Exam 17: Purchasing Services

When freight is shipped _____, the buyer, or consignee, is responsible for choosing the carrier, arranging for the physical movement of the goods, paying the freight bill, and filing loss and damage claims.

A major advantage of a rail carrier is the wide range of items it is capable of hauling.

Shipping a high-priced component via air is never a cost-effective option.

Additional railcars can be added to a freight train with only a minimal increase in its total variable cost.

[A/An] _____ form the "purchase description" of what is being sourced.

A project's scope does not need to include any nondisclosure statements to protect the buying company's interest and the service provider's interest as well.

If indirect spend is to be leveraged, supply management must have a clear understanding of exactly what indirect goods and services are being purchased by individual SBUs.

Because of widespread industry differences, one company's indirect spend may be considered direct spend for another.

A two-day shipment by truck can often take a week or more by rail due to the extra handling involved.

_____ refers to a mode's or carrier's ability to provide the proper equipment and provide the appropriate services for a given product movement.

Which of the following is not one of the disadvantages of air carrier over other modes of transportation?

Historically, expenditures for indirect materials and services have received the same level of management attention as have direct materials.

_____ can be defined as that amount of an organization's total procurement budget that is purchased from unauthorized sources.

Air freight has a high variable-cost-to-fixed-cost ratio due to the high costs of operating a flight.

Air carriers haul the most amount of commercial freight because of their relative speed advantage.

_____ can be defined as how easy the professional service provider is to do business with.

Reverse logistics flow requires companies to find innovative methods of recovering and recycling products to minimize potential negative impacts on the environment.

Performance-based logistics has been widely adopted by the private sector.

The parameters on which a professional services supplier is evaluated should include, but not be limited to, quality, cost management, delivery, technical support, milestone achievement, and wavelength.

A PBL agreement and a SLA are similar concepts.