Question 1

Warranty costs are part of

Accepted Answer

A)  Acquisition cost 
B)  Ownership costs 
C)  Post-ownership costs 
D)  None of these choices are correct 
A)  Acquisition cost 
B)  Ownership costs 
C)  Post-ownership costs 
D)  None of these choices are correct

Question 2

Outsourcing allows a firm to achieve an improved focus on its core competencies.

Accepted Answer

A) True 
 B)False

Question 3

An organizationally driven reason for outsourcing is that it can transform the organization.

Accepted Answer

A) True 
 B)False

Question 4

Inventory turn values that are considered good differ by industry and the type of products being handled.

Accepted Answer

A) True 
 B)False

Question 5

Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers.

Accepted Answer

A) True 
 B)False

Question 6

In outsourcing, which of the following internal activities and decision responsibilities cannot be transferred to outside contractors?

Accepted Answer

A)  Activities involving people 
B)  Activities involving facilities 
C)  Activities involving equipment 
D)  Activities involving shareholders 
E)  Activities involving technology 
A)  Activities involving people 
B)  Activities involving facilities 
C)  Activities involving equipment 
D)  Activities involving shareholders 
E)  Activities involving technology

Question 7

Acquisition costs include which of the following costs?

Accepted Answer

A)  Quality costs 
B)  Maintenance and repair costs 
C)  Environmental costs 
D)  Supply chain costs 
E)  Customer dissatisfaction costs 
A)  Quality costs 
B)  Maintenance and repair costs 
C)  Environmental costs 
D)  Supply chain costs 
E)  Customer dissatisfaction costs

Question 8

These are supply chains that utilize strategies aimed at creating the lowest cost.

Accepted Answer

A)  Efficient supply chains 
B)  Risk-hedging supply chains 
C)  Responsive supply chains 
D)  Agile supply chains 
E)  Vendor-managed supply chains 
A)  Efficient supply chains 
B)  Risk-hedging supply chains 
C)  Responsive supply chains 
D)  Agile supply chains 
E)  Vendor-managed supply chains

Question 9

If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover?

Accepted Answer

A)  19.23 
B)  4.5 
C)  0.8654 
D)  0.2222 
E)  None of these choices are correct 
A)  19.23 
B)  4.5 
C)  0.8654 
D)  0.2222 
E)  None of these choices are correct

Question 10

Which of the following is not an organizationally driven reason for outsourcing?

Accepted Answer

A)  Improve effectiveness by focusing on what the firm does best. 
B)  Improve flexibility to meet changing demand for products and services. 
C)  Increase product and service value by improving response to customer needs. 
D)  Improve credibility and image by associating with superior providers. 
E)  All of these are organizationally driven reasons for outsourcing. 
A)  Improve effectiveness by focusing on what the firm does best. 
B)  Improve flexibility to meet changing demand for products and services. 
C)  Increase product and service value by improving response to customer needs. 
D)  Improve credibility and image by associating with superior providers. 
E)  All of these are organizationally driven reasons for outsourcing.

Question 11

The inventory turnover ratio used in measuring supply chain efficiency is found by the ratio of which of the following?

Accepted Answer

A)  Cost of goods sold/Average aggregate inventory value 
B)  Fixed costs/Variable costs 
C)  Sales costs/Marketing costs 
D)  Cost of goods sold/Cost to sell goods 
E)  Operations flow costs/Supplier flow costs 
A)  Cost of goods sold/Average aggregate inventory value 
B)  Fixed costs/Variable costs 
C)  Sales costs/Marketing costs 
D)  Cost of goods sold/Cost to sell goods 
E)  Operations flow costs/Supplier flow costs

Question 12

Two common measures to evaluate supply chain efficiency are the Consumer Price Index and the beta flow system.

Accepted Answer

A) True 
 B)False

Question 13

The six-step process for green sourcing does not include which of the following?

Accepted Answer

A)  Assess the opportunity. 
B)  Assess the supply base. 
C)  Confer with environmental groups. 
D)  Engage sourcing agents. 
E)  Institutionalize the sourcing strategy. 
A)  Assess the opportunity. 
B)  Assess the supply base. 
C)  Confer with environmental groups. 
D)  Engage sourcing agents. 
E)  Institutionalize the sourcing strategy.

Question 14

Capability sourcing refers to outsourcing the functions that a company does best to trusted key partners.

Accepted Answer

A) True 
 B)False

Question 15

A type of inventory where a customer actually allows the supplier to manage the inventory policy of an item or group of items for them.

Accepted Answer

A)  Vendor-directed inventory 
B)  Subcontracted inventory 
C)  Remote inventory 
D)  Vendor-managed inventory 
E)  Outsourced inventory 
A)  Vendor-directed inventory 
B)  Subcontracted inventory 
C)  Remote inventory 
D)  Vendor-managed inventory 
E)  Outsourced inventory

Question 16

An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value.

Accepted Answer

A) True 
 B)False

Question 17

This is commonly used for purchasing items that are more complex or expensive and where there may be a number of potential vendors.

Accepted Answer

A)  Request for purchase 
B)  Purchase order 
C)  Petty cash 
D)  Purchase directive 
E)  Request for proposal 
A)  Request for purchase 
B)  Purchase order 
C)  Petty cash 
D)  Purchase directive 
E)  Request for proposal

Question 18

An organizationally driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.

Accepted Answer

A) True 
 B)False

Question 19

Overemphasis on purchase price frequently results in failure to address other significant costs.

Accepted Answer

A) True 
 B)False

Question 20

Other things remaining the same, if the cost of goods sold decreases, then

Accepted Answer

A)  inventory turnover ratio and weeks of supply will both go up. 
B)  inventory turnover ratio will go down, but the weeks of supply will go up. 
C)  inventory turnover ratio and weeks of supply will both go down. 
D)  inventory turnover ratio will go up, but weeks of supply will go down. 
E)  inventory turnover ratio will stay the same, but weeks of supply will go down. 
A)  inventory turnover ratio and weeks of supply will both go up. 
B)  inventory turnover ratio will go down, but the weeks of supply will go up. 
C)  inventory turnover ratio and weeks of supply will both go down. 
D)  inventory turnover ratio will go up, but weeks of supply will go down. 
E)  inventory turnover ratio will stay the same, but weeks of supply will go down.

Exam 16: Global Sourcing and Procurement

Warranty costs are part of

Outsourcing allows a firm to achieve an improved focus on its core competencies.

An organizationally driven reason for outsourcing is that it can transform the organization.

Inventory turn values that are considered good differ by industry and the type of products being handled.

Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers.

In outsourcing, which of the following internal activities and decision responsibilities cannot be transferred to outside contractors?

Acquisition costs include which of the following costs?

These are supply chains that utilize strategies aimed at creating the lowest cost.

If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover?

Which of the following is not an organizationally driven reason for outsourcing?

The inventory turnover ratio used in measuring supply chain efficiency is found by the ratio of which of the following?

Two common measures to evaluate supply chain efficiency are the Consumer Price Index and the beta flow system.

The six-step process for green sourcing does not include which of the following?

Capability sourcing refers to outsourcing the functions that a company does best to trusted key partners.

A type of inventory where a customer actually allows the supplier to manage the inventory policy of an item or group of items for them.

An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value.

This is commonly used for purchasing items that are more complex or expensive and where there may be a number of potential vendors.

An organizationally driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.

Overemphasis on purchase price frequently results in failure to address other significant costs.

Other things remaining the same, if the cost of goods sold decreases, then

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