Question 1

Which of the following elements is Falseregarding Phase 1, Basic Beginnings, of supply management strategy development?
A) Quality/cost teams.
B) Longer-term contracts.
C) Volume leveraging.
D) Supply-base consolidation.
E) Early sourcing.

Accepted Answer

The answer of Which of the following elements is Falseregarding...

Question 2

Buying firms use competitive bidding when _____ is a dominant criterion and the required items or services have ______ specifications.
A) price….unique
B) delivery….unique
C) product performance….straightforward
D) design….unique
E) price….straightforward

Accepted Answer

Competitive bidding is most commonly used when the dominant criterion is price, and the required items or services have straightforward specifications. Unique or complex specifications may require a different procurement approach, such as negotiations or sole-source procurement. Therefore, option E is the best choice as it aligns with the conditions where competitive bidding is most effective.

Question 3

Which of the following elements is True regarding Phase 4, Fully Integrated Supply Chains, of supply management strategy development?
A) Cross-functional sourcing teams.
B) Cross-enterprise decision making.
C) Quality/cost teams.
D) International sourcing.
E) Total cost of ownership.

Accepted Answer

Phase 4, Fully Integrated Supply Chains, of supply management strategy development involves cross-enterprise decision making where decisions are made collaboratively and holistically by all relevant departments in the supply chain. The other elements listed are relevant to supply management strategy development but not specific to Phase 4.

Question 4

_____ is a simultaneous engineering approach that occurs between buyer and seller and seeks to maximize the benefits received by taking advantage of the supplier's design capabilities.
A) Supplier development
B) Early supplier design involvement
C) Total cost of ownership
D) Supplier relationship management
E) Supply base optimization

Accepted Answer

Early supplier design involvement is a strategy that involves the supplier in the design process in the early stages. This approach enables the supplier to maximize the benefits through the use of their design capabilities. It helps to optimize product performance, reduce lead times and improve overall product quality. This approach also strengthens the relationship between the buyer and the supplier.

Question 5

Which of the following is not True in regards to low-cost country sourcing?
A) Low-cost country sourcing can be used to access new markets or to gain access to the same suppliers that are helping global companies become more competitive.
B) Although there has been a strong push to source from emerging BRIC countries in search of lower costs, there has also been a strong push toward sourcing in these countries because of local content requirements established by governments in these areas.
C) Global sourcing is an opportunity to gain exposure to product and process technology, increase the number of available sources, satisfy countertrade requirements, and establish a presence in foreign markets.
D) Some buyers source globally to introduce competition to domestic suppliers.
E) Firms are highly experienced with global business processes and practices, and there are many personnel qualified to develop and negotiate with global suppliers or manage material pipelines.

Accepted Answer

This statement is not true. Many firms may not be highly experienced with global business processes and practices, and may not have personnel qualified to manage global suppliers or material pipelines. This can lead to challenges such as cultural differences, language barriers, and logistics issues.

Question 6

In the _____ of the process of supplier segmentation, the attractiveness of the buyer as a customer is significant and important to the supplier, but perhaps the historical volume of business with the buyer has been relatively low.
A) EXPLOIT segment
B) CORE segment
C) DEVELOP segment
D) PRICE segment
E) NUISANCE segment

Accepted Answer

The DEVELOP segment involves suppliers who are deemed to have potential for future growth, even though the historical volume of business with the buyer may have been low. The attractiveness of the buyer as a customer is significant and important to the supplier, as they perceive potential for increased revenue and profitability in the future.

Question 7

In the _____ of the process of supplier segmentation, the supplier views the buyer as an unimportant customer, and to make the situation worse, the volume the buyer has with this supplier is insignificant to the supplier.
A) NUISANCE segment
B) CORE segment
C) EXPLOIT segment
D) DEVELOP segment
E) None of the above.

Accepted Answer

In the nuisance segment of supplier segmentation, the supplier considers the buyer as an unimportant customer, and the volume of business conducted with the supplier is insignificant. This implies that the supplier might not provide excellent customer service or prioritize the buyer's needs since the supplier does not consider their business significant. Hence, choice A is the best answer.

Question 8

A/An _____ may be used as a decision support tool in which the sourcing team assigns a weight to the different categories and develops a numerical score for each supplier in each category, thereby developing a final performance score.
A) make-buy analysis
B) portfolio analysis matrix
C) reverse auction
D) e-catalog
E) supplier selection scorecard

Accepted Answer

The supplier selection scorecard is a decision support tool that allows the sourcing team to assign weights to different categories and develop a numerical score for each supplier in each category. This helps to develop a final performance score for each supplier, enabling the team to make a more informed decision on supplier selection. The other options listed (make-buy analysis, portfolio analysis matrix, reverse auction, and e-catalog) do not involve assigning weights and developing a numerical score, and therefore are not appropriate answers.

Question 9

Which of the following elements is Falseregarding Phase 2, Moderate Development, of supply management strategy development?
A) e-RAs.
B) Ad hoc supplier alliances.
C) International sourcing.
D) Global supply chains with external customer focus.
E) Supply-base optimization.

Accepted Answer

Phase 2, Moderate Development, typically involves more localized and less complex supply chain strategies, focusing on optimizing existing supplier relationships rather than having a global supply chain with an external customer focus.

Question 10

A/An _____ has demonstrated its performance capabilities through previous purchase contracts and, therefore, receives preference during the supplier selection process.
A) commodity supplier
B) preferred supplier
C) sole source supplier
D) new supplier responding to a RFQ
E) marginal supplier

Accepted Answer

A preferred supplier has already demonstrated its performance capabilities through previous purchase contracts and is given preference over other suppliers during the selection process. Therefore, they are the best choice based on the given statement.

Question 11

In the _____ of the process of supplier segmentation, the supplier views the buyer as a core customer, as the size of the account is significant to the supplier, and the account is also important from a strategic perspective.
A) COMMODITY segment
B) DEVELOP segment
C) EXPLOIT segment
D) NUISANCE segment
E) CORE segment

Accepted Answer

The supplier segmentation process includes five segments: commodity, core, develop, exploit, and nuisance. In the core segment, the supplier views the buyer as a core customer, and the account is significant to the supplier both from a size and strategic perspective. Therefore, E is the correct answer.

Question 12

_____ is the process of identifying cost considerations beyond unit price, transport, and tooling.
A) Total cost of ownership
B) Price analysis
C) Make-buy analysis
D) Portfolio analysis
E) Low-cost country sourcing

Accepted Answer

Total cost of ownership considers factors such as maintenance costs, training costs, storage costs, and disposal costs, in addition to the initial purchase price, transport, and tooling costs. This approach allows a more accurate assessment of the overall cost of a product or service.

Question 13

A _____ is used in regularly scheduled review meetings with suppliers, so that deficiencies in performance can be noted, discussed, and acted upon.
A) supplier scorecard
B) make-buy analysis
C) competitive bidding process
D) portfolio analysis
E) cost analysis

Accepted Answer

A supplier scorecard is a performance measurement tool that is used to evaluate a supplier's performance in different areas such as quality, delivery, cost, and responsiveness. It is typically used in regularly scheduled review meetings with suppliers, so that deficiencies in performance can be noted, discussed, and acted upon. The scorecard enables the buyer to provide constructive feedback to the supplier and to work collaboratively to improve the supplier's performance. Therefore, option A is the best choice for this question.

Question 14

Competitive bidding is most effective when all of the following conditions apply except when _____.
A) the buying firm can provide qualified suppliers with clear descriptions of the items or services to be purchased
B) volume is high enough to justify the cost and effort
C) the firm does not have a preferred supplier
D) the item is new or technically complex, with only vague specifications
E) None of the above conditions apply to competitive bidding.

Accepted Answer

Competitive bidding is not effective for new or technically complex items with vague specifications because it is difficult for suppliers to accurately price and bid on the item/service.

Question 15

In the _____ of the process of supplier segmentation, suppliers have a significant portion of the buyer's spend but do not view the buyer as an important customer.
A) NUISANCE segment
B) COMMODITY segment
C) DEVELOP segment
D) EXPLOIT segment
E) CORE segment

Accepted Answer

In the EXPLOIT segment of supplier segmentation, suppliers are characterized by having a significant portion of the buyer's spend but do not consider the buyer as a key customer. This situation suggests a power imbalance where the buyer may seek to exploit opportunities to improve the relationship or find alternative suppliers to reduce dependency.

Question 16

In supplier evaluation, a _____ includes those systems that release, schedule, and control the flow of work in an organization.
A) logistics system
B) cost accounting system
C) traffic management system
D) planning and control system
E) warehouse management system

Accepted Answer

Planning and control systems are responsible for releasing, scheduling, and controlling the flow of work in an organization. This includes managing production schedules, inventory levels, and other resources to ensure efficient operations. Logistics systems, cost accounting systems, traffic management systems, and warehouse management systems may be a part of the planning and control system, but they are not synonymous with it.

Question 17

_____ is the process of determining the appropriate number and mix of suppliers to maintain.
A) Make-buy analysis
B) Competitive bidding
C) Supply base optimization
D) Portfolio analysis
E) Price analysis

Accepted Answer

Supply base optimization is the process of determining the appropriate number and mix of suppliers to maintain. It involves evaluating supplier performance, identifying potential new suppliers, and reducing the number of suppliers when necessary to improve efficiency and reduce costs. Make-buy analysis is the process of deciding whether to produce a product or service in-house or to outsource it to a third-party supplier. Competitive bidding is a method of selecting a supplier by inviting multiple suppliers to submit bids for a project or contract. Portfolio analysis involves assessing a company's product or service offerings and allocating resources accordingly. Price analysis is the process of comparing prices from multiple suppliers to identify the most cost-effective option.

Question 18

Which of the following elements is Falseregarding Phase 3, Limited Integration, of supply management strategy development?
A) Supplier quality focus.
B) Global sourcing.
C) Ad hoc supplier alliances.
D) Volume leveraging.
E) Long-term contracts.

Accepted Answer

The answer of Which of the following elements is Falseregarding...

Question 19

Face-to-face negotiation is best when all of the following conditions apply except when _____.
A) the item is new or technically complex, with only vague specifications
B) the purchase requires agreement about a wide range of performance factors
C) the firm does not have a preferred supplier
D) the buyer requires the supplier to participate in the development effort
E) the supplier cannot determine risks and costs without additional input from the buyer

Accepted Answer

Face-to-face negotiation is particularly effective when the item is new or complex (A), when there are many performance factors to agree upon (B), when the supplier's participation in development is required (D), and when the supplier needs more information to assess risks and costs (E). However, not having a preferred supplier (C) does not specifically necessitate face-to-face negotiation; other methods could also be effective in such a scenario.

Question 20

A/An _____ is a formal request for the suppliers to prepare bids, based on the terms and conditions set by the buyer.
A) RFQ
B) purchase order
C) RFI
D) supplier analysis
E) e-RA

Accepted Answer

An RFQ (Request for Quotation) is a formal request made by the buyer to the suppliers to provide a quotation based on the terms and conditions set by the buyer. It is commonly used in procurement to solicit bids from suppliers for goods or services that the buyer is interested in purchasing.

Quiz 6: Category Strategy Development

Which of the following elements is Falseregarding Phase 1, Basic Beginnings, of supply management strategy development?

Buying firms use competitive bidding when _ is a dominant criterion and the required items or services have __ specifications.

Which of the following elements is True regarding Phase 4, Fully Integrated Supply Chains, of supply management strategy development?

_____ is a simultaneous engineering approach that occurs between buyer and seller and seeks to maximize the benefits received by taking advantage of the supplier's design capabilities.

Which of the following is not True in regards to low-cost country sourcing?

In the _____ of the process of supplier segmentation, the attractiveness of the buyer as a customer is significant and important to the supplier, but perhaps the historical volume of business with the buyer has been relatively low.

In the _____ of the process of supplier segmentation, the supplier views the buyer as an unimportant customer, and to make the situation worse, the volume the buyer has with this supplier is insignificant to the supplier.

A/An _____ may be used as a decision support tool in which the sourcing team assigns a weight to the different categories and develops a numerical score for each supplier in each category, thereby developing a final performance score.

Which of the following elements is Falseregarding Phase 2, Moderate Development, of supply management strategy development?

A/An _____ has demonstrated its performance capabilities through previous purchase contracts and, therefore, receives preference during the supplier selection process.

In the _____ of the process of supplier segmentation, the supplier views the buyer as a core customer, as the size of the account is significant to the supplier, and the account is also important from a strategic perspective.

_____ is the process of identifying cost considerations beyond unit price, transport, and tooling.

A _____ is used in regularly scheduled review meetings with suppliers, so that deficiencies in performance can be noted, discussed, and acted upon.

Competitive bidding is most effective when all of the following conditions apply except when _____.

In the _____ of the process of supplier segmentation, suppliers have a significant portion of the buyer's spend but do not view the buyer as an important customer.

In supplier evaluation, a _____ includes those systems that release, schedule, and control the flow of work in an organization.

_____ is the process of determining the appropriate number and mix of suppliers to maintain.

Which of the following elements is Falseregarding Phase 3, Limited Integration, of supply management strategy development?

Face-to-face negotiation is best when all of the following conditions apply except when _____.

A/An _____ is a formal request for the suppliers to prepare bids, based on the terms and conditions set by the buyer.