Exam 16: Global Sourcing and Procurement

Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) and arm's length relationships (outsource)?

Functional products include staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations.

Green sourcing is only about finding new environmentally friendly technologies and increasing the use of recyclable materials.

The phenomenon that magnifies the variability in order quantities for goods as orders move through the supply chain from the customer to the producer is called the bullwhip effect.

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

Logistics is a term indicating transportation choices for goods produced internationally but consumed domestically.

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

The optimal strategy for functional products is to use a responsive supply chain.

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

The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but it does not include any of the costs related to disposing of the item after it is no longer useful.

When considering outsourcing, what should firms be sure to avoid?

A financially driven reason for outsourcing is that it can shorten cycle time.

Retailer behavior when stocking up during promotion periods (where the prices of goods are reduced) is called backward buying.

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

In Hau Lee's uncertainty framework to classify supply chains, a supply chain for functional products with an evolving supply process is called which of the following?

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply?

A financially driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries.

Which of the following is not an improvement-driven reason to outsource?

The total value of all items held in inventory for the firm valued at cost is which of the following?

A firm that controls most of the activities in its supply chain is said to be vertically integrated.