Question 1

The emphasis of the _____ is on obtaining sufficient current revenue to pay for operating cost rather than on profit.

Accepted Answer

A) price volume model 
B) promotional pricing model 
C) revenue pricing model 
D) market skimming model 
E) competition pricing model 
A) price volume model 
B) promotional pricing model 
C) revenue pricing model 
D) market skimming model 
E) competition pricing model

Question 2

The _____ is an approach to estimating the different components that make up the supplier's per unit price per unit of product or service, i.e., what the product or service should cost in a theoretical world.

Accepted Answer

A) market skimming model 
B) make-buy analysis 
C) competition pricing model 
D) rate-of-return model 
E) Should-cost model 
A) market skimming model 
B) make-buy analysis 
C) competition pricing model 
D) rate-of-return model 
E) Should-cost model

Question 3

Strategic cost management approaches do not vary according to the stage of the product life cycle.

Accepted Answer

A) True 
 B)False

Question 4

_____ applies the price/cost equation across multiple processes that span two or more organizations across a supply chain.

Accepted Answer

A) Make-buy analysis 
B) Price analysis 
C) Cost analysis 
D) Target costing 
E) Total cost analysis 
A) Make-buy analysis 
B) Price analysis 
C) Cost analysis 
D) Target costing 
E) Total cost analysis

Question 5

In TCO, _____ is the amount paid to the supplier for the product, service, or capital equipment.

Accepted Answer

A) acquisition cost 
B) usage cost 
C) end-of-life cost 
D) purchase price 
E) opportunity cost 
A) acquisition cost 
B) usage cost 
C) end-of-life cost 
D) purchase price 
E) opportunity cost

Question 6

The market-share model is also known as the penetration pricing model and is an aggressive pricing approach for efficient producers because price is a direct function of cost.

Accepted Answer

A) True 
 B)False

Question 7

With the increased amount of outsourcing occurring in every global company today, the majority of the cost of goods sold is driven by suppliers, which are outside the four walls of an organization.

Accepted Answer

A) True 
 B)False

Question 8

The _____ presents pricing for individual products and services that is set to enhance the sales of the overall product line rather than to ensure the profitability of each product.

Accepted Answer

A) price volume model 
B) competition pricing model 
C) market skimming model 
D) promotional pricing model 
E) revenue pricing model 
A) price volume model 
B) competition pricing model 
C) market skimming model 
D) promotional pricing model 
E) revenue pricing model

Question 9

In setting target prices and target costs, the new-product development team should bear in mind the cardinal rule of target costing: the target cost can never be violated.

Accepted Answer

A) True 
 B)False

Question 10

In the _____, prices are set to achieve a high profit on each unit by selling to supply managers who are willing to pay a higher price because of a lack of supply management sophistication or who are willing to pay for products or services of perceived higher value.

Accepted Answer

A) market skimming model 
B) revenue pricing model 
C) promotional pricing model 
D) price volume model 
E) competition pricing model 
A) market skimming model 
B) revenue pricing model 
C) promotional pricing model 
D) price volume model 
E) competition pricing model

Question 11

All of the following are opportunities for supplier cost reductions except _____.

Accepted Answer

A) process capability 
B) plant utilization 
C) learning-curve effect 
D) ability to vote out the supplier's labor union 
E) management capability 
A) process capability 
B) plant utilization 
C) learning-curve effect 
D) ability to vote out the supplier's labor union 
E) management capability

Question 12

When supply exceeds demand, a buyer's market exists, and prices generally move downward.

Accepted Answer

A) True 
 B)False

Question 13

The main risk in target and cost-based pricing concerns volume variability.

Accepted Answer

A) True 
 B)False

Question 14

In many cases, the price charged by a seller may have little or no relationship to actual costs.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are examples of broad total cost of ownership categories except _____.

Accepted Answer

A) purchase price 
B) acquisition costs 
C) sales, general, and administrative overhead costs 
D) usage costs 
E) end-of-life costs 
A) purchase price 
B) acquisition costs 
C) sales, general, and administrative overhead costs 
D) usage costs 
E) end-of-life costs

Question 16

_____ = (Quality + Technology + Service + Cycle Time) ÷ Price.

Accepted Answer

A) Cost 
B) Efficiency 
C) Value 
D) Total cost 
E) Target cost 
A) Cost 
B) Efficiency 
C) Value 
D) Total cost 
E) Target cost

Question 17

In a/an _____ market structure, there exist identical products with minimal barriers for new suppliers to enter the market, and price is solely a function of the forces of supply and demand.

Accepted Answer

A) monopolistic 
B) oligopolistic 
C) communistic 
D) perfect competition 
E) Price is never solely a function of supply and demand, regardless of market structure. 
A) monopolistic 
B) oligopolistic 
C) communistic 
D) perfect competition 
E) Price is never solely a function of supply and demand, regardless of market structure.

Question 18

_____ include(s) all costs incurred when a product, service, or capital equipment reaches the end of its usable life, net of amounts received from the sale of remaining product or the equipment (salvage value).

Accepted Answer

A) Net present value costs 
B) Usage costs 
C) Purchase price 
D) End-of-life costs 
E) Opportunity costs 
A) Net present value costs 
B) Usage costs 
C) Purchase price 
D) End-of-life costs 
E) Opportunity costs

Question 19

_____ refers to the process of comparing supplier prices against external price benchmarks, without direct knowledge of the supplier's costs.

Accepted Answer

A) Cost analysis 
B) Make-buy analysis 
C) Target costing 
D) Price analysis 
E) Total cost analysis 
A) Cost analysis 
B) Make-buy analysis 
C) Target costing 
D) Price analysis 
E) Total cost analysis

Question 20

In the _____, the supplier simply takes its estimate of costs and adds a markup percentage to obtain the desired profit.

Accepted Answer

A) margin pricing model 
B) cost markup pricing model 
C) total cost analysis model 
D) penetration pricing model 
E) revenue pricing model 
A) margin pricing model 
B) cost markup pricing model 
C) total cost analysis model 
D) penetration pricing model 
E) revenue pricing model

The emphasis of the _____ is on obtaining sufficient current revenue to pay for operating cost rather than on profit.

The _____ is an approach to estimating the different components that make up the supplier's per unit price per unit of product or service, i.e., what the product or service should cost in a theoretical world.

Strategic cost management approaches do not vary according to the stage of the product life cycle.

_____ applies the price/cost equation across multiple processes that span two or more organizations across a supply chain.

In TCO, _____ is the amount paid to the supplier for the product, service, or capital equipment.

The market-share model is also known as the penetration pricing model and is an aggressive pricing approach for efficient producers because price is a direct function of cost.

With the increased amount of outsourcing occurring in every global company today, the majority of the cost of goods sold is driven by suppliers, which are outside the four walls of an organization.

The _____ presents pricing for individual products and services that is set to enhance the sales of the overall product line rather than to ensure the profitability of each product.

In setting target prices and target costs, the new-product development team should bear in mind the cardinal rule of target costing: the target cost can never be violated.

In the _____, prices are set to achieve a high profit on each unit by selling to supply managers who are willing to pay a higher price because of a lack of supply management sophistication or who are willing to pay for products or services of perceived higher value.

All of the following are opportunities for supplier cost reductions except _____.

When supply exceeds demand, a buyer's market exists, and prices generally move downward.

The main risk in target and cost-based pricing concerns volume variability.

In many cases, the price charged by a seller may have little or no relationship to actual costs.

All of the following are examples of broad total cost of ownership categories except _____.

_____ = (Quality + Technology + Service + Cycle Time) ÷ Price.

In a/an _____ market structure, there exist identical products with minimal barriers for new suppliers to enter the market, and price is solely a function of the forces of supply and demand.

_____ include(s) all costs incurred when a product, service, or capital equipment reaches the end of its usable life, net of amounts received from the sale of remaining product or the equipment (salvage value).

_____ refers to the process of comparing supplier prices against external price benchmarks, without direct knowledge of the supplier's costs.

In the _____, the supplier simply takes its estimate of costs and adds a markup percentage to obtain the desired profit.

Introduction to Purchasing and Supply Chain Management

The Purchasing Process

Purchasing Policies and Procedures

Supply Management Integration for Competitive Advantage

Purchasing and Supply Management Organization

Supply Management and Commodity Strategy Development

Supplier Evaluation and Selection

Supplier Quality Management

Supplier Management and Development: Creating a World-Class Supply Base

Worldwide Sourcing

Purchasing and Supply Chain Analysis: Tools and Techniques

Negotiation and Conflict Management

Contract Management

Purchasing Law and Ethics

Lean Supply Chain Management

Purchasing Services

Supply Chain Information Systems and Electronic Sourcing

Performance Measurement and Evaluation

Purchasing and Supply Strategy Trends

Filters

Exam 11: Strategic Cost Management

The emphasis of the _____ is on obtaining sufficient current revenue to pay for operating cost rather than on profit.

The _____ is an approach to estimating the different components that make up the supplier's per unit price per unit of product or service, i.e., what the product or service should cost in a theoretical world.

Strategic cost management approaches do not vary according to the stage of the product life cycle.

_____ applies the price/cost equation across multiple processes that span two or more organizations across a supply chain.

In TCO, _____ is the amount paid to the supplier for the product, service, or capital equipment.

The market-share model is also known as the penetration pricing model and is an aggressive pricing approach for efficient producers because price is a direct function of cost.

With the increased amount of outsourcing occurring in every global company today, the majority of the cost of goods sold is driven by suppliers, which are outside the four walls of an organization.

The _____ presents pricing for individual products and services that is set to enhance the sales of the overall product line rather than to ensure the profitability of each product.

In setting target prices and target costs, the new-product development team should bear in mind the cardinal rule of target costing: the target cost can never be violated.

In the _____, prices are set to achieve a high profit on each unit by selling to supply managers who are willing to pay a higher price because of a lack of supply management sophistication or who are willing to pay for products or services of perceived higher value.

All of the following are opportunities for supplier cost reductions except _____.

When supply exceeds demand, a buyer's market exists, and prices generally move downward.

The main risk in target and cost-based pricing concerns volume variability.

In many cases, the price charged by a seller may have little or no relationship to actual costs.

All of the following are examples of broad total cost of ownership categories except _____.

_____ = (Quality + Technology + Service + Cycle Time) ÷ Price.

In a/an _____ market structure, there exist identical products with minimal barriers for new suppliers to enter the market, and price is solely a function of the forces of supply and demand.

_____ include(s) all costs incurred when a product, service, or capital equipment reaches the end of its usable life, net of amounts received from the sale of remaining product or the equipment (salvage value).

_____ refers to the process of comparing supplier prices against external price benchmarks, without direct knowledge of the supplier's costs.

In the _____, the supplier simply takes its estimate of costs and adds a markup percentage to obtain the desired profit.

Introduction to Purchasing and Supply Chain Management

The Purchasing Process

Purchasing Policies and Procedures

Supply Management Integration for Competitive Advantage

Purchasing and Supply Management Organization

Supply Management and Commodity Strategy Development

Supplier Evaluation and Selection

Supplier Quality Management

Supplier Management and Development: Creating a World-Class Supply Base

Worldwide Sourcing

Purchasing and Supply Chain Analysis: Tools and Techniques

Negotiation and Conflict Management

Contract Management

Purchasing Law and Ethics

Lean Supply Chain Management

Purchasing Services

Supply Chain Information Systems and Electronic Sourcing

Performance Measurement and Evaluation

Purchasing and Supply Strategy Trends

Filters