Chapter 7 OPS – Flashcards

1) Firms do not compete only against global competitors, but against:

2) The percentage of value of shipments that come from materials for the average manufacturer is:

3) The analyst turned on his banker's lamp, adjusted his eye shade, and slowly pulled a legal pad from his desk. His weathered hands punched the buttons on his desk calculator deliberately as he divided earnings by total assets in order to calculate:

4) The phenomenon that a dollar in cost savings increases pretax profits by a dollar, while a dollar increase in sales increases pretax profits only by the dollar multiplied by the pretax profit margin is known as the:

5) Which of the following is required in order to execute a successful spend analysis?

6) The use of supply chain partners to provide products or services is called:

7) One advantage of outsourcing is that it:

8) Which of these is a direct cost associated with outsourcing?

9) Which of these is an indirect cost associated with insourcing?

10) A supplier that has previously demonstrated its performance capabilities through purchase contracts may well receive:

11) A company using portfolio analysis correctly decides to streamline the purchasing process for a few items by use of EDI and automated requisitions to the greatest extent possible. The quadrant that these items fall in is most probably the:

12) The purchasing team examined all of their purchasing patterns in order to identify any irregularities or possible areas of cost savings in a little scheme they liked to call:

13) The ratio of earnings to sales for a given time period is the:

14) Competitive bidding, active sourcing, and using industry standards are all actions that are appropriate if the sourcing strategy is to:

15) When compared with single sourcing, multiple sourcing has the advantage of:

16) Single sourcing is a better choice than multiple sourcing from the perspective of:

17) A sourcing strategy in which two suppliers are used for the same purchased product or service is:

18) This table contains the performance criteria and scores for four potential suppliers to Kramerica Industries. Evaluate the data and identify the BEST source for Kramerica.

19) A description method used when a product or service is proprietary or when there is a perceived advantage to using a particular supplier's product or services is:

20) The two basic types of purchasing contracts are:

21) Terms and conditions for a purchased service that indicate what services will be performed and how the service provider will be evaluated are called a:

22) A recent survey of executives at Global 1000 companies uncovered what fear?

23) Which of these factors is most likely to increase the risk of a missed shipment, communication problem, or human error?

24) What is Flingers' return on assets?

25) For the average manufacturer, over 50 percent of the value of shipments comes from materials.

26) Company A spends $250 million purchasing materials and subassemblies that it processes and sells for a total of $350 million. The cost of goods sold by Company A is $350 million.

27) The ratio of earnings to sales for a given time period is a firm's profit margin.

28) The first step of the purchasing process is to select the supplier.

29) Maverick spending is often promoted by top management as a way to improve the bottom line and break out of a purchasing cycle.

30) Outsourcing can be risky because it decreases the firm's strategic flexibility.

31) Total cost analysis divides costs into direct (costs that are tied to the level of operations or supply chain activities) and indirect (costs that are not tied to the level of operations or supply chain activity).

32) Portfolio analysis begins with assignment to a quadrant before a sourcing strategy is formulated.

33) A company that uses portfolio analysis would probably classify things like office supplies in the Bottleneck quadrant.

34) A manufacturer seeking to reduce the variability of quality should use multiple sourcing.

35) A manufacturer that wants to make sure that suppliers do not become complacent should use multiple sourcing.

36) Cross sourcing is a strategy in which two suppliers are used for the same purchased product or service.

37) The weighted-point evaluation system allows for a completely objective decision to be made.

38) The request for quotation is a formal request for suppliers to deliver a product or service that includes key terms and conditions, such as price, delivery, and quality requirements.

39) In the description activity of the purchasing process, the product should be described only by brand or specification.

40) When a preferred supplier does not exist, competitive bidding and negotiation are two methods commonly used for final supplier selection.

41) In a cost-based contract, the stated price does not change, regardless of fluctuations in the general overall economic conditions.

42) Use of EDI in the supply chain has led to shorter lead times and lower inventory.

43) Money is automatically drawn from the buyer's account and deposited into the supplier's account in an electronic funds transfer (EFT).

44) A recent trend in supply management is a move towards a more sustainable supply chain.