Question 1

The importance of effectively managing an organization's indirect spend is decreasing.

Accepted Answer

A) True 
 B)False

Question 2

A preferred supplier list database should be set up to generate a list of preferred suppliers based on previous project performance criteria.

Accepted Answer

A) True 
 B)False

Question 3

A performance-based logistics system seeks to drive the logistics service provider's performance by clearly delineating the buyer's preferred outcomes, not by transaction, but in terms of provider value-added and overall systems cost.

Accepted Answer

A) True 
 B)False

Question 4

A/An _____ involves picking smaller amounts of materials from a series of close by suppliers to be used in a lean or just-in-time environment.

Accepted Answer

A) common carrier 
B) exempt carrier 
C) milk run 
D) private carrier 
E) contract carrier

Question 5

_____ refers to a mode's or carrier's ability to provide service over a geographic area.

Accepted Answer

A) Speed 
B) Capability 
C) Total cost 
D) Accessibility 
E) Reliability

Question 6

_____ represents the link between a company and its customers.

Accepted Answer

A) Inbound logistics 
B) Intraorganizational movement 
C) Reverse logistics 
D) Outbound logistics 
E) Recovery and recycling

Question 7

Researching, defining, and writing clear and descriptive specifications is easy to accomplish.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are criteria used to measure transportation performance except _____.

Accepted Answer

A) speed 
B) reliability 
C) capability 
D) accessibility 
E) operator hours of service

Question 9

Although mode selection is usually not an issue for international ocean shipments, as in all strategic supplier selection decisions, carrier selection within the preferred mode is still paramount.

Accepted Answer

A) True 
 B)False

Question 10

Traditional cost accounting systems are designed to systematically track and consolidate indirect spend across an organization.

Accepted Answer

A) True 
 B)False

Question 11

Inland water carriers are usually accessible for most shippers, as lakes, rivers, and canals are widely dispersed throughout the country.

Accepted Answer

A) True 
 B)False

Question 12

A _____ is a key individual or unit that controls substantial indirect spending and that typically has a position of great authority within the organization.

Accepted Answer

A) purchasing consortium 
B) maverick spender 
C) 3PL 
D) power spender 
E) kanban

Question 13

_____ can be defined as the sum of all purchased goods and services that are not a direct, identifiable part of products or services delivered to the customer.

Accepted Answer

A) Direct spend 
B) MRO 
C) Indirect spend 
D) Consignment inventory 
E) Kanban

Question 14

As organizations continue to focus more and more on their core competencies and outsource noncore activities, they come to recognize that many of their necessary transportation and logistics services can, and should, be outsourced to experts specializing in transportation and logistics services.

Accepted Answer

A) True 
 B)False

Question 15

Every project must have a detailed scope that succinctly defines the project's parameters to help avoid misunderstandings between the buyer and the service provider.

Accepted Answer

A) True 
 B)False

Question 16

The most significant advantage of a motor carrier is its relatively lower variable cost.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a key part of a project's scope?

Accepted Answer

A) Project deliverables. 
B) Milestones and deadlines. 
C) Service provider's background and experience. 
D) Approved budget. 
E) Performance metrics.

Question 18

_____ includes movement of materials between production facilities within the same organization as well as movement to and out of intermediary storage facilities.

Accepted Answer

A) Inbound logistics 
B) Recovery 
C) Outbound logistics 
D) Intraorganizational movement 
E) Recycling

Question 19

Virtually all of indirect spend is normally purchased through the organization's formal sourcing function or proven supply management processes and strategies.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not one of the advantages of motor carrier over other modes of transportation?

Accepted Answer

A) High flexibility. 
B) Good reliability. 
C) Good for JIT delivery. 
D) Good speed. 
E) Low cost.

Exam 17: Purchasing Services

The importance of effectively managing an organization's indirect spend is decreasing.

A preferred supplier list database should be set up to generate a list of preferred suppliers based on previous project performance criteria.

A performance-based logistics system seeks to drive the logistics service provider's performance by clearly delineating the buyer's preferred outcomes, not by transaction, but in terms of provider value-added and overall systems cost.

A/An _____ involves picking smaller amounts of materials from a series of close by suppliers to be used in a lean or just-in-time environment.

_____ refers to a mode's or carrier's ability to provide service over a geographic area.

_____ represents the link between a company and its customers.

Researching, defining, and writing clear and descriptive specifications is easy to accomplish.

All of the following are criteria used to measure transportation performance except _____.

Although mode selection is usually not an issue for international ocean shipments, as in all strategic supplier selection decisions, carrier selection within the preferred mode is still paramount.

Traditional cost accounting systems are designed to systematically track and consolidate indirect spend across an organization.

Inland water carriers are usually accessible for most shippers, as lakes, rivers, and canals are widely dispersed throughout the country.

A _____ is a key individual or unit that controls substantial indirect spending and that typically has a position of great authority within the organization.

_____ can be defined as the sum of all purchased goods and services that are not a direct, identifiable part of products or services delivered to the customer.

As organizations continue to focus more and more on their core competencies and outsource noncore activities, they come to recognize that many of their necessary transportation and logistics services can, and should, be outsourced to experts specializing in transportation and logistics services.

Every project must have a detailed scope that succinctly defines the project's parameters to help avoid misunderstandings between the buyer and the service provider.

The most significant advantage of a motor carrier is its relatively lower variable cost.

Which of the following is not a key part of a project's scope?

_____ includes movement of materials between production facilities within the same organization as well as movement to and out of intermediary storage facilities.

Virtually all of indirect spend is normally purchased through the organization's formal sourcing function or proven supply management processes and strategies.

Which of the following is not one of the advantages of motor carrier over other modes of transportation?