Question 1

Blanket or open-end purchase orders are suitable for buying

Accepted Answer

A)  Computers 
B)  Heavy equipment 
C)  Custom built components 
D)  Office supplies

Question 2

Which of the following is an advantage of a centralized purchasing department?

Accepted Answer

A)  Less bureaucracy 
B)  More frequent shipments 
C)  Specialization 
D)  Closer contact between buyer and user

Question 3

The total cost of ownership for Supplier A is $2,670,000.The total cost of ownership for Supplier B is $1,750,000.The total cost of ownership for Supplier C is $2,990,000.Using Total Cost Analysis, it will be more cost-effective to use

Accepted Answer

A)  Supplier A 
B)  Supplier B 
C)  Supplier C 
D)  Cannot be determined

Question 4

Procurement credit cards can be used for small purchases including meals, lodging, and travel expenses.

Accepted Answer

A) True 
 B)False

Question 5

The primary goals of purchasing include all EXCEPT:

Accepted Answer

A)  Secure materials at the lowest cost 
B)  Maximize customer satisfaction 
C)  Improve the quality of finished goods produced 
D)  Ensure the highest quality raw materials are purchased

Question 6

Inventory Turnover can be calculated by:

Accepted Answer

A)  Ratio of cost of goods sold over average inventory cost 
B)  Ratio of average inventory cost over cost of goods sold 
C)  Ratio of inventory days in stock over average inventory cost 
D)  Ratio of average inventory cost over inventory days in stock

Question 7

Which of the following is a reason for favoring single sourcing?

Accepted Answer

A)  Encourages competition among suppliers 
B)  Spreads the risk of supply interruption 
C)  Reduces variabilities in quality levels 
D)  Reduces information about new processing technologies

Question 8

Which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers?

Accepted Answer

A)  Lower shipping rates due to lower tariffs 
B)  Lower product cost 
C)  Better product quality 
D)  Overseas supplier holding the patent to the product

Question 9

The BOEHM Cell Phone Company has developed a new series of phones that it plans to bring to the market in the next 18 months.Management is considering whether to produce the product in-house or to contract out the purchasing and manufacturing of their new cell phones.
Provide FOUR conditions that would favor outsourcing and FOUR conditions that would favor making the cell phones in-house.

Accepted Answer

The answer of The BOEHM Cell Phone Company has developed...

Question 10

When a product is purchased which is complicated or highly technical a ______________may be issued instead of a request for quotation.

Accepted Answer

A)  Request for proposal 
B)  Purchase order 
C)  Contract for sale 
D)  Sales order

Question 11

Which of the following is NOT a potential challenge for global sourcing?

Accepted Answer

A)  Long delivery lead times 
B)  Costs involved in selecting foreign suppliers 
C)  Relaxed trade barriers 
D)  Labor and legal problems

Question 12

Which of the following would be a good reason to outsource (buy) versus making?

Accepted Answer

A)  To utilize existing capacity within a company's own firm 
B)  A firm lacks the technology or expertise to produce an item 
C)  To have more direct control over the design and production of an end item 
D)  No competent supplier presently produces the needed item

Question 13

A material requisition and a purchase requisition are the same thing.

Accepted Answer

A) True 
 B)False

Question 14

The Total Cost of Ownership Concept does NOT include quantitative factors.

Accepted Answer

A) True 
 B)False

Question 15

Use what you understand about the outsourcing decision (Make vs.Buy) to answer this question.List and explain three reasons a restaurant might decide to buy pre-made desserts from a supplier rather than making the goods from scratch.

Accepted Answer

The answer of Use what you understand about the outsourcing...

Exam 2: Purchasing Management

Blanket or open-end purchase orders are suitable for buying

Which of the following is an advantage of a centralized purchasing department?

The total cost of ownership for Supplier A is $2,670,000.The total cost of ownership for Supplier B is $1,750,000.The total cost of ownership for Supplier C is $2,990,000.Using Total Cost Analysis, it will be more cost-effective to use

Procurement credit cards can be used for small purchases including meals, lodging, and travel expenses.

The primary goals of purchasing include all EXCEPT:

Inventory Turnover can be calculated by:

Which of the following is a reason for favoring single sourcing?

Which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers?

When a product is purchased which is complicated or highly technical a ______________may be issued instead of a request for quotation.

Which of the following is NOT a potential challenge for global sourcing?

Which of the following would be a good reason to outsource (buy) versus making?

A material requisition and a purchase requisition are the same thing.

The Total Cost of Ownership Concept does NOT include quantitative factors.

Use what you understand about the outsourcing decision (Make vs.Buy) to answer this question.List and explain three reasons a restaurant might decide to buy pre-made desserts from a supplier rather than making the goods from scratch.