"Purchasing and Supply Management" 15th Edition by: Johnson/Flynn

1. In manufacturing companies:

a. supply and operations coordination is not essential to operational excellence.

b. supply and operations coordination is essential to operational excellence.

c. most purchases are for resale.

d. purchases typically represent a small percentage of total expenditures.

e. production purchasing is outsourced and non-production purchasing is done in-house

2. Specialization within the supply function:

a. is necessary because most tasks are transactional.

b. has no impact on materials or services total cost of ownership.

c. increases operating costs beyond the benefits of specialization.

d. allows staff to develop expertise in particular areas.

e. is seldom required now that so many tasks are automated.

3. The organizational structure (centralized, decentralized, or hybrid) of the supply function:

a. influences supply processes, internal cross-functional relationships, and the procedures and systems employed.

b. influences the procedures and systems employed, but not supply processes or internal cross-functional relationships.

c. influences internal cross-functional relationships and the procedures and systems employed, but not supply processes.

d. influences supply processes, but not internal cross - functional relationships or the procedures and systems employed.

e. has little influence on supply processes, internal cross -functional relationships, or the\procedures and systems employed.

4. A purchasing consortium:

a. speeds up the purchasing process, but does not usually result in price concessions from suppliers.

b. results in price concessions from suppliers, but usually does not speed up the purchasing process.

c. consists of two or more independent organizations that combine requirements for materials, services and capital goods to gain better pricing, service and technology.

d. consists of two or more divisions of the same organization that combine requirements for materials, services and capital goods to gain better pricing, service and technology.

e. is a form of collaborative purchasing used only by the public sector to deliver a wider range of services at a lower total cost.

5. The objectives of supply are to obtain:

a. the right material at the right quality, quantity, price and cost at the right place fromthe right source with the right service.

b. the right quality materials in the right quantity at the right time and place from the right source at the right service level and at the right price.

c. the right material, at the right place, time, price, cost, and terms and conditions.

d. the right material or service at the right quality, quantity, place, and time from the right source at the right service.

e. the right quality and quantity at the right price and cost delivered to the right place at the right time from the right source.

6. To achieve time, quality or cost reduction targets, organizations may:

a. give internal users ownership of tasks and problems.

b. promote diversity in the workplace.

c. expand the size of the supply base.

d. commit resources to cross-functional team development.

e. cross-train employees in case of downsizing.

7. Close to 70 percent of the value of anygiven requirement is established during:

a. supplier evaluation and selection.

b. price negotiations.

c. identification of potential suppliers.

d. need recognition and description.

e. delivery and inventory management.

8. Which factors have a major influence on supply’s level in the organization:

a. the geographical location of the supply base.

b. the nature of the products or services acquired.

c. the extent to which supply and suppliers can provide competitive advantage.

d. the ratio of purchased material and services costs to total costs or total income.

e. the credentials of the existing supply personnel.

a. a and b.

b. b and c.

c. c and d.

d. a, c and d.

e. b, c and d.

9. To add the greatest value to the design of new products and services, the following functions should work together during the design stage:

a. the primary user, design engineering, supply and all other relevant functional areas such as accounting/finance, marketing and operations.

b. the primary user, design engineering, supply and accounting.

c. the primary user, design engineering and supply.

d. the primary user and supply.

e. the primary user and specifier.

10. Supply’s contribution to the organization’s competitive position depends on its ability to:

a. reduce costs.

b. enhance revenues.

c. manage assets.

d. a and c.

e. a, b and c.