Question 1

Indirect purchasing can be divided into two categories:
A) operations repair management and management of resources and operations
B) organizational resources management and management of repairs and operations
C) organizational repairs and maintenance / management of resources and organization
D) organizational resource management / maintenance resources and operations
E) operating resource management and maintenance repair and operations

Accepted Answer

Indirect purchasing is often categorized into operating resource management and maintenance, repair, and operations (MRO).

Question 2

The world of _________________ commerce has become essential to the purchases of ORM and MRO items.
A) business-to-consumer
B) consumer-to-consumer
C) manufacturer-to-manufacturer
D) vendor-to-vendor
E) business-to-business

Accepted Answer

ORM (Original Equipment Manufacturer) and MRO (Maintenance, Repair, and Operations) items are generally purchased in bulk by businesses or organizations rather than individual consumers. Therefore, the correct type of commerce for these purchases is business-to-business (B2B) commerce.

Question 3

To extend the commitment to increasing productivity in all departments within a given facility, many companies have adopted the concept of __________.
A) cost centers
B) profit centers
C) profit groups
D) cost groups
E) cost divisions

Accepted Answer

Profit centers are departments within a company that are responsible for generating revenue and profits. By adopting this concept, companies aim to increase productivity by incentivizing departments to generate profits and promoting a culture of efficiency and effectiveness. Cost centers, cost groups, and cost divisions are focused on cost reduction rather than revenue generation, while profit groups do not exist as a widely recognized concept in management.

Question 4

The __________ has become an indispensable part of modern management effectiveness.
A) accounting division
B) advertising department
C) buying department
D) marketing division
E) purchasing function

Accepted Answer

The purchasing function is responsible for managing the acquisition of goods and services needed for a business's operations. It involves identifying suppliers, negotiating prices and contracts, and managing the inventory to ensure timely delivery of needed items. This function is essential to the smooth operation of any business and has become an indispensable part of modern management effectiveness.

Question 5

Procurement is a very broad term. There is a broad push by _______________________ for companies to migrate all types of purchasing to e-procurement.
A) top management
B) the federal government
C) the MIS function
D) e-procurement software vendors
E) vendors

Accepted Answer

E-procurement software vendors have a vested interest in encouraging companies to adopt e-procurement solutions, as it directly benefits their business.

Question 6

It is important to first understand the two broad purchasing categories of purchasing materials, goods, and services in order to fully appreciate the role of e-purchasing.The two major purchasing categories are __________ and _________ materials.
A) direct / indirect
B) custom / common
C) regular / irregular
D) hard / soft
E) finished / raw

Accepted Answer

The two major purchasing categories are direct materials (which are used to make a final product) and indirect materials (which are not part of the final product but are necessary for operations). The other choices do not accurately reflect the two categories typically used in purchasing.

Question 7

s a __________, each department makes a direct contribution to the overall success of the total organization.
A) cost center
B) profit center
C) profit group
D) cost group
E) cost division

Accepted Answer

A profit center is a department or business unit that generates revenue and profits for the organization. Each profit center is responsible for its own costs and expenses, and its success is measured by its ability to generate profits. This means that each profit center has a direct contribution to the overall success of the organization.

Question 8

In most cases, the best place to apply electronic procurement is in circumstances where ___________________ and ___________________, especially when developing new products or technologies.
A) there is a casual relationship / a significant number of vendors are available
B) a very close business relationship must be established / ongoing cooperation is needed with suppliers
C) a close business relationship exists / a limited number of suppliers exists
D) a close business relationship exists / ongoing cooperation is needed
E) there is a casual relationship / cooperation is needed among suppliers

Accepted Answer

The answer of In most cases, the best place to...

Question 9

__________ professionals are primarily charged with the responsibility for controlling the total cost of ownership (TCO).
A) Accounting
B) Purchasing
C) Marketing
D) Buying
E) Operating

Accepted Answer

Purchasing professionals are directly responsible for controlling the total cost of ownership (TCO) by selecting suppliers who offer the best value for money. They negotiate prices and terms with suppliers, monitor supplier performance, and continually seek ways to reduce costs while maintaining quality. Accounting professionals may also be involved in tracking costs and analyzing financial data, but their primary focus is on financial reporting and compliance. Marketing and sales professionals are focused on generating revenue rather than controlling costs. "Buying" and "operating" are not distinct professional fields, but rather activities that fall under the purview of purchasing and operations professionals, respectively.

Question 10

_____ purchasing is concerned with critical maintenance and replacement parts, highly engineered machine parts, and manufacturing equipment..
A) MRO
B) ORM
C) CCM
D) MBO
E) DOP

Accepted Answer

MRO (Maintenance, Repair, and Operations) purchasing is specifically focused on acquiring critical maintenance and replacement parts, highly engineered machine parts, and manufacturing equipment to keep a company's operations running smoothly. ORM (Online Reputation Management), CCM (Customer Category Management), MBO (Management by Objectives), and DOP (Direct Order Processing) are not relevant to this particular type of purchasing.

Question 11

__________ materials are any commodity or service that is not directly involved in the production of finished goods.
A) Raw
B) Custom
C) Finished
D) Direct
E) Indirect

Accepted Answer

Indirect materials are those that are not directly involved in the production of finished goods but are necessary for the production process to take place. Examples of indirect materials include office supplies, cleaning supplies, and maintenance tools. Direct materials, on the other hand, are the raw materials that are directly involved in the production of finished goods.

Question 12

Recognizing that purchase price is but one element of the total cost picture, the scope of ____________ goes far beyond the purchase price for any given item.
A) contracting systems
B) Purchase Order Systems
C) systems contracting
D) materials contracting

Accepted Answer

Systems contracting encompasses a broader view of costs beyond just the purchase price, considering the total cost of acquisition, ownership, and operation of the purchased items.

Question 13

______ purchasing is a term used for purchasing office equipment, furniture, office supplies, forms, computers, travel services, maintenance services, light bulbs, janitorial supplies, and many other relatively low-cost items.
A) MRO
B) ORM
C) CCM
D) MBO
E) DOP

Accepted Answer

The answer of ______ purchasing is a term used for...

Question 14

Systems contracting is a purchasing management technique that seeks __________ of an item from the time a need is recognized to the time that need is fulfilled.
A) on time delivery
B) an overall increase in the quality
C) an overall increase in the price
D) an overall increase in the effectiveness
E) overall reduction in the cost

Accepted Answer

Systems contracting aims to reduce the overall cost of an item or service, from the initial identification of the need to the final delivery. The goal is to find the most cost-effective solution that meets the organization's requirements. Therefore, an overall reduction in cost is the best choice.

Question 15

The commercial purchasing literature on e-procurement has suggested ____________________ for businesses and organizations can be realized by migrating to electronic procurement systems for all of their purchasing requirements.
A) increases in sales or revenues
B) shorter delivery times
C) significant savings
D) more accurate order processing
E) less down time

Accepted Answer

The literature suggests that significant savings can be realized by migrating to electronic procurement systems. While some of the other options may be benefits of e-procurement, the most commonly cited advantage is cost savings through increased efficiency and reduced manual processes.

Question 16

__________ materials are directly related to the production of the finished goods.
A) Raw
B) Custom
C) Finished
D) Direct
E) Indirect

Accepted Answer

The answer of __________ materials are directly related to the...

Question 17

nother problem (with indirect purchasing) is the tendency for employees to intermittently buy indirect items "off contract." This practice is referred to as ________________.
A) local purchasing
B) OC purchasing
C) maverick buying
D) MP
E) IOC purchasing

Accepted Answer

Maverick buying refers to employees going outside of the established procurement processes and purchasing items without going through the proper channels or following the designated contracts. This can result in higher costs, inconsistencies in quality, and a lack of control over spending.

Question 18

Many of the e-procurement software vendors fail to take into account __________________________ and getting suppliers to participate in the e-procurement system.
A) the total cost of implementing these systems
B) the difficulty of realizing savings during the development and deployment phases of the transition
C) the cost of training employees
D) All of the above
E) "A" and "C" only

Accepted Answer

Many e-procurement software vendors fail to take into account the total cost of implementing these systems, the difficulty of realizing savings during the development and deployment phases of the transition, and the cost of training employees. Thus, option D is the correct choice.

Question 19

The problem with _____________________ is the lack of standardization, tedious paper work, delays, and errors.
A) direct buying
B) direct purchasing
C) centralized buying
D) indirect purchasing
E) decentralized purchasing

Accepted Answer

The answer of The problem with _____________________ is the lack...

Quiz 7: Purchasing Procedures, E-Purchasing, and Systems Contracting

Indirect purchasing can be divided into two categories:

The world of _________________ commerce has become essential to the purchases of ORM and MRO items.

To extend the commitment to increasing productivity in all departments within a given facility, many companies have adopted the concept of __________.

The __________ has become an indispensable part of modern management effectiveness.

Procurement is a very broad term. There is a broad push by _______________________ for companies to migrate all types of purchasing to e-procurement.

It is important to first understand the two broad purchasing categories of purchasing materials, goods, and services in order to fully appreciate the role of e-purchasing.The two major purchasing categories are __ and _ materials.

s a __________, each department makes a direct contribution to the overall success of the total organization.

In most cases, the best place to apply electronic procurement is in circumstances where _ and _, especially when developing new products or technologies.

__________ professionals are primarily charged with the responsibility for controlling the total cost of ownership (TCO) .

_____ purchasing is concerned with critical maintenance and replacement parts, highly engineered machine parts, and manufacturing equipment..

__________ materials are any commodity or service that is not directly involved in the production of finished goods.

Recognizing that purchase price is but one element of the total cost picture, the scope of ____________ goes far beyond the purchase price for any given item.

______ purchasing is a term used for purchasing office equipment, furniture, office supplies, forms, computers, travel services, maintenance services, light bulbs, janitorial supplies, and many other relatively low-cost items.

Systems contracting is a purchasing management technique that seeks __________ of an item from the time a need is recognized to the time that need is fulfilled.

The commercial purchasing literature on e-procurement has suggested ____________________ for businesses and organizations can be realized by migrating to electronic procurement systems for all of their purchasing requirements.

__________ materials are directly related to the production of the finished goods.

nother problem (with indirect purchasing) is the tendency for employees to intermittently buy indirect items "off contract." This practice is referred to as ________________.

Many of the e-procurement software vendors fail to take into account __________________________ and getting suppliers to participate in the e-procurement system.

The problem with _____________________ is the lack of standardization, tedious paper work, delays, and errors.