Question 1

Purchasing's right to evaluate and select suppliers means that sales representatives are not allowed to talk with non-purchasing personnel.

Accepted Answer

A) True 
 B)False

Question 2

A key characteristic of a/an _____ is a lack of processing by the supplier into a newly formed product.

Accepted Answer

A)  component 
B)  semifinished product 
C)  finished good 
D)  MRO item 
E)  raw material

Question 3

The purchasing cycle begins with the _____.

Accepted Answer

A)  selection of an appropriate supplier 
B)  issuance of a purchase order 
C)  receipt of a supplier's acknowledgement 
D)  identification of a need (a requirement) 
E)  determination of who can authorize the purchase

Question 4

Good reasons for allowing other departments to view purchase orders and incoming receipts does not include which of the following?

Accepted Answer

A)  The accounting department gains visibility to future accounts payable obligations. 
B)  The requestor can refer to the purchase order number when inquiring into the status of an order. 
C)  Receiving has a record of the order to match against the receipt of the material. 
D)  Traffic becomes aware of inbound delivery requirements and can make arrangements with carriers or use the company's own vehicles to schedule material delivery. 
E)  There is never a good reason for purchasing to allow other departments access to purchase orders and incoming receipts due to the confidential nature of the price and delivery terms.

Question 5

Responsibility for concealed damage is often simple and easy to detect.

Accepted Answer

A) True 
 B)False

Question 6

It is a common and preferred current practice for suppliers to arrange shipment to a purchaser and simply include the transportation cost as part of the purchase cost.

Accepted Answer

A) True 
 B)False

Question 7

Suppliers are more often being paid through _____, which is the automatic transfer of payment from the buyer's bank account to the supplier's bank account.

Accepted Answer

A)  RFQ 
B)  EFT 
C)  MRO 
D)  PO 
E)  None of the above.

Question 8

All of the following are objectives of a world-class purchasing organization except _____.

Accepted Answer

A)  ensure that all hard copies of purchase orders and other paper documents are filed correctly in a secure area 
B)  develop integrated supply strategies that support business goals and objectives 
C)  manage the sourcing process efficiently and effectively 
D)  supplier performance management 
E)  supply assurance

Question 9

In a _____, the supplier is reimbursed all of their actual costs plus some agreed on operational margin and overhead amount.

Accepted Answer

A)  RFP 
B)  cost-based contract 
C)  material purchase release 
D)  fixed-price contract 
E)  reverse auction

Question 10

Which of the following is not one of the objectives in supplier performance management?

Accepted Answer

A)  Selecting suppliers that are competitive. 
B)  Identifying new suppliers that have the potential for excellent performance and developing closer relationships with these suppliers. 
C)  Improving existing suppliers. 
D)  Developing new suppliers that are not competitive with current suppliers. 
E)  Ensuring timely and accurate payment of supplier invoices.

Question 11

_____ is the process of collecting historical data by commodity, relative to demand from the lines of business, with the exception of personnel expenses, occupancy, and corporate spend.

Accepted Answer

A)  Demand management 
B)  Supply analysis 
C)  Category management 
D)  Contract management 
E)  Spend analysis

Question 12

Capital equipment purchasing involves buying assets intended for use less than one year.

Accepted Answer

A) True 
 B)False

Question 13

For standard items, the negotiation process is an efficient method to purchase relatively straightforward requirements.

Accepted Answer

A) True 
 B)False

Question 14

Historically, most organizations have paid minimal attention to MRO items.

Accepted Answer

A) True 
 B)False

Question 15

The buyer should assume that the purchasing cycle ends with the receipt of an ordered item or the selection of a supplier.

Accepted Answer

A) True 
 B)False

Question 16

If the requested item is complex or requires an untested or new production process, purchasing can include additional information or attachments on its RFQ to assist the supplier, which might include detailed blueprints, samples, or technical drawings.

Accepted Answer

A) True 
 B)False

Question 17

_____ involves unbundling the price paid and understanding the total cost of ownership over the life cycle of a product or service to deliver a target cost and a unit rate to determine if it is priced competitively in the marketplace.

Accepted Answer

A)  Cost management 
B)  Procure-to-pay 
C)  Supplier relationship management 
D)  Category management 
E)  Spend management

Question 18

All of the following are conditions under which competitive bidding is effective except _____.

Accepted Answer

A)  the buyer has a preferred supplier for the item 
B)  volume is high enough to justify this method 
C)  the marketplace is competitive 
D)  the specifications or requirements are clear to the seller 
E)  adequate time is available for suppliers to evaluate the RFQs

Question 19

[A/An] _____ involves a communications standard that supports inter-organizational electronic exchange of common business documents and information.

Accepted Answer

A)  electronic catalog 
B)  cloud-based ordering system 
C)  Procure-to-pay 
D)  Electronic data interchange 
E)  blanket purchase order

Exam 2: The Purchasing Process

Purchasing's right to evaluate and select suppliers means that sales representatives are not allowed to talk with non-purchasing personnel.

A key characteristic of a/an _____ is a lack of processing by the supplier into a newly formed product.

The purchasing cycle begins with the _____.

Good reasons for allowing other departments to view purchase orders and incoming receipts does not include which of the following?

Responsibility for concealed damage is often simple and easy to detect.

It is a common and preferred current practice for suppliers to arrange shipment to a purchaser and simply include the transportation cost as part of the purchase cost.

Suppliers are more often being paid through _____, which is the automatic transfer of payment from the buyer's bank account to the supplier's bank account.

All of the following are objectives of a world-class purchasing organization except _____.

In a _____, the supplier is reimbursed all of their actual costs plus some agreed on operational margin and overhead amount.

Which of the following is not one of the objectives in supplier performance management?

_____ is the process of collecting historical data by commodity, relative to demand from the lines of business, with the exception of personnel expenses, occupancy, and corporate spend.

Capital equipment purchasing involves buying assets intended for use less than one year.

For standard items, the negotiation process is an efficient method to purchase relatively straightforward requirements.

Historically, most organizations have paid minimal attention to MRO items.

The buyer should assume that the purchasing cycle ends with the receipt of an ordered item or the selection of a supplier.

If the requested item is complex or requires an untested or new production process, purchasing can include additional information or attachments on its RFQ to assist the supplier, which might include detailed blueprints, samples, or technical drawings.

_____ involves unbundling the price paid and understanding the total cost of ownership over the life cycle of a product or service to deliver a target cost and a unit rate to determine if it is priced competitively in the marketplace.

All of the following are conditions under which competitive bidding is effective except _____.

[A/An] _____ involves a communications standard that supports inter-organizational electronic exchange of common business documents and information.