Multiple Choice Questions

1. The small business gains what advantage by selling on consignment?

a. better customer service

b. receiving absolute title to the goods prior to paying for them

c. shorter lead time when reordering than with standard contracts

d. not bearing the risk of loss for the consigned goods

2. Improving quality:

a. reduces rework time

b. increases worker productivity

c. lowers the associated cost with scrap

d. all of the above

3. Holding or carrying costs include the costs of:

a. processing a purchase order

b. ordering materials and inventory

c. receiving and inspecting items and all administrative costs

d. insurance, taxes, depreciation, etc

4. The small business owner needs to know ______ in order to avoid stockouts and calculate safety stock.

a. the minimum level of stock allowable

b. the lead time

c. the EOQ

d. the usage rate

5. A buyer owns a retail shop in Baltimore. A seller is a manufacturer in San Diego. The buyer orders from seller to be shipped "F.O.B. San Diego." Risk of loss passes to the buyer when:

a. the goods are identified to the contract

b. the goods are delivered to the buyer's retail shop

c. the contract is made

d. the seller delivers the goods to the carrier

6. The first rule governing transfer of title and risk of loss states that:

a. the buyer has both title and risk of loss as soon as the goods are paid for, regardless of their physical location

b. title transfers to the buyer as soon as the goods are in the hands of the carrier

c. title transfers to the buyer as soon as the goods are delivered

d. the supplier and small business may agree to a shift of the risk of loss at any time during the transaction between them

7. An alternative to a two-bin system, wherever space or the type of item doesn't fit the system, would be a:

a. tag system

b. POS system

c. punch card system

d. physical inventory system

8. Kleptomaniacs have a compulsive need to steal even though they have little, if any, need for the items they shoplift. Kleptomaniacs account for less than ______ percent of shoplifters.

a. 15

b. 7

c. 10

d. 5

9. Which of the following could be a reason why an employee steals?

a. greed

b. temptation

c. opportunity

d. all of the above

10. The primary human elements on which successful JIT systems are built are:

a. mutual trust and teamwork and empowerment

b. high profit and lower labor cost

c. lower labor cost and productivity

d. mutual trust and teamwork & productivity

11. The first objective of a job analysis is to develop a job description. The second objective is to create a:

a. job specification

b. advertisement in the newspaper

c. job interview outline

d. none of the above

12. A is used by the owner of a small business to determine wage and salary increases, need for training, overall job progress, etc., among other things.

a. job redesign

b. human resource plan

c. compensation plan

d. performance appraisal

13. When a small business owner increases the variety of skills needed on a job, permits the worker to complete an entire job rather than a portion of it, and gives the worker more freedom of decision on how to perform the job, the owner is using:

a. job enlargement

b. job rotation

c. job simplification

d. job enrichment

14. This act was passed by Congress to supplement the Clayton Act, providing the power to prevent "unfair methods of competition in commerce or unfair or deceptive acts in commerce."

a. The Miller-Tydings Act

b. The Robinson-Patman Act

c. The Federal Trade Commission Act

d. The Sherman Act

15. Which of the following phrases is sufficient to disclaim an implied sales warranty?

a. "Seller makes no warranties on this product whatsoever"

b. "No warranties"

c. "As is"

d. None of the above. A merchant cannot disclaim sales warranties.

16. An agent's duties when executing agency include:

a. performance of duties according to the principal's instruction and notification of the principal of all facts concerning the subject matter of the agency

b. reimbursement of the principal for all expenses incurred in the execution of the agency

c. indemnification of the principal for any authorized payments or any loss incurred by the agency

d. all of the above

17. The small company's purchasing plan is closely linked to which of the other functional areas?

a. marketing and sales

b. production and engineering

c. finance and accounting

d. all of the above

18. "F.O.B. buyer" means that:

a. both title and risk of loss pass to the buyer immediately upon payment of the contract regardless of location of the goods

b. title passes to the buyer when the seller delivers the goods to the shipper

c. risk of loss passes to the buyer when the seller delivers the goods to the buyer's place of business

d. the buyer pays all shipping and transportation costs

19. The most effective businesses know that what is required is not simply the technology but the with suppliers who are themselves technologically sophisticated enough to interact on a real time basis to deliver what is needed when it is needed.

a. electronic data interchange

b. critical strategic alliances

c. credit terms

d. none of the above

20. In the stages of team development, a team is at the performance stage when it:

a. achieves commitment to the process and task

b. has its highest expectations

c. begins to reset its goals and roles

d. recognizes fully the time and effort that will be involved

21. In terms of contractual capacity:

a. intoxicated individuals are generally always held liable for their contractual obligations, regardless of their condition upon execution of the contract

b. if a minor benefits from a contract and then disaffirms it, he/she must fulfill the duty of restoration

c. a minor can disaffirm and walk away from a contract even if already executed and the minor has benefited from it

d. an insane person can never have contractual capacity by definition

22. Quality improvement efforts must ultimately focus on:

a. the manufacturing process

b. the product

c. the customer

d. the purchasing process

23. A firm's expresses the number of times per year the business sells all of its inventory.

a. liquidity ratio

b. inventory turnover ratio

c. quick ratio

d. operating ratio

24. If you were evaluating your college administration for effective leadership behaviors, you need to look for:

a. their short-term focus, their ability to see the detail needing to be accomplished

b. the ability to encourage creativity in employees

c. their ability to husband and protect resources from misuse

d. all of these things

25. What are, if any, the possible defenses against a valid contract which may cause it to be unenforceable?

a. control and offer

b. agreement and offer

c. genuineness of assent and form

d. agreement and legal