Question 1

The advantages resulting from concentrating purchases with a single supplier include:

Accepted Answer

A) protection from fraudulent vendors and excess inventory. 
B) a longer lead time. 
C) lower usage rates. 
D) the ability to negotiate the best price package. 
A) protection from fraudulent vendors and excess inventory. 
B) a longer lead time. 
C) lower usage rates. 
D) the ability to negotiate the best price package.

Question 2

________ is (are)one of the elements of the total inventory costs.

Accepted Answer

A) Demand 
B) Set-up costs 
C) Standing costs 
D) Safety stock 
A) Demand 
B) Set-up costs 
C) Standing costs 
D) Safety stock

Question 3

What should the role of price be as an element of the purchasing process?

Accepted Answer

The best purchase price is the lowest pr

Question 4

Which of the following represents the cost of the units in the basic EOQ model?

Accepted Answer

A) Q/2 × H 
B) D × C 
C) D/Q × S 
D) (L × U)+ S 
A) Q/2 × H 
B) D × C 
C) D/Q × S 
D) (L × U)+ S

Question 5

The consequences for the small business owner of a vendor certification program include:

Accepted Answer

A) using one supplier for the majority of their inventory needs. 
B) guaranteed quality and price for selected items. 
C) that the vendor will not supply components to competitors. 
D) less government scrutiny and regulation of their business. 
A) using one supplier for the majority of their inventory needs. 
B) guaranteed quality and price for selected items. 
C) that the vendor will not supply components to competitors. 
D) less government scrutiny and regulation of their business.

Question 6

A key element to Deming's 14 Points is:

Accepted Answer

A) ordering on the basis of price. 
B) changing suppliers frequently. 
C) conducting frequent quality inspections. 
D) developing long-term relationships with vendors. 
A) ordering on the basis of price. 
B) changing suppliers frequently. 
C) conducting frequent quality inspections. 
D) developing long-term relationships with vendors.

Question 7

The EOQ solution balances the ordering costs and the carrying costs of an inventory item so that total costs are minimized.

Accepted Answer

A) True 
 B)False

Question 8

The business owner (called the consignor)may return any unsold merchandise to the supplier without obligation.

Accepted Answer

A) True 
 B)False

Question 9

It is better to maintain too little rather than too much inventory because there are significant storage costs for excess inventory,but few if any costs associated with understocking inventory.

Accepted Answer

A) True 
 B)False

Question 10

Managers have discovered that a quality approach to doing business:

Accepted Answer

A) is much more expensive than a nonquality focus,but worth it. 
B) can lower employee turnover,increase market share,and decrease costs. 
C) is easier to achieve than expected when TQM is implemented in an existing business. 
D) works in manufacturing but is not applicable to the purchasing process. 
A) is much more expensive than a nonquality focus,but worth it. 
B) can lower employee turnover,increase market share,and decrease costs. 
C) is easier to achieve than expected when TQM is implemented in an existing business. 
D) works in manufacturing but is not applicable to the purchasing process.

Question 11

For the typical small business owner,price is always a substantial factor when purchasing inventory and supplies.

Accepted Answer

A) True 
 B)False

Question 12

Albemarle Sprinkler Company purchases the sprinkler heads for its line of lawn sprinklers from a supplier. Albemarle's production manager wonders how many sprinkler heads she should order for the next six months. The company's marketing manager forecasts sales to be 29,400 units for the upcoming six months. The purchasing manager has negotiated a price of $6.47 per head. The production manager estimates that it costs $17.25 to place an order with the supplier and $2.97 to store a sprinkler head in inventory for six months.
-What is Albemarle's Economic Order Quantity (EOQ)for the upcoming six months?

Accepted Answer

A) 292 heads 
B) 358 heads 
C) 396 heads 
D) 584 heads 
A) 292 heads 
B) 358 heads 
C) 396 heads 
D) 584 heads

Question 13

Compute the reorder point for a small business owner using the following data.
∙ Lead time =7 days
∙ Usage rate=28 units/day
∙ Safety stock=56 units
∙ EOQ=740 units

Accepted Answer

Reorder Point = (L x U)+ S
Reo

Question 14

A consignment contract means that the supplier (i.e. ,the consignor)retains title and risk of loss for the consigned merchandise.

Accepted Answer

A) True 
 B)False

Question 15

Both a buyer and a seller cannot have an insurable interest in the same goods.

Accepted Answer

A) True 
 B)False

Question 16

When shopping for a vendor,a small business owner should seek:

Accepted Answer

A) the best transfer of risk possible. 
B) the lowest price. 
C) the best price at acceptable quality. 
D) to change vendors often in order to get the lowest price. 
A) the best transfer of risk possible. 
B) the lowest price. 
C) the best price at acceptable quality. 
D) to change vendors often in order to get the lowest price.

Question 17

What are the two basic tenets of TQM?

Accepted Answer

A) employee involvement 
B) teamwork 
C) technology 
D) Both A and B 
A) employee involvement 
B) teamwork 
C) technology 
D) Both A and B

Question 18

"F.O.B.seller" means that:

Accepted Answer

A) title passes to the buyer when the seller delivers the goods to the buyer. 
B) risk of loss transfers to the buyer when the seller delivers the goods to the carrier. 
C) the seller pays all shipping and transportation costs. 
D) the buyer has both title and risk of loss as soon as the goods are paid for,regardless of their physical location. 
A) title passes to the buyer when the seller delivers the goods to the buyer. 
B) risk of loss transfers to the buyer when the seller delivers the goods to the carrier. 
C) the seller pays all shipping and transportation costs. 
D) the buyer has both title and risk of loss as soon as the goods are paid for,regardless of their physical location.

Question 19

If a small business owner wanted an international vendor,he/she could use:

Accepted Answer

A) MacRae's Blue Book. 
B) Thomas.net. 
C) Kelly's Manufacturer and Merchant's Directory. 
D) Sources of State Information and State Industrial Directories. 
A) MacRae's Blue Book. 
B) Thomas.net. 
C) Kelly's Manufacturer and Merchant's Directory. 
D) Sources of State Information and State Industrial Directories.

Question 20

Identify and briefly describe the types of discounts a small business might receive from a manufacturer.

Accepted Answer

Vendors typically offer three types of d

Exam 19: Supply Chain Management

The advantages resulting from concentrating purchases with a single supplier include:

________ is (are)one of the elements of the total inventory costs.

What should the role of price be as an element of the purchasing process?

Which of the following represents the cost of the units in the basic EOQ model?

The consequences for the small business owner of a vendor certification program include:

A key element to Deming's 14 Points is:

The EOQ solution balances the ordering costs and the carrying costs of an inventory item so that total costs are minimized.

The business owner (called the consignor)may return any unsold merchandise to the supplier without obligation.

It is better to maintain too little rather than too much inventory because there are significant storage costs for excess inventory,but few if any costs associated with understocking inventory.

Managers have discovered that a quality approach to doing business:

For the typical small business owner,price is always a substantial factor when purchasing inventory and supplies.

Compute the reorder point for a small business owner using the following data. ∙ Lead time =7 days ∙ Usage rate=28 units/day ∙ Safety stock=56 units ∙ EOQ=740 units

A consignment contract means that the supplier (i.e. ,the consignor)retains title and risk of loss for the consigned merchandise.

Both a buyer and a seller cannot have an insurable interest in the same goods.

When shopping for a vendor,a small business owner should seek:

What are the two basic tenets of TQM?

"F.O.B.seller" means that:

If a small business owner wanted an international vendor,he/she could use:

Identify and briefly describe the types of discounts a small business might receive from a manufacturer.

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Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

Buying an Existing Business

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

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