Question 1

The _____ clause in a contract stipulates that any benefits attributed to a third party (other than the buyer or supplier) identified in the contract must be enforced.

Accepted Answer

A)  governing law 
B)  severability 
C)  most favored customer 
D)  assignment and contracting 
E)  third-party rights 
A)  governing law 
B)  severability 
C)  most favored customer 
D)  assignment and contracting 
E)  third-party rights E

Question 2

A/An _____ occurs in situations in which a buyer is allowed to automatically discount the published purchase price by a negotiated percentage for all purchases from a given price list or catalog during the contract period.

Accepted Answer

A)  pricing agreement 
B)  international contract 
C)  national contract 
D)  open-ended order 
E)  None of the above. 
A)  pricing agreement 
B)  international contract 
C)  national contract 
D)  open-ended order 
E)  None of the above. A

Question 3

In the _____ approach to a systems supplier's level of service, the client company essentially turns over the entire outsourced service at a given point in time.

Accepted Answer

A)  modular 
B)  incremental 
C)  turnkey 
D)  shared 
E)  None of the above. 
A)  modular 
B)  incremental 
C)  turnkey 
D)  shared 
E)  None of the above. C

Question 4

The use of [a/an] _____, or third party, to help settle contractual disputes is the fastest-growing method of conflict resolution among contracting parties, both in the United States and overseas.

Accepted Answer

A)  rent-a-judge 
B)  litigation 
C)  mediation 
D)  mini trial 
E)  outside arbitrator 
A)  rent-a-judge 
B)  litigation 
C)  mediation 
D)  mini trial 
E)  outside arbitrator

Question 5

[A/An] _____ is an intervention between conflicting parties to promote reconciliation, settlement, or compromise.

Accepted Answer

A)  mediation 
B)  arbitration 
C)  litigation 
D)  mini trial 
E)  rent-a-judge 
A)  mediation 
B)  arbitration 
C)  litigation 
D)  mini trial 
E)  rent-a-judge

Question 6

_____ refers to the volatility of pricing conditions for major elements of the product, such as raw materials, purchased components, and labor.

Accepted Answer

A)  Supplier's ability to impact costs 
B)  Component market uncertainty 
C)  Process or technology uncertainty 
D)  Total dollar value of the purchase 
E)  None of the above. 
A)  Supplier's ability to impact costs 
B)  Component market uncertainty 
C)  Process or technology uncertainty 
D)  Total dollar value of the purchase 
E)  None of the above.

Question 7

The _____ clause of a contract specifies terms such as "current price," "prior price," and other criteria that determine how or if prices will be adjusted over the course of the contract.

Accepted Answer

A)  force majeure 
B)  most favored customer 
C)  key performance indicators and compensation 
D)  payment 
E)  intellectual property 
A)  force majeure 
B)  most favored customer 
C)  key performance indicators and compensation 
D)  payment 
E)  intellectual property

Question 8

All of the following are major issues to be considered with respect to e-commerce contract issues except _____.

Accepted Answer

A)  parity between electronic and paper records 
B)  enforceability of shrinkwrap, clickwrap, and boxtop agreements and licenses 
C)  attribution procedures 
D)  digital signatures 
E)  location of the supplier's facility in relationship to the buyer's location 
A)  parity between electronic and paper records 
B)  enforceability of shrinkwrap, clickwrap, and boxtop agreements and licenses 
C)  attribution procedures 
D)  digital signatures 
E)  location of the supplier's facility in relationship to the buyer's location

Question 9

Purchasers cannot rely on an arbitration clause contained in their forms, particularly if the suppliers' forms do not contain such a clause.

Accepted Answer

A) True 
 B)False

Question 10

There is automatic determination of copyright ownership unless the consultant and the client company execute an agreement specifically assigning the copyright to the client company.

Accepted Answer

A) True 
 B)False

Question 11

Firm fixed price contracts are generally applicable when the goods or services procured are expensive, complex, and important to the purchasing party or when there is a high degree of uncertainty regarding labor and material costs.

Accepted Answer

A) True 
 B)False

Question 12

The _____ clause of a contract specifies method of manufacture and quality requirements and may include language specific to terms of quality.

Accepted Answer

A)  liability 
B)  specifications, quality, and health, safety, environment 
C)  intellectual property 
D)  assignment and contracting 
E)  confidentiality 
A)  liability 
B)  specifications, quality, and health, safety, environment 
C)  intellectual property 
D)  assignment and contracting 
E)  confidentiality

Question 13

The most basic contractual pricing mechanism is called a/an _____ contract.

Accepted Answer

A)  fixed price with escalation 
B)  cost plus incentive fee 
C)  firm fixed price 
D)  cost-sharing 
E)  fixed price with redetermination 
A)  fixed price with escalation 
B)  cost plus incentive fee 
C)  firm fixed price 
D)  cost-sharing 
E)  fixed price with redetermination

Question 14

Cost-based contracts are inappropriate for situations in which there is a risk that a large contingency fee might be included.

Accepted Answer

A) True 
 B)False

Question 15

In a firm fixed price contract, if market prices _____ the stated contract price because of outside factors such as competition, changes in technology, or raw material prices, the _____ assumes the risk or financial loss.

Accepted Answer

A)  rise above….purchaser 
B)  stay the same….seller 
C)  stay the same….purchaser 
D)  fall below….purchaser 
E)  None of the above. 
A)  rise above….purchaser 
B)  stay the same….seller 
C)  stay the same….purchaser 
D)  fall below….purchaser 
E)  None of the above.

Question 16

The _____ clause of a contract stipulates the court of law where any disputes will be settled.

Accepted Answer

A)  third-party rights 
B)  notices 
C)  assignment and contracting 
D)  governing law 
E)  liability 
A)  third-party rights 
B)  notices 
C)  assignment and contracting 
D)  governing law 
E)  liability

Question 17

A/An _____ is a purchase contract that is made on a continuing basis for a specified or indefinite period of time, typically exceeding one year.

Accepted Answer

A)  one-time buy 
B)  short-term contract 
C)  spot contract 
D)  long-term contract 
E)  None of the above. 
A)  one-time buy 
B)  short-term contract 
C)  spot contract 
D)  long-term contract 
E)  None of the above.

Question 18

The _____ clause of a contract generally specifies who is responsible if there are injuries or damage, over the course of the contract, and any damages to be paid.

Accepted Answer

A)  supply and delivery 
B)  key performance indicators and compensation 
C)  definitions 
D)  free trade areas 
E)  liability 
A)  supply and delivery 
B)  key performance indicators and compensation 
C)  definitions 
D)  free trade areas 
E)  liability

Question 19

There is an incentive, at least in the short run, for suppliers to be inefficient in cost-based contracts because they are rewarded with higher prices.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are reasons for suppliers preferring long-term contracts except _____.

Accepted Answer

A)  the supplier receives better scheduling information, which in turn helps the supplier's production area improve efficiency and materials planning 
B)  detailed projections of volumes and delivery dates allow the supplier to better budget the flow of funds and investment stemming from the expectation of continued future volume 
C)  the supplier's organization lowers unit costs because fixed costs are spread out over the term of the contract 
D)  the supplier can afford to pay its workforce higher wages to increase productivity 
E)  the supplier can realize lower administrative costs over the term of the contract. 
A)  the supplier receives better scheduling information, which in turn helps the supplier's production area improve efficiency and materials planning 
B)  detailed projections of volumes and delivery dates allow the supplier to better budget the flow of funds and investment stemming from the expectation of continued future volume 
C)  the supplier's organization lowers unit costs because fixed costs are spread out over the term of the contract 
D)  the supplier can afford to pay its workforce higher wages to increase productivity 
E)  the supplier can realize lower administrative costs over the term of the contract.

The _____ clause in a contract stipulates that any benefits attributed to a third party (other than the buyer or supplier) identified in the contract must be enforced.

A/An _____ occurs in situations in which a buyer is allowed to automatically discount the published purchase price by a negotiated percentage for all purchases from a given price list or catalog during the contract period.

In the _____ approach to a systems supplier's level of service, the client company essentially turns over the entire outsourced service at a given point in time.

The use of [a/an] _____, or third party, to help settle contractual disputes is the fastest-growing method of conflict resolution among contracting parties, both in the United States and overseas.

[A/An] _____ is an intervention between conflicting parties to promote reconciliation, settlement, or compromise.

_____ refers to the volatility of pricing conditions for major elements of the product, such as raw materials, purchased components, and labor.

The _____ clause of a contract specifies terms such as "current price," "prior price," and other criteria that determine how or if prices will be adjusted over the course of the contract.

All of the following are major issues to be considered with respect to e-commerce contract issues except _____.

Purchasers cannot rely on an arbitration clause contained in their forms, particularly if the suppliers' forms do not contain such a clause.

There is automatic determination of copyright ownership unless the consultant and the client company execute an agreement specifically assigning the copyright to the client company.

Firm fixed price contracts are generally applicable when the goods or services procured are expensive, complex, and important to the purchasing party or when there is a high degree of uncertainty regarding labor and material costs.

The _____ clause of a contract specifies method of manufacture and quality requirements and may include language specific to terms of quality.

The most basic contractual pricing mechanism is called a/an _____ contract.

Cost-based contracts are inappropriate for situations in which there is a risk that a large contingency fee might be included.

In a firm fixed price contract, if market prices _ the stated contract price because of outside factors such as competition, changes in technology, or raw material prices, the _ assumes the risk or financial loss.

The _____ clause of a contract stipulates the court of law where any disputes will be settled.

A/An _____ is a purchase contract that is made on a continuing basis for a specified or indefinite period of time, typically exceeding one year.

The _____ clause of a contract generally specifies who is responsible if there are injuries or damage, over the course of the contract, and any damages to be paid.

There is an incentive, at least in the short run, for suppliers to be inefficient in cost-based contracts because they are rewarded with higher prices.

All of the following are reasons for suppliers preferring long-term contracts except _____.

Introduction to Purchasing and Supply Chain Management

The Purchasing Process

Purchasing Policy and Procedures

Supply Management Integration for Competitive Advantage

Purchasing and Supply Management Organization

Category Strategy Development

Supplier Evaluation and Selection

Supplier Quality Management

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

Worldwide Sourcing

Strategic Cost Management

Purchasing and Supply Chain Analysis: Tools and Techniques

Negotiation and Conflict 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 14: Contract Management

The _____ clause in a contract stipulates that any benefits attributed to a third party (other than the buyer or supplier) identified in the contract must be enforced.

A/An _____ occurs in situations in which a buyer is allowed to automatically discount the published purchase price by a negotiated percentage for all purchases from a given price list or catalog during the contract period.

In the _____ approach to a systems supplier's level of service, the client company essentially turns over the entire outsourced service at a given point in time.

The use of [a/an] _____, or third party, to help settle contractual disputes is the fastest-growing method of conflict resolution among contracting parties, both in the United States and overseas.

[A/An] _____ is an intervention between conflicting parties to promote reconciliation, settlement, or compromise.

_____ refers to the volatility of pricing conditions for major elements of the product, such as raw materials, purchased components, and labor.

The _____ clause of a contract specifies terms such as "current price," "prior price," and other criteria that determine how or if prices will be adjusted over the course of the contract.

All of the following are major issues to be considered with respect to e-commerce contract issues except _____.

Purchasers cannot rely on an arbitration clause contained in their forms, particularly if the suppliers' forms do not contain such a clause.

There is automatic determination of copyright ownership unless the consultant and the client company execute an agreement specifically assigning the copyright to the client company.

Firm fixed price contracts are generally applicable when the goods or services procured are expensive, complex, and important to the purchasing party or when there is a high degree of uncertainty regarding labor and material costs.

The _____ clause of a contract specifies method of manufacture and quality requirements and may include language specific to terms of quality.

The most basic contractual pricing mechanism is called a/an _____ contract.

Cost-based contracts are inappropriate for situations in which there is a risk that a large contingency fee might be included.

In a firm fixed price contract, if market prices _____ the stated contract price because of outside factors such as competition, changes in technology, or raw material prices, the _____ assumes the risk or financial loss.

The _____ clause of a contract stipulates the court of law where any disputes will be settled.

A/An _____ is a purchase contract that is made on a continuing basis for a specified or indefinite period of time, typically exceeding one year.

The _____ clause of a contract generally specifies who is responsible if there are injuries or damage, over the course of the contract, and any damages to be paid.

There is an incentive, at least in the short run, for suppliers to be inefficient in cost-based contracts because they are rewarded with higher prices.

All of the following are reasons for suppliers preferring long-term contracts except _____.

Introduction to Purchasing and Supply Chain Management

The Purchasing Process

Purchasing Policy and Procedures

Supply Management Integration for Competitive Advantage

Purchasing and Supply Management Organization

Category Strategy Development

Supplier Evaluation and Selection

Supplier Quality Management

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

Worldwide Sourcing

Strategic Cost Management

Purchasing and Supply Chain Analysis: Tools and Techniques

Negotiation and Conflict 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

In a firm fixed price contract, if market prices _ the stated contract price because of outside factors such as competition, changes in technology, or raw material prices, the _ assumes the risk or financial loss.