Exam 19: Supply Chain Management

________ discounts are normally set up on a graduated scale and are based on a firm's position in the channel of distribution and on the functions it performs in that channel.

Discuss the purchasing plan,briefly describing each of the five key elements of the plan.

Cash discounts are offered to customers as an incentive to pay for merchandise promptly.

Small business people need to remember that:

A noncumulative quantity discount grants a discount if a large enough volume of merchandise is purchased in a single order.

Although there are many costs associated with carrying large levels of inventory,the opportunity costs of large inventories are virtually nonexistent.

Which of the following cost typically is included in obtaining materials and inventory?

A small business owner needs to do which of the following well in order to successfully implement a TQM program?

Because of its assumptions,the simplest reorder model is no longer valid or useful to the small business owner in today's dynamic business environment.

Which of the following are the categories of quality?

The small business owner needs to know ________ in order to avoid stockouts and calculate safety stock.

The EOQ formula simply balances the ordering cost and the carrying cost of the small business owner's inventory so that total costs are ________.

In an "F.O.B.seller" (shipment)contract,both title and risk of loss transfer to the buyer when the seller delivers the goods to the carrier or shipper.

Selling terms are as important to the small business as the actual price of the goods and services being purchased.

The purpose of a vendor certification program is to create a list of acceptable vendors that the small business owner can spread his/her orders among to avoid stocking out due to delays in shipments.

The best purchase price is the lowest price at which the owner can obtain goods and services of the best quality.

Many small businesses build a(n)________,or cushion,into their inventories in case demand runs ahead of the anticipated usage rate.

Risk of loss always passes with title to the goods.

What does the small business owner give up if he/she doesn't take advantage of a vendor's discount? Demonstrate by calculating the interest rate on a $12,000 invoice that is 3/10 net 30.

If a vendor offers a firm 2/10,net 30,and the firm doesn't take it,the firm is paying an interest rate of over 36% on an annual basis.