with the supplier to develop a plan for improvement. If the supplier is willing and able to make the necessary improvements, they may still be a valuable part of the supply base. However, if the supplier is unwilling or unable to make the necessary improvements, then it may be necessary to consider elimination from the supply base.

Question 6

A _____ is concerned with (1) the scope or boundaries of each business and the links with corporate strategy and (2) the basis on which the business unit will achieve and maintain a competitive advantage within an industry.
A) commodity strategy
B) category strategy
C) business unit strategy
D) functional strategy
E) supply management strategy

Accepted Answer

A business unit strategy is focused on defining the scope or boundaries of the business unit and its link with the overall corporate strategy. It also includes defining how the business unit will achieve and maintain a competitive advantage within its industry. Commodity strategy is focused on procuring raw materials or basic goods, category strategy is focused on managing a specific set of related products or services, functional strategy is focused on optimizing the performance of one specific function of the organization, and supply management strategy is focused on managing the organization's supply chain.

Question 7

Which of the following is not one of the primary ways that companies create shareholder value?
A) Increase volume.
B) Reduce cost of employees (downsize).
C) Reduce cost of process and waste.
D) Reduce cost of goods and services.
E) Lower prices.

Accepted Answer

The answer of Which of the following is not one...

Question 8

Which of the following is not one of the steps in the strategic sourcing process?
A) Build the team and the project charter.
B) Conduct market intelligence research on suppliers.
C) Increasing revenues.
D) Strategy development.
E) Supplier relationship management.

Accepted Answer

Increasing revenues is not one of the steps in the strategic sourcing process. The steps are: 
1) Build the team and the project charter. 
2) Conduct market intelligence research on suppliers. 
3) Strategy development. 
4) Supplier selection and negotiation. 
5) Contracting and implementation. 
6) Supplier relationship management.

Question 9

Which of the following is not one of the questions to be addressed when conducting a spend analysis?
A) What did the business spend its money on over the past year?
B) Did the business receive the right amount of products and services given what it paid for them?
C) What suppliers received the majority of the business, and did they charge an accurate price across all the divisions in comparison to the requirements in the POs, contracts, nad statements of work?
D) What was the on-time delivery performance for each supplier?
E) Which divisions of the business spent their money on products and services that were correctly budgeted for?

Accepted Answer

Spend analysis typically focuses on understanding spending patterns, supplier performance in terms of cost and compliance, and budget adherence, rather than delivery performance metrics like on-time delivery.

Question 10

In the final and most advanced stage of supply management strategy development, supply management has assumed a tactical orientation with reporting directly to lower-level management and a simple internal, rather than a strong external, customer focus.

Accepted Answer

In the final and most advanced stage of supply management strategy development, supply management has assumed a strategic orientation with reporting directly to top-level management and a strong external customer focus.

Question 11

An e-RA is an offline, static auction between a buying organization and a group of pre-qualified suppliers who compete against each other to win the business to supply goods or services that have ill-defined specifications for design, quantity, quality, delivery, and related terms and conditions.

Accepted Answer

An e-RA (electronic reverse auction) is an online, dynamic auction where pre-qualified suppliers compete in real-time to win the business to supply goods or services with well-defined specifications, contrary to the description of having ill-defined specifications.

Question 12

In the moderate development phase of supply management strategy development, supply management councils or lead buyers may be responsible for entire classes of commodities, and companywide databases by region may be developed to facilitate this coordination.

Accepted Answer

In the moderate development phase of supply management strategy development, supply management councils or lead buyers may be responsible for entire classes of commodities, and companywide databases by region may be developed to facilitate this coordination.

Question 13

Longer-term relationships are sought with suppliers that have exceptional performance or unique technological expertise.

Accepted Answer

Longer-term relationships are typically sought with suppliers that have exceptional performance or unique technological expertise since they can provide greater value and help the company gain a competitive advantage.

Question 14

A _____ refers to a specific family of products or services that is used in delivering value to the end customer.
A) spend analysis
B) decentralized structure
C) category
D) centralized structure
E) hybrid structure

Accepted Answer

A category refers to a specific family of products or services that is used in delivering value to the end customer. Spend analysis refers to the process of reviewing and analyzing a company's spending patterns. Centralized and decentralized structures refer to the way authority and decision-making are distributed within an organization, while a hybrid structure combines aspects of both centralized and decentralized structures.

Question 15

A longer-term relationship should never include a joint product development relationship with shared development costs and intellectual property.

Accepted Answer

A longer-term relationship may include a joint product development relationship with shared development costs and intellectual property if both parties agree to it and have proper legal agreements in place to protect their respective interests. However, it is important to carefully consider the risks and benefits before entering into such an arrangement.

Question 16

Organizations tend to evolve through four phases as they become mature and sophisticated in their supply management strategy development.

Accepted Answer

This statement is true. Organizations typically evolve through four phases of supply management strategy development: initiation, fragmentation, coalescence, and maturity.

Question 17

A _____ is concerned with (1) the definition of businesses in which the corporation wishes to participate and (2) the acquisition and allocation of resources to these business units.
A) business unit strategy
B) supply management strategy
C) human resource management strategy
D) corporate strategy
E) functional strategy

Accepted Answer

The definition of businesses and allocation of resources to them fall under the purview of corporate strategy. Business unit strategy is focused on specific units or divisions within the company, while supply management and human resource management are specific functional areas within the company.

Question 18

More complex logistics and currency fluctuations require measuring all relevant costs before committing to a worldwide source.

Accepted Answer

In order to make informed decisions about sourcing globally, it is important to consider all relevant costs, including logistics and currency fluctuations, to determine if it is financially viable.

Question 19

A _____ is an annual review of a firm's entire set of purchases.
A) cost analysis
B) price analysis
C) make-buy analysis
D) technology roadmap
E) spend analysis

Accepted Answer

A spend analysis is a comprehensive review of a company's spending across all categories, including purchases made from suppliers. It helps to identify areas where the company can reduce costs and improve sourcing strategies. A cost analysis or price analysis only evaluates specific purchases or suppliers, whereas a make-buy analysis focuses on decisions between producing goods in-house or outsourcing them. A technology roadmap outlines a company's plans for implementing technology over a period of time, but it does not specifically evaluate purchasing patterns.

Question 20

Global sourcing can be used to access new markets or to gain access to the same suppliers that are helping global companies become more competitive.

Accepted Answer

Global sourcing can be used for both purposes. It can enable companies to enter new markets by sourcing products or services from suppliers in those markets. It can also help companies to access the same suppliers that their competitors are using, allowing them to become more competitive themselves.

Quiz 6: Category Strategy Development

A _____ specifies how supply management will (1) support the desired competitive business-level strategy and (2) complement other functional strategies.

A _____ specifies how a group tasked with developing the strategy for the specific category being purchased will achieve goals that in turn will support higher level strategies.

Total cost of ownership typically includes costs associated with late delivery, poor quality, or other forms of supplier nonperformance.

In the initial stages of supply management strategy development, supply management adopts essentially a short-term approach and reacts to complaints from its internal customers when deliveries are late, quality is poor, or costs are too high.

When purchasers find that suppliers' capabilities are not high enough to meet current or future expectations, those suppliers should always be eliminated from the supply base.

A _____ is concerned with (1) the scope or boundaries of each business and the links with corporate strategy and (2) the basis on which the business unit will achieve and maintain a competitive advantage within an industry.

Which of the following is not one of the primary ways that companies create shareholder value?

Which of the following is not one of the steps in the strategic sourcing process?

Which of the following is not one of the questions to be addressed when conducting a spend analysis?

In the final and most advanced stage of supply management strategy development, supply management has assumed a tactical orientation with reporting directly to lower-level management and a simple internal, rather than a strong external, customer focus.

An e-RA is an offline, static auction between a buying organization and a group of pre-qualified suppliers who compete against each other to win the business to supply goods or services that have ill-defined specifications for design, quantity, quality, delivery, and related terms and conditions.

In the moderate development phase of supply management strategy development, supply management councils or lead buyers may be responsible for entire classes of commodities, and companywide databases by region may be developed to facilitate this coordination.

Longer-term relationships are sought with suppliers that have exceptional performance or unique technological expertise.

A _____ refers to a specific family of products or services that is used in delivering value to the end customer.

A longer-term relationship should never include a joint product development relationship with shared development costs and intellectual property.

Organizations tend to evolve through four phases as they become mature and sophisticated in their supply management strategy development.

A _____ is concerned with (1) the definition of businesses in which the corporation wishes to participate and (2) the acquisition and allocation of resources to these business units.

More complex logistics and currency fluctuations require measuring all relevant costs before committing to a worldwide source.

A _____ is an annual review of a firm's entire set of purchases.

Global sourcing can be used to access new markets or to gain access to the same suppliers that are helping global companies become more competitive.