question

The _________ function is taking on increasing importance in today's industrial economy. financial purchasing marketing human resources operations

answer

purchasing

question

Since materials constitute the largest single percentage of their purchasing dollars, _____________ firms have turned to professionally operated purchasing departments to make sure they are getting full value for their outlays on materials. manufacturing results oriented profit oriented service retailing

answer

profit oriented

question

__________ is the life blood of most businesses. Most firms store thousands of different items. Inventory Human resources Capital Supplies Buying

answer

Inventory

question

The type of business a firm is in will usually determine how much of the firm's assets are invested in ___________. fixtures inventories machinery buildings locations

answer

inventories

question

Management of inventories is a major interest of purchasing managers. In many industries, the investment in inventories comprises a substantial share of the firm's assets. If the productivity of the inventory asset can be enhanced, the improvement will go directly to the bottom line. True False

answer

True

question

In order to manage the various types of inventory, attributes of the items first must be analyzed in terms of all the following with one exception. Which one is the exception? quality cost past usage the nature of demand lead time

answer

quality

question

Independent demand is related to the demand for other items. True False

answer

False

question

In the area of inventory management, the purchasing professional should make explicit decisions regarding which of the following? What to stock How much to invest How much service to offer All the above A and B only

answer

All the above

question

In the case of a manufacturing firm, you must consider whether the production process is ____________, ___________, or some hybrid of the two. Retail Telzon Pure Computerized Management

answer

Pure

question

The purchasing manager must have a clear understanding of the role of inventory in the ________ management system. production purchasing distribution materials supply

answer

materials

question

The inventory items that are the most important for a specific industry or firm should be items that account for the greatest ___________. number of sales dollar value mark-up total value profit margin

answer

dollar value

question

In the case of a manufacturing firm, you must consider whether the production process is ____________, ___________, or some hybrid of the two. custom made / made to stock matrix / made to request made to order / made to specs continuous / assembly line make to order / make to stock

answer

make to order / make to stock

question

If you analyze what sells the most and what costs the most, a predictable pattern will emerge with most distribution inventories. As a result of this general pattern, a small percentage of the total item usage accounts for a large proportion of total usage value. It is hypothesized that ____ percent of the total inventory cost is vested in approximately ____ percent of the items. 20 / 80 60 /40 50 / 50 70 / 30 80 / 20

answer

80 / 20

question

There are five primary functions of inventories. One of the following is incorrect. Which one? Safety stocks Cycle stocks Seasonal inventories Coupling Pipeline inventory

answer

Coupling

question

The objective of an inventory system is the minimization of total operating costs. The unavoidable costs of operating pure inventory systems are ___________. ordering costs, stockout costs, and backorder costs ordering costs, delivery costs, and holding costs ordering costs, stocking costs, and holding costs shipping costs, stockout costs, and pricing costs ordering costs, stockout costs, and holding costs

answer

ordering costs, stockout costs, and holding costs

question

The acronym EOQ is defined as _______________. economical order quantity equal order quantity economic order quantity equal opportunity quantity economic organizational quantity

answer

economic order quantity

question

The classical EOQ model is based, in part, on four of the following assumptions. One of the following in not one of the assumptions. Which one? Intermittent demand Constant lead time Fixed holding cost per unit Fixed order cost per order Constant unit price

answer

Intermittent demand

question

From time to time, buying firms receive discounted price schedules from their suppliers. This usually means that the price per unit is lower if larger orders are purchased. It _____________ to the buyer's advantage to accept the quantity discount. may be may not be is may or may not be could be

answer

may or may not be

question

The classical EOQ model assumes that the per-unit material price is fixed. The quantity discount condition _______________ the total cost curve. supports validates enhances lowers invalidates

answer

invalidates

question

A ________ method can easily be used for determining the minimum cost order quantity. simple four-step complex three-step five-step

answer

five-step

question

___________ is extra inventory held to protect against randomness in demand or lead time. Random stocks Warehouse stocks Lead time stocks Safety stock Backorders

answer

Safety stock

question

__________ is needed to cover the demand during the replenishment lead time in case actual demand is greater than expected demand. Safety stock Random stocks Safety orders Warehouse stocks Lead time stocks

answer

Safety stock

question

____________ (statistical inventory control) techniques are based on the assumption of uniform requirements per unit time. If this assumption of the demands is unrealistic, these techniques can lead to inappropriate inventory decisions. Order-point Reorder point Telzon Order control SICT

answer

Order-point

question

________ systems utilize substantially better information on future requirements than is possible by the traditional non-time-phased order-point system. PRM MPD IRA MRP QTR

answer

MRP

question

_______ systems are helpful for companies with assembled products that have component requirements dependent on the final product. PDQ MRP IRA ARA MRA

answer

MRP

question

The ______ concept provides the basis for projecting future inventories in a ____________ operation. MRP / manufacturing PDQ / manufacturing RAP / retailing AAP / auto service MAP / service

answer

MRP / manufacturing

question

_______ can help improve the traditional non-time-phased order-point system because it allows the _____________ to plan requirements (raw material, component parts) to meet the final assembly schedule. PDQ / buyer AAR / sales manager MRA / purchasing manager MRP / operating manager MAPS / production manager

answer

MRP / operating manager

question

The general __________ problem is to batch requirements to minimize the sum of ordering and carrying cost each time an order is to be placed. ordering buying cost analysis transportation lot-sizing

answer

lot-sizing

question

In situations where discounts are not available, the price per unit is constant regardless of the number of units ordered. True False

answer

True

question

Among the better-known lot-sizing methods for the single item, non-discount, time-phased, certain-demand models are: (1) lot for lot, (2) economic order quantity, (3) periodic order quantity, (4) least unit cost, (5) McLaren s order moment, (6) Silver-Meal, and (7) the Wagner-Whitin dynamic programming algorithm. True False

answer

True

question

The just-in-time (JIT) system is no longer a (n) _______________ in the manufacturing world today. In the face of intense global competition, many firms in the United States are looking at improved techniques to manage their manufacturing operations. manufacturing theory production concept management concept untried theory esoteric concept

answer

esoteric concept

question

JIT is also referred to as _______ production. mass quality lean custom short run

answer

lean

question

The following practices are considered essential for a comprehensive JIT implementation: Uniform production (also known as heijunka), Quick set times, Small lot sizes, Short lead times. True False

answer

True

question

The following practices are considered essential for a comprehensive JIT implementation: Regular maintenance, Diverse workforce, Supplier development, Kanban production control. True False

answer

True

question

JIT is Toyota's manufacturing philosophy to minimize _______, and the JIT production system is a subsystem controlled by ________. costs / computer waste / kanban expenses / kanban costs / kanban waste / computer

answer

waste / kanban

question

The ________ JIT production system has been erected based on the premise of minimizing _________________ (waste) by reducing or eliminating discrete batches. computer controlled/batches or lots computer controlled/inventories kanban-controlled/stock on hand kanban-controlled/work-in-process inventories computer controlled/stock on hand

answer

kanban-controlled/work-in-process inventories

question

Kanban is the Japanese word for _____________. card container computer program system

answer

card

question

The kanban card contains the part number, the part description, the type of container, and various workstation information. True False

answer

True

question

The kanban production control system uses simple, visual signals to control the movement of materials between work centers as well as the production of new materials to replenish those sent downstream to the next work center. True False

answer

True

question

There are two main types of kanban: __________ signals the need to produce more parts. Each kanban is physically attached to a container. __________ signals the need to withdraw parts from one work center and deliver them to the next work center. Reorder kanban / Production kanban Withdrawal kanban / Production kanban Quality circle kanban / Withdrawal kanban Production kanban / Withdrawal kanban Production kanban / Zero defects kanban

answer

Production kanban / Withdrawal kanban

question

In a ____________, removing an end item (or a fixed lot of end items) triggers the order release, by which the flow of materials or components is initiated. In contrast, ____________ allow for the production or material flow in anticipation of future demand. push system / pull systems pull system / push systems CIT system / CAM systems diverse system / traditional systems traditional system / push systems

answer

pull system / push systems

question

Thus, a kanban system is referred to as a __________ because the kanban is used to ______ parts to the next production stage only when they are needed. push system / push pull system / pull traditional system / ship traditional system / transfer pull system / push

answer

pull system / pull

question

Rule One (1) of the dual card kanban is: No parts are made unless there is a production kanban to authorize production. If no production kanban are in the in box at a work center, the process remains idle, and workers perform other assigned activities. This rule enforces the pull nature of the process control. True False

answer

True

question

The cost of raw materials has traditionally, been a serious concern of top management. Over the years, material cost as a proportion of total cost of the end product has risen sharply and is as high as ______ percent in some instances. 50 60 70 80 90

answer

80

question

The role of the purchasing function in a manufacturing organization has become increasingly important. The _____________ production control system focuses on reducing both raw materials and work-in-process inventories. JUST-ON-TARGET MBO just-in-time strategic just-in-line

answer

just-in-time

question

The ____________ is to provide a firm with component parts and raw materials. ____________ also must ensure that high-quality products are provided on time, at a reasonable price. manufacturing department / Manufacturing operations division / Operations function of purchasing / Purchasing procurement department / Operations buying function / Manufacturing

answer

function of purchasing / Purchasing

question

One of the most crucial elements of the ____________ system is small lot sizes. just-in-time management ordering and buying just-on-target purchasing computer ordering and buying

answer

just-in-time

question

Traditionally, long and infrequent production runs have in the past been considered beneficial for the overall productivity of a manufacturing organization. However, long production runs usually lead to ____________ of raw-material and finished-goods inventories. stable levels low levels steady flows intermittent flows high levels

answer

high levels

question

JIT purchasing facilitates reduction in _____________ and the associated _____________ costs. the cost of materials / storage the cost of shipping / holding the cost of inventory / storage inventory levels / materials inventory levels / inventory holding

answer

inventory levels / inventory holding

question

Lower levels of __________ contribute significantly to reduced working capital requirements for the firm. waste supplies materials safety stock inventory

answer

safety stock

question

As cooperation and relationships between suppliers and manufacturers build up in a JIT system, so do the opportunities to ______________________ and focus on ________________________. lower costs of materials and supplies / reducing waste and shrinkage conduct an extensive competitive analysis / reducing selling prices conduct an extensive value analysis / reducing the cost of parts purchased analyze competition / developing competitive strengths conduct cost analysis / reducing the costs of doing business

answer

conduct an extensive value analysis / reducing the cost of parts purchased

question

A comprehensive JIT progress report indicates that supplier costs were reduced by ________ when they adopted the JIT system in cooperation with their customers. significant amounts 11 percent twenty fold 100 percent 10 percent

answer

11 percent

question

Because of ____________ and frequent delivery schedules, suppliers are in a position to receive quick feedback regarding any potential manufacturing or design problems. Also, manufacturing is in a position to implement engineering changes quicker because of the _________ inventory levels. large orders / increased computerization / flat smaller orders / increased computerized ordering systems / reduced smaller lot sizes / reduced

answer

smaller lot sizes / reduced

question

The JIT progress report mentioned in the textbook indicates that supplier quality improved by ______ percent since the JIT system was adopted. 26 16 36 6 46

answer

26

question

It is well documented that JIT reduces physical inventory level. Reductions in physical inventory will also have a favorable impact on: Reduced insurance premiums associated with the storage of inventory, Reduced inventory holding costs, Reduced labor cost in store rooms and material handing costs, Reduced clerical and administrative costs, Reduced waste from the manufacturing process, Reduced obsolescence costs, Reduced deprecation of handling and storage equipment, Each of the cost savings will result in a leaner more profitable operation. True False

answer

True

question

Effective development and implementation of the just-in-time system requires integration of important functional areas such as ______________________. (Choose the best answer) purchasing manufacturing quality production and transportation all of the above

answer

all of the above

question

The _________ see little incentive in adopting the JIT approach when the primary benefits of the program go to the buyer. customers suppliers employees stockholders stakeholders

answer

suppliers

question

Many firms report lack of support from __________ as being one of the major problems encountered in the implementation of JIT (Lean) purchasing. stakeholders their employees their stockholders their bankers their lenders

answer

their employees

question

Very often, resistance is encountered because the employees are required to change their _____________, or because they interpret the new system as being _____________ jobs. long-standing work habits / a threat to their work stations / unnecessary to their job descriptions / an intrusion in their job standards / an evaluation of their personal work habits / a change in the expectations of their

answer

long-standing work habits / a threat to their

question

__________ percent of the firms surveyed using JIT practices in the United States indicated that they had serious problems regarding lack of support from engineering. Nineteen Twenty-nine Sixty-nine Forty-nine Thirty-nine

answer

Thirty-nine

question

If suppliers fail to provide materials of _____________ on a regular basis, production slow-downs and stoppages will occur regularly. adequate quantity acceptable quantity adequate quality high quality acceptable quality

answer

adequate quality

question

A crucial issue to be considered is the relevance of _________ in the successful implementation of the just-in-time system in a country. culture procedure communication style life styles policy

answer

culture

question

It takes time to ___________ of the workforce and _____________ relationships with suppliers. change habits / improve change attitudes / nurture long-term improve the attitudes / build change old habits / nurture long-term change attitudes / maintain short-term

answer

change attitudes / nurture long-term

question

All marketing strategies are compatible with the JIT system. True False

answer

False

question

The transition to ______ has not necessarily been a smooth one for many companies in the United States. But this does not imply that switching from a pure ____ system to a __________ system was a mistake for most companies. JOT / MRI / JOT or hybrid JIT / MBO / JIT or hybrid JIT / MRP / JIT or hybrid JOT / MRP / JOT or matrix JIT / MRI / JIT or hybrid

answer

JIT / MRP / JIT or hybrid

question

_________________ is a stockless inventory method for ordering and stocking MRO and related items. The use of ________________ will aid the firm in reducing ordering and inventory costs. Purchase Order Systems / Purchase Order Systems Systems contracting / systems contracting Systems procurement / systems procurement Contracting systems / contracting systems Materials contracting / materials contracting

answer

Systems contracting / systems contracting

question

The _____________ process requires the use of a negotiated agreement between buyers and sellers. contracting systems systems procurement Purchase Order Systems materials contracting systems contracting

answer

systems contracting

question

The negotiated agreement between buyers and sellers includes the following terms: the type of material, ________________, stocking policy, and delivery requirements. scope of contract price billing policy All of the above. B and C only

answer

All of the above.

question

Recognizing that purchase price is but one element of the total cost picture, the scope of ____________ goes far beyond the purchase price for any given item. systems contracting contracting systems Purchase Order Systems materials contracting

answer

systems contracting

question

To extend the commitment to increasing productivity in all departments within a given facility, many companies have adopted the concept of __________. cost centers profit centers profit groups cost groups cost divisions

answer

profit centers

question

__________ professionals are primarily charged with the responsibility for controlling the total cost of ownership (TCO). Accounting Purchasing Marketing Buying Operating

answer

Purchasing

question

Many of the e-procurement software vendors fail to take into account __________________________ and getting suppliers to participate in the e-procurement system. the total cost of implementing these systems the difficulty of realizing savings during the development and deployment phases of the transition the cost of training employees All of the above. A and C only

answer

All of the above.

question

__________ materials are directly related to the production of the finished goods. Finished Direct Raw Custom Indirect

answer

Direct

question

__________ materials are any commodity or service that is not directly involved in the production of finished goods. Raw Indirect Custom Direct Finished

answer

Indirect

question

E-purchasing has lead to significant cost saving and coordinated efficiency. True False

answer

True

question

It is a good idea to implement e-procurement on systems that have a high supply risk and low profit impact, especially if there are a very limited number of suppliers to choose from. True False

answer

False

question

Anything that will immediately impact profits or bottleneck your operations is not a good place to experiment with a new electronic procurement system. True False

answer

True

question

Indirect purchasing can be divided into two categories: organizational resources management and management of repairs and operations organizational resource management / maintenance resources and operations operating resource management and maintenance repair and operations operations repair management and management of resources and operations organizational repairs and maintenance / management of resources and organization

answer

operating resource management and maintenance repair and operations

question

______ purchasing is a term used for purchasing office equipment, furniture, office supplies, forms, computers, travel services, maintenance services, light bulbs, janitorial supplies, and many other relatively low-cost items. CCM DOP MRO MBO ORM

answer

ORM

question

_____ purchasing is concerned with critical maintenance and replacement parts, highly engineered machine parts, and manufacturing equipment.. MRO MBO ORM DOP CCM

answer

MRO

question

One problem with indirect purchasing is the tendency for employees to intermittently buy indirect items off contract. This practice is referred to as ________________. IOC purchasing local purchasing OC purchasing MP maverick purchasing

answer

maverick purchasing

question

The seven (7) steps to effectively implement e-procurement are: 1. Start with non-critical items. 2. Bring all internal stakeholders on board with your new procurement process to establish internal customer behavior. 3. Streamline, map, test, troubleshoot, and improve the process before expanding it to external suppliers. Work with a favored supplier to test the system. 4. Leverage your system once it s running. Exploit your full purchasing power by using reverse auctions. 5. Aggregate buyers within your organization to increase your purchasing power and gain better pricing. 6. Use an incremental approach to expand your system. 7. Once the bumps have been ironed out of the system, move on to the manufacturing operations. True False

answer

True

question

Businesses that use reverse auctions, or e-auctions, have given testimonials of savings of more than ____ percent. 80 70 50 90 60

answer

50

question

With __________, conditions are somewhat different. First, the buying firm initializes the auction by submitting a description of the product or service. Sellers then place bids based on their offer to fulfill the buyer's needs. traditional auctions eBay silent auctions Amazon.com reverse auctions

answer

reverse auctions

question

In a reverse auction the competition between the sellers drives the price _______, instead of _______, so the buyer pays _________ at the expense of the seller. down / up / less up / down / more down / down / less up / down / less up / up less

answer

down / up / less

question

__________ may not be the solution for all commodity buying. As an example, if there are too few sellers, ___________ will not yield the best price. Traditional auctions / reverse auctions Traditional auctions / traditional auctions Reverse auctions / traditional auctions Reverse auctions / reverse auctions

answer

Reverse auctions / reverse auctions

question

A more devastating downside of ______________ is the buyer/seller relationship damage that may result from this method of buying. The buyer runs the risk of alienating both current and potential sources for the goods/services. traditional auctions silent auctions eBay Overstock.com reverse auctions

answer

reverse auctions

question

To maintain trust and cooperation between buying and selling firms, reverse auctions should be used carefully. True False

answer

True

question

______ is the direct computer transmission of orders and other transaction information. FDIC EDS EDI ESC DEI

answer

EDI

question

The main elements of an EDI system are: computer hardware,software computer compatibility between the sender and receiver subscription to a common network All of the above. A and B only

answer

All of the above.

question

There are many benefits to using EDI. For a smaller company, EDI may help ________ keep a valued trading partner or customer gain new customers or trading partners all of the above none of the above

answer

all of the above

question

There are many benefits to using EDI. For larger firms, the main benefit(s) is (are) generally ________________ the cost savings to be known as a leading-edge company all the above none of the above

answer

all the above

question

There are some definite benefits to utilizing ______. The first major benefit is reduced labor. Higher information quality due to a reduction in data entry errors also can be attributed to ______ EDI / EDI CSI / CSI FDIC / FDIC RAF / RAF EID / EID

answer

EDI / EDI

question

According to the Lewin-Schein theory of change the change process consists of the following three steps: Unfreezing / Formulating / Refreezing Unfreezing / Moving / Training Unfreezing / Training / Moving Analyzing / Formulating / Freezing Unfreezing / Moving / Refreezing

answer

Unfreezing / Moving / Refreezing

question

The way in which the process of developing and implementing an EDI system is managed can greatly influence the success of implementation. Four key areas are: middle management support, commitment to the project, evaluation, and institutionalization. top management support, commitment to the project, influence, and institutionalization. middle management support, knowledge of the project, influence, and institutionalization. top manage support, knowledge of the project, evaluation, and institutionalization. top management support, knowledge of the project, commitment, and influence.

answer

top management support, commitment to the project, influence, and institutionalization.

question

Top management support has long been recognized as one of the _______ important ingredients necessary for the ___________ of any organizational change, and the same holds true for the ____________ of an EDI system. most / planning / designing least / implementing / designing most / scheduling / implementation most / introduction / introduction least / planning / designing

answer

most / introduction / introduction

question

As EDI really takes hold and international EDI becomes more commonplace a major stumbling block will be overcoming the language barriers that now exist. The most widespread EDI language in the United States is _________________ ANSA X12 standard EDIFACT standard EDIFACT X10 standard ODETTE ANSI X12 standard

answer

ANSI X12 standard

question

_____________________ is a universal term given to any technology that uses radio waves to identify and track items. Point of Sale, or POS Telzon Radio frequency identification, or RFID IBMR OASIS

answer

Radio frequency identification, or RFID

question

Unlike the barcode-based tracking system, a radio frequency identification system offers a __________________________________ . fully supported, efficient reading and tracking system. no-contact, no-line-of-sight reading and tracking system. contact, no-line-of-sight reading and ordering system. cost effective, line-of-sight reading and tracking system. point of sale reading and ordering system.

answer

no-contact, no-line-of-sight reading and tracking system.

question

RFID tags can be read through snow, fog, ice, paint, and crusted grime, unlike the barcode system. The tag also can be programmed to hold information such as the item s serial number, color, size, manufacture date, and current price, as well as a list of all distribution points the item reaches as it moves before arriving at a store. True False

answer

True

question

E-Procurement benefits by category are: Indirect, Direct, and __________ Decentralized Centralized Low cost Resourcing Sourcing

answer

Sourcing

question

Buyers and sellers located on different continents can meet electronically. E-sourcing will also lead to higher transactional accuracy and cost reductions for the entire supply chain. E-sourcing creates value by : 1. Reducing the total cost of ownership. 2. Streamlining the purchasing process and 3. Business innovation True False

answer

True

question

Traditional purchasing professionals who act as little more than order placers are giving way to __________ involved ___________ managers who control vital inputs to the production process. strategically / analytical highly/ operations highly / participative strategically/ general highly / general

answer

strategically / analytical

question

Buying firms select _____________ based on their capabilities, and not purely on the competitive process. employees materials the workforce managers and supervisors suppliers

answer

suppliers

question

The use of outsourcing has quickly become _____________ for an increasing number of businesses. necessary a competitive weapon an advantage a major strength a way of operating

answer

a competitive weapon

question

The following are key mistakes in the make-versus-buy decision: 1) In most cases, businesses are not proficient at identifying their core capabilities. Buyers usually rationalize in-house decisions based on capacity capabilities. 2) Buying organizations wait too late to assess the value of consultants or strategic partners. 3)Buyers do not recognize that the product or service is approaching maturity. 4) There are always new competitors with new technology attacking the market. True False

answer

True

question

_____________ gives a firm more control over the part in question. However, the greater the percentage of internal parts an assembly firm produces, the greater their need to have ___________ in each of the areas involved. Horizontal integration / competence Horizontal integration / diversity Vertical integration / diversity Vertical integration / good people Vertical integration / competence

answer

Vertical integration / competence

question

The buying firm must be highly skilled at ____________________________. specifying product attributes forecasting expected requirements ensuring the right quality at a reasonable price all the above A and C only

answer

all the above

question

Buyers should be experts ___________ and in specific _____________. on the industry / raw materials or component parts in the company / technologies in manufacturing processes / technologies on material and parts / manufacturing procedures in engineering / design techniques

answer

on the industry / raw materials or component parts

question

The _____________________ process is based on the idea of efficient resource coordination and teamwork. re-supply management supply chain management strategic chain management wholesale chain management supply chain assistance

answer

supply chain management

question

The counterproductive relationship is undesirable because: 1) it does not promote a positive rapport between buying and supplying firms involved and 2) neither organization achieves its goals. True False

answer

True

question

________________ relationships are those in which each organization (buying and supplying) is so focused on getting what is best for it that each puts the other at a disadvantage. Competitive Collaborative Counter-collaborative Counterproductive Cooperative

answer

Counterproductive

question

One model that explains supply chain relationship management includes which of the following behavioral dimensions? counterproductive (lose-lose) / competitive (win-lose) counter-cooperative (lose-win) / counter-collaborative (win-lose) collaborative (win-win) relationships / cooperative (win-win) All of the above. A and C only

answer

A and C only

question

A ______________ relationship is almost required with transactional/tier-_______ suppliers and assumes that the buying firm can lower prices to help keep its competitive edge in the market. collaborative / two competitive / three cooperative / three competitive / five counterproductive / four

answer

competitive / three

question

____________ relationships recognize the potential value of both organizations getting what they want and maximize the potential of having a long-term relationship. Counter-cooperative Counterproductive Competitive Cooperative Collaborative

answer

Cooperative

question

Although it is a strong relationship, a cooperative alliance lacks the ___________ that is needed between the various buying and supplying firms in order to optimize the benefits for all of the members of the supply chain. cooperation resources teamwork communication commitment

answer

teamwork

question

Collaboration or collaborative relationships, usually found with the buying firm s strategic/tier-______ suppliers, include the ___________ component that is missing in a cooperative relationship. three / team one / team two / communication one / communication five / team

answer

one / team

question

In collaboration, the two organizations truly realize the benefits of working together to optimize outcomes for both organizations. The two firms work together to develop a ___________ to deliver a high-quality product or service on time and under budget. process program strategy plan goal

answer

strategy

question

Once the system is developed, it then forces the various functions in the buying firm to evaluate which suppliers truly add value. The rankings are aggregated to enable a ranking of all suppliers. The company will then categorize the suppliers into one of three categories: standard, preferred, or cooperative. standard, competitive, or preferred. strategic, preferred, or. transactional. preferred, critical, or transactional. strategic, competitive edge, or standard.

answer

strategic, preferred, or. transactional.

question

___________ suppliers are those that are most important to the buying firm. They supply the buying firm with essential materials and capabilities that are not easily replaced. standard Preferred Strategic Competitive Collaborative

answer

Strategic

question

___________ suppliers are those that are important to the buying firm, but alternative suppliers could be found with some effort. Standard Strategic Cooperative Competitive Preferred

answer

Preferred

question

___________ suppliers are those that can be easily replaced in a short time. Standard Transactional Preferred Cooperative Common

answer

Transactional

question

There are two main categories of supplier evaluations, ___________________. specification-based evaluations and quality-based evaluations procedure-based evaluations and quality-based evaluations process-based evaluations and quality-based evaluations quality-based evaluations and performance-based evaluations process-based evaluations and performance-based evaluations

answer

process-based evaluations and performance-based evaluations

question

The _________ evaluation is an assessment of the supplier s production or service process. ______________ evaluations are based on objective measures of performance. process-based / Performance-based performance-based / Process-based procedure-based / Quality-based process-based / Quality-based quality-based / Performance-based

answer

process-based / Performance-based

question

In addition, large buying organizations increasingly are demanding that their suppliers become certified through third-party organizations, such as ____________ certification or _______________ National Quality Awards. ISO 0900 / Malcolm Jones UFO 1000 / Mayfield POS 2001 / Malcolm Baldrige ISO 9001 / Malcolm Baldrige ISO 9000 / Mae Baldrige

answer

ISO 9001 / Malcolm Baldrige

question

The three general types of supplier evaluation systems in use today are the _________________________. categorical method, the price-ratio method, and the circular averaging method categorical method, the cost-ratio method, and the linear averaging method circular method, the cost-ratio method, and the linear averaging method cost-ratio method, the gross margin method, and the linear averaging method categorical-ratio method, the quality-ratio method, and the linear averaging method

answer

categorical method, the cost-ratio method, and the linear averaging method

question

In general, the guiding factors in determining which system is best are ____________ and _______________ of the system. quality / cost quality / cost of implementation ease of implementation / cost of implementation reliability / cost ease of implementation / overall reliability

answer

ease of implementation / overall reliability

question

The __________ method involves categorizing each supplier s performance in specific areas defined by a list of relevant performance variables. performance-based process-based circular-ratio based categorical-ratio based categorical

answer

categorical

question

The advantages associated with implementing the ________________ evaluation program are that it can be implemented almost immediately and is the least expensive of the three evaluation systems discussed in the textbook. categorical process-based performance circular-ratio procedure-based

answer

categorical

question

The ____________ method s major disadvantage is its dependence on the judgment of its users. The system is largely dependent on the memories of personnel to explain what unsatisfactory or good means. With this method, there is no concrete supporting data. performance categorical process categorical-ratio circular-ratio

answer

categorical

question

The ___________ method evaluates supplier performance by using standard cost analysis. price-cost-ratio cost-ratio performance process categorical

answer

cost-ratio

question

The __________ method is probably the most commonly used evaluation method. linear averaging categorical process performance cost averaging

answer

linear averaging

question

Relationships with strategic suppliers need to be closely managed. One way to keep up on supplier relationships is for a __________ organization is to compile ___________ for each strategic __________. partner / buyer profiles / supplier buying / supplier profiles / supplier supplier / buyer profiles / partner buying / supplier profiles / partner manufacturing / supplier standards / partner

answer

buying / supplier profiles / supplier

question

In addition to the strategic _________ profiles, the buying firm should clearly establish expectations for the strategic _________ and discuss future product and _______ development plans; this is typically done with an annual review period. buyer / buyers / buyer s partner / partners / partner s buyer / suppliers / partner s supplier / suppliers / supplier supplier / buyers / partner s

answer

supplier / suppliers / supplier

question

_______________ and ______________ are necessary in order to keep costs down and create trust with strategic suppliers. Quality circles / just-in-time delivery Regular meetings / continuous two way communications Cost reduction / continuous process improvement Management by objectives / two way communication Staff awareness / regular quality meetings

answer

Cost reduction / continuous process improvement

question

___________________, one type of supplier development program (SDP), are an attempt to meet current and future business needs by improving supplier performance and capabilities. Supplier training Supplier evaluations Supplier workshops Supplier seminars Supplier discussions

answer

Supplier evaluations

question

Buying firm managers should focus their _____ implementation efforts on suppliers that exhibit commitment to the buying firm. Although the buying firm's perceptions of the supplier's commitment are inherently biased, it represents the best proxy for the supplier's commitment. MOD PODS SDP POS SOP

answer

SDP

question

Much debate has taken place concerning the number of suppliers a firm should use. One side of the debate is the _____________ side. This involves the use of two or more suppliers. The other side of the debate is the ____________ policy, in which only one supplier is used to supply a particular part. multiple-sources / single-source matrix-sources / hybrid-source metroplex / single-source tri-source / mono-source multi-source / mono-source

answer

multiple-sources / single-source

question

The main arguments for __________ sourcing are competition and assured supply. mono metro multiple matrix multi

answer

multiple

question

The major arguments in favor of _________ sourcing are that with the certainty of large volumes that the supplier can enjoy lower costs per unit and increased cooperation. solo mono single multi multiple

answer

single

question

A ________ approach can be used that is known as ____________. With this method, the supplier base is expanded without increasing the actual number of suppliers. multi / multiple-sourcing matrix / cross-sourcing hybrid / mono-sourcing solo / single-sourcing hybrid / cross-sourcing

answer

hybrid / cross-sourcing

question

The advantages of multiple sourcing can be viewed as the disadvantages of single sourcing and vice versa. True False

answer

True

question

Single sourcing advocates may want to address the following issues regarding long-term impacts of single sourcing. In the long-run, if everyone reduces their supplier base, there will be fewer suppliers to deal with and overall competition will decrease as there are fewer suppliers. A supplier consolidation will give suppliers less power in the long run. True False

answer

False

question

Grade methods are those that are based on a score or grade given to the supplier by the buyer for some attribute. The most common attributes are _____________________. cost, reliability, and delivery quantity, quality, and reliability quality, price, and delivery effectiveness, cost, and terms quality, price, and terms

answer

quality, price, and delivery

question

The second group of methods used to reduce the number of suppliers a firm uses is what the textbook refers to as the _________ methods. matrix hurdle saddle barrier effectiveness

answer

hurdle

question

Supplier ______________ are very useful tools to evaluate the quality capabilities of a supplier. review programs bargaining programs certification programs evaluations negotiations

answer

certification programs

question

The certification criteria can be changed and updated as recertification may be required. Thus, the hurdle can be lowered until there are a few suppliers left. True False

answer

False

question

Outsourcing can be defined as the ___________ transfer of a business process that has been traditionally ________________ internally to an independently owned external service provider. partial / owned and supported complete / operated and managed first / supervised business / owned and managed process / owned and supervised

answer

complete / operated and managed

question

A complete transfer means that the ______________________________ and other assets are no longer maintained internally once the business process is outsourced. people, plants, warehouses, headquarters, facilities, equipment, machinery, people, facilities, equipment, people, facilities, equipment, technology, people, facilities, technology,

answer

people, facilities, equipment, technology

question

Outsourcing is also sometimes thought to be similar to subcontracting, joint venturing, and contract manufacturing. Contracting is the purchasing of goods or services to facilitate a business process owned by the buyer. The outsourcing point of departure from these concepts is the ________________ of all associated internal business process activities. date of implementation agreement for the outsourcing need to reduce the costs desire to reduce the expenses complete transfer

answer

complete transfer

question

In a recent study, executives categorized their outsourcing activities. Table 9.1 in the textbook illustrates the diverse set of outsourced activities that were reported on. Not surprisingly, information technology outsourcing (ITO) represented the largest number of responses at 25.8 percent. Approximately 35 percent of the responses represented the outsourcing of some type of manufacturing activity, with the remainder being _________________. business practices administration (BPA) business process outsourcing (BPO) business accounting technology (BAT) business owners administration (BOA) business technology administration (BTA)

answer

business process outsourcing (BPO)

question

Outsourcing can be conceptualized as a _________ rather than simply an event. This __________ begins with the development of a strategic and financial business case for outsourcing. method / method strategy / strategy process / process practice / practice program / program

answer

process / process

question

The crafting of the business case is followed by implementing the ____________________ and, ultimately, managing the relationship with the provider. plan external sourcing model contract outsourcing model Internal sourcing model

answer

external sourcing model

question

Global business process outsourcing alone has surpassed the US$________ mark. A recent Booz Allen report posits the expectation that U.S. business process outsourcing will continue to grow at about _____ percent per year in the near term. 9 trillion/12 5 trillion/9 4 trillion/11 6 trillion/8 6 trillion/10

answer

6 trillion/10

question

According to a recent Deloitte Consulting study, 64 percent of respondents indicated that they had brought outsourced services back in-house. Fifty percent of respondents identified ______________ as the primary problem encountered with outsourcing, while 44 percent _________ realize cost savings. contractual expenses / did relationships / did not hidden costs / did not relationships / did hidden costs / did

answer

hidden costs / did not

question

Another study reported similar findings from a Bain survey of large and medium-sized firms. They found that only ____ percent of the firms were highly satisfied with the costs they were saving, and nearly _____ percent failed to achieve cost savings expectations 5/44 6/60 10/75 10/50 12/50

answer

10/50

question

a 2005 study reported that, based on the experience of the global consulting firm Booz Allen Hamilton, they would estimate that approximately one in three outsourcing efforts fails to achieve outsourcing expectations. These anecdotal findings suggest that there is a troubling gap between expectations and reality; however, outsourcing is ____________. here to stay being revised being cut back here for the next couple of years fading out

answer

here to stay

question

It is virtually impossible to generalize why organizations outsource various business processes. The final outsourcing decision depends on whether the CEO, CFO, or CIO initiates the outsourcing proposal. Whichever executive initiates the outsourcing proposal, a reduction in __________________ is usually the primary driver. hidden costs indirect costs labor costs direct operating costs hidden operating costs

answer

direct operating costs

question

The cost reduction must be significantly lower than the current direct operating costs in order for an outsourcing proposal to be attractive. The generic strategic benefits of outsourcing are listed below with one exception. Which one is not one of the strategic benefits? Refocusing the organization to its core competencies is accomplished by focusing what the organization does best and/or transforming the business to focus on new products and services. Increased market share and revenue is accomplished by assessing the providers network and accelerating expansion into new markets. Cost minimization is accomplished by reducing direct operating costs, eliminating overhead costs, and transforming fixed costs into variable costs. Improvement in the organization s core competencies by increasing productivity, reducing indirect operating expenses, lowering overhead, and expanding services. Improvement in operating performance is accomplished by increasing quality, increasing productivity, and obtaining new capabilities technologies from external sources.

answer

Improvement in the organization s core competencies by increasing productivity, reducing indirect operating expenses, lowering overhead, and expanding services.

question

Some of the specific benefits of outsourcing are to reduce and control operating costs. Improve quality. Change company focus. Acquire external capabilities. Refocus scarce resources for alternative uses. Reduce cycle time. Obtain cash infusion. Reduce risks. Gain flexibility. Turn fixed costs into variable costs. True False

answer

True

question

While a contract is required to legally protect one's interests, an extensive strategic assessment and a true commitment to a cooperative relationship with the service provider are both necessary to realize expected outsourcing benefits. These insights offer valuable guidance to __________________ in terms of where and how ______________ should be applied. business partners / outsourcing techniques outsourcing practitioners / outsourcing benefits business practitioners / sourcing techniques procurement departments / outsourcing benefits outsourcing practitioners / sourcing resources

answer

outsourcing practitioners / sourcing resources

question

Outsourcing initiatives must ___________. The type of management and relationship skills and capabilities must be developed through training and/or recruitment within the outsourcing organizations. create value create profits reduce costs improve quality create turnover

answer

create value

question

If sourcing internally, firms must estimate the costs of ________ prevention, the costs of _____________, the cost of ___________, and the cost of ____________. shrinkage / quantity appraisal / internal losses / external losses defect / quality appraisal / internal failure / external failure defect / quantity appraisal / internal problems / external problems turnover / quality appraisal / internal problems / external problems shrinkage / quality appraisal / internal losses / external failure

answer

defect / quality appraisal / internal failure / external failure

question

The buying firm will need to ensure that proper mechanisms are in place to make sure that they are capable of detecting _____________ by an external source. delivery failures quantity failures safety failures cost failures quality failures

answer

quality failures

question

It has long been recognized in both the strategy and operations literature that the most effective external sourcing relationships involve considerable _______________ and ____________. resources / time commitment / communication management time / coordination management effort / two-way communications management effort / relationship building

answer

management time / coordination

question

While internal coordination costs are unique to external sourcing alternatives, they must be contrasted against the _______________ and ____________ associated with internally sourcing a product or service. management time / turnover costs internal coordination / overhead costs external coordination / implementing costs external coordination / expected benefits external coordination / overhead costs

answer

internal coordination / overhead costs

question

In general, one can think of __________ coordination costs as those overhead expenses incurred solely due to the decision to _________ source a product or service. internal / externally external / internally external / externally management / internally internal / internally

answer

internal / internally

question

Presumably, _______________ induces higher levels of many overhead administrative functions such as payroll, benefits management, utility expenses, IT expenses, and so forth. sourcing internally outsourcing sourcing externally sourcing alternative sourcing

answer

sourcing internally

question

The relationship between higher levels of vertical integration and an increase in bureaucratic costs has been noted in the extant academic literature. Some firms have cast the decision to _____________ versus the decision to externally source as a comparison between the costs of bureaucracy and the cost of _____________. vertically integrate / external coordination horizontally integrate / internal coordination merge / management coordination expand horizontally / supervision vertically integrate / internal coordination

answer

vertically integrate / external coordination

question

During the transition period, firms incur additional costs related to internal staff providing _______________. There is usually lower efficiency and effectiveness at the beginning of the contract. additional resources advice and assistance additional support and duplicate resources duplicate services training and advice

answer

additional support and duplicate resources

question

Dunn and Bradstreet found that 20 to 25 percent of all outsourcing relationships fail within __________ and nearly half fail within ____ years. This implies that the likelihood of incurring these expenses again, or experiencing costs associated with re-internalizing an outsourced activity, is ___________. Another critical financial consideration with outsourcing is the impact on the ___________. two months / ten / relatively high / environment two years / eight / good / internal workforce two years / five / relatively high / internal workforce two years / five / somewhat low / environment two months / five / relatively high / internal workforce

answer

two years / five / relatively high / internal workforce

question

Some of the often hidden costs of outsourcing include training internal employees to become relationship managers rather than technical managers. The hidden costs also include ______________________________________ required to thwart labor disputes. golden parachutes, severance packages, temporary employees, and supervision retention bonuses, severance packages, employee turnover, and management time retention bonuses, employee training, redundant activities, and management time management time, severance packages, employee training, and golden parachutes performance bonuses, temporary employees, employee turnover, and employee training

answer

retention bonuses, severance packages, employee turnover, and management time

question

One of the most influential factors in _______________ decisions is the coordination requirements. Perhaps nowhere is this more evident than when considering new product or service development. horizontal integration strategic alliance merger vertical integration acquisition

answer

vertical integration

question

If considering international sourcing alternatives, it is important that the decision makers develop a complete understanding of the costs involved with _____________________ ____________________________________________________________. moving key personnel to the company of choice, setting up communication links, and building the appropriate facilities ensuring compliance with governmental laws, regulations, and even local business customs setting up environmental friendly operations, complying with the local customs, adapting to local regulations, and adjusting to the local culture. learning local customs, adapting to the culture, meeting local regulations, and adjusting to the language adjusting to local laws, complying with the local customs, and adapting to the culture

answer

ensuring compliance with governmental laws, regulations, and even local business customs

question

Tariff rates in ______________ countries are typically less than 10 percent but can be much higher for _________________ nations and for certain products such as agriculture. These environmental parameters may be highly dynamic, requiring analysts to be on the ground and well connected to develop a deep understanding of the _______________. developed / lesser-developed / evolving environment lesser developed / developed / evolving environment developed / lesser developed / evolving business climate lesser developed / evolving / local customs developed / lesser developed / target country

answer

developed / lesser-developed / evolving environment

question

A report by Cranfield University to the Department for Transport in England recognized outsourcing as one of the key factors driving increased levels of ____________. The idea of ______________ should underlie all of the previously discussed cost categories. insurance / insurance management losses / loss prevention shrinkage / shrinkage prevention supply chain losses / preventing losses supply chain risk / risk management

answer

supply chain risk / risk management

question

Broadly, risk can be defined as a measure of the probability and severity of adverse effects. One can divide risk management into four iterative phases. Which of the following is not one of the iterative phases? contingency planning Risk mitigation Loss prevention Risk monitoring Risk assessment

answer

Loss prevention

question

________________ involves answering three questions: (1) What adverse events could happen? (2) What is the probability of these events happening? and (3) What is the financial impact if these events occur? contingency planning Risk mitigation Loss prevention Risk monitoring Risk assessment

answer

Risk assessment

question

_____________ involves a detailed analysis of what can be done to reduce or eliminate the probability and severity of adverse events while also considering the trade-offs involved. Contingency planning Risk mitigation Loss prevention Risk monitoring Risk assessment

answer

Risk mitigation

question

______________ involves continuously evaluating supply chain conditions so that potential issues may be avoided or at least lessened by being more proactive. Contingency planning Risk mitigation Loss prevention Risk monitoring Risk assessment

answer

Risk monitoring

question

A commonly cited source of financial benefit from outsourcing is the vendor's better ______________. quality cost structure expertise and knowledge economies of scale quality and technology

answer

economies of scale

question

The __________________ is especially concerned with how to coordinate diverse production skills and integrate multiple streams of technology. lean production system PDF concept strength and weakness system RAP concept core competency concept

answer

core competency concept

question

The organization must have a set of ______________ that ensure survival in a competitive marketplace. values beliefs strategic plans contingency plans core capabilities

answer

core capabilities

question

The concept of _______________ along with the resource-based view of the organization provides the basis for the assertion that in considering outsourcing, the decision making team must have a thorough understanding of _______________ capabilities and how they relate to an organization s competitive advantage. PDF systems / PDF and non-PDF RFD Systems / RFD and non-RFD core competencies / core and non-core advanced technologies / advanced and non-advanced technology core technologies / core and non-core technology

answer

core competencies / core and non-core

question

Only organizations that are diligent about understanding and avoiding the pitfalls of _______________ outsourcing and that apply total business-outcome-focused outsourcing will be successful. international external cost focused quality focused price reductions

answer

cost focused

question

Initially, outsourcing decisions predominantly involved ___________, _______________, and activities of ____________ strategic value. non-standard products / common processes / high standardized processes / traditional products / relatively high standardized processes / commoditized products / extremely low standardized processes / commoditized products / extremely high non-standardized processes / technology related products / extremely low

answer

standardized processes / commoditized products / extremely low

question

Firms are increasingly considering more strategic capabilities for outsourcing, making the strategic evaluation much more complex. Firms are discouraged from making outsourcing decisions piecemeal, but rather encourage organizations to make them as part of a __________________. contingency plan strategic business plan outsourcing plan comprehensive production strategy comprehensive sourcing strategy

answer

comprehensive sourcing strategy

question

The _____ step in the make-or-buy decision is to understand the strategic importance (value) of the activity or system. second fourth first fifth third

answer

first

question

Potential outsourcing suppliers must be _____________ and ___________. recruited / interviewed identified / investigated interviewed / selected selected / qualified qualified / available

answer

identified / investigated

question

In addition to the supplier profiles, the buying organization should clearly establish expectations for the potential suppliers and discuss the __________ and the _________________ for the outsourcing activity. standards / employee training costs / delivery scope of work / appropriate pricing quality / quantity type of work / quality

answer

scope of work / appropriate pricing

question

The buying and selling organizations must follow the specific roles outlined in the contract. The buying organization also must appoint a __________ manager. The __________ manager and the suppliers must merge their independent plans into one consensus plan. coordinating / coordinating relationship / relationship contract / contract purchasing / purchasing supply / supply

answer

relationship / relationship

question

It is important to make sure that all ______________ feel as though their interests were represented and considered in making the decision. employees stockholders managers stakeholders union members

answer

stakeholders

question

It is crucial to treat _____________ both survivors of and those directly impacted by outsourcing with respect and dignity during the decision-making and implementation process. stakeholders employees managers managers and employees stockholders and stakeholders

answer

employees

question

Failing to appreciate the ___________ concerns and proactively manage them will have an adverse impact on the outsourcing engagement. managers' stockholders' stakeholders' employees' bankers'

answer

employees

question

In order to effectively cultivate the outsourcing relationship, the buying organization should be active in _______________ performance and ____________________. managing / identifying problems monitoring and evaluating / solving problems monitoring / ensuring quality evaluating / discussing problems managing quality / identifying problems

answer

monitoring and evaluating / solving problems

question

The ____________ establish (es) the performance measures, deliverables, due dates, and the expected supplier requirements. Performance measurement is the cornerstone of the buyer supplier relationship. Without measurement there is no control. Without control there can be no relationship to manage. negotiating team original contract buying organization supplier buyer and supplier jointly

answer

original contract

question

Outsourcing risks include breaches in intellectual property, provider shirking, and opportunistic renegotiation. The combination of contractual incompleteness, asset specificity, and uncertainty gives rise to these risks when firms pursue external sourcing. Outsourcing organizations must have a clear _____________________. legally binding contract understanding of the contract understanding of true supplier intentions definition of supplier roles and responsibilities understanding of the supplier s role and responsibilities

answer

understanding of true supplier intentions

question

____________ is the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit. Political capital Operating capital Total assets Social Capital Cash flows

answer

Social Capital

question

For long-term relationships to work, it initially requires _________________ from both parties. Although these longer term relationships can bear significant benefits for the customer and service provider, the road will not always be a smooth one. a strong commitment a strong communications system a good understanding of each other a meeting of the minds a pledge to work together

answer

a strong commitment

question

Equitable distribution of pain and gain will ultimately lead to __________ partnership performance. Along with having a contract that defines performance incentives by means of penalty and reward structures, the relationship also must be able to work through unforeseen conditions in a productive manner. reduced enhanced lower less equal

answer

enhanced

question

A final key element of an effective buyer supplier relationship is ____________________. the performance evaluation the monitoring of performance the control element the reward element the incentive to perform well.

answer

the performance evaluation

question

It appears clear that effective buyer supplier relationships should include a formalized procedure for ______________ the buyer's expectations and _____________ the supplier's performance. communicating / evaluating setting / monitoring establishing / evaluating communicating / changing establishing / changing

answer

communicating / evaluating

question

The focus has been on a single aspect of outsourcing: the __________ of jobs, and, in particular, the outsourcing of ___________ jobs. reduction / blue-collar reduction / manufacturing migration / white-collar migration / service sector migration / service sector

answer

migration / white-collar

question

A few countries, notably ______________, are often targeted as the ones that are displacing American workers by offering cheap labor. Japan and China South Korea and China South Korea and Taiwan India and Japan India and China

answer

India and China

question

The intense attention on the outflow of work to overseas locations has generated ________ about which jobs or professions will be outsourced next. fear concern stress interest joy

answer

fear

question

The costs of global sourcing include some of the same costs found in domestic sourcing; there are also costs that are different. These costs are grouped into the following categories: _________________. administrative foreign common all of the above

answer

all of the above

question

Exclusively foreign costs are those that would not be incurred if a domestic source were found. Examples of these costs are _________________. duty charges custom fees import fees currency exchange costs all of the above

answer

all of the above

question

Many of the exclusively foreign costs are established by ___________ and are very difficult to avoid. agreements suppliers governments negotiations international companies

answer

governments

question

Direct labor and materials costs, lead-time costs, transportation costs, and inventory costs are a part of both domestic and offshore sourcing. _________________ tend to be higher when sourcing globally. Transportation costs, inventory costs, and lead-time costs Transportation costs, materials costs, and lead-time costs Materials costs, transportation costs, and inventory costs Transportation costs and inventory costs (only) Transportation costs and lead-time costs (only)

answer

Transportation costs, inventory costs, and lead-time costs

question

One of the most important variables to consider is the exchange rate of currencies. Since predicting the fluctuation in currency markets is relatively easy, foreign purchases may actually cost less than negotiated depending on the length of the contract. True False

answer

False

question

Depending on the performance and strength of the dollar, goods can cost American firms different amounts from what s expected. True False

answer

True

question

When the dollar has a weak performance over the life of a contract, a firm can realize savings through the exchange rates True False

answer

False

question

There are many ethical considerations that (companies) must learn in order to be successful. This is one reason that many companies hire _________ to do their sourcing. agents importers nationals brokers wholesalers

answer

brokers

question

Lead times and delivery times can create problems also. Longer times can _______________________. The extended lead time also might push back the date at which a firm is able to introduce new products to the market. increase inventory and drive down carrying costs increase inventory needs and drive up carrying costs reduce inventory needs and drive up ordering costs increase inventory needs and drive up ordering costs expand inventory and drive up production costs

answer

increase inventory needs and drive up carrying costs

question

A third problem companies face in global sourcing is ___________. Many times there are delays and confusion in translations. negotiating bargaining communication contracting understanding one another

answer

communication

question

The associated qualitative risk profiles of _____________________ in some foreign countries must be evaluated. the impact of national interest the ethical consequences of sweat shop labor hazardous working conditions all of the above B and C only

answer

all of the above

question

The general uncertainty associated with the ______________ makes offshore sourcing a risky proposition. government regulations business cycle exchange rate tariffs taxes

answer

business cycle

question

The buying professional who is considering offshore sourcing must be prepared to fully analyze both the _______________ factors. financial and competitive competitive and cost quantitative and capacity capacity and quality qualitative and quantitative

answer

qualitative and quantitative

question

The distance between the buying and selling firm is significant in terms of time zones and physical location. Internet capabilities usually provide a partial solution. True False

answer

True

question

Communication can be described as the _______ that holds together a sourcing relationship. substance lubricant glue process procedure

answer

glue

question

Most of the global risk issues are ____________________________. distance and communication time value of money and quality issues pipeline problems and staffing issues competition all of the above

answer

all of the above

question

Since most offshore deals require the use of a ___________ the buying firm loses the use of funds when the ________ is established secured credit account / account letter of credit / letter wire transfer / transfer letter of recommendation / letter credit card / card

answer

letter of credit / letter

question

The buying firm must spend the necessary time to correctly specify and articulate quality expectations. Then evaluation makes sure that the sample is from a legitimate production run. Prototypes/lab samples should not be analyzed. True False

answer

True

question

___________ inventory issues will always occur when a third party (the shipper) is involved. The problems become pronounced when offshore sourcing is used. Pipeline Back up Reserve Safety stock Suppl

answer

Pipeline

question

If a buying firm is to be effective with an offshore sourcing strategy, it must either hire experts or develop specialists that are assigned to offshore suppliers. Ideally, these individuals must have experience in purchasing management, quality control, and basic accounting. This cost also must be considered in the evaluation process. True False

answer

True

question

The direct and indirect costs (discussed in the textbook) tend to add unexpected costs to purchased items. However, the significant benefits associated with offshore sourcing enable the buying firm to ______________ domestic suppliers gain leverage over compete effectively with reduce costs as compared to negotiate more effectively with reduce the number of

answer

gain leverage over

question

According to the ________________________, export controls and restrictions may be imposed for a range of specific purposes including national security; protection of life, health, and the environment; and the preservation of national treasures. 2001 Fair Trade Act of the European Union Trade Protection Act of the European Communities 1992 Import and Export Protection Act 1991 Trade Policy Review of the European Communities 1998 Fair Trade and Tariffs Act of the EU

answer

1991 Trade Policy Review of the European Communities

question

When it comes to negotiations Americans can assume that the English and American businesses operate in the same manner True False

answer

False

question

Due to technical expertise, German negotiators are extremely cautious. The opponent should be well prepared on technical details. True False

answer

True

question

When doing business in France, (a buyer) will often go through a (n) _________ whose credentials are impeccable. (The) choice of __________ is important. banker / a banker exporter / an exporter chief export director / a CED intermediary contact / an intermediary secretary of exports / secretary

answer

intermediary contact / an intermediary

question

China is now a _______ player in the world economy and accounts for more than 6 percent of world trade. This is remarkable for a developing economy. There has been strong import growth, both for processing trade and for domestic consumption relatively new minor major major-minor first class

answer

major

question

The major problems when doing business in China are the language barrier, business practices, and a fluid and diverse legal system. A well-specified _______________ is a basic requirement when buying from China. procurement strategy game plan policy and specification statement competitive strategy operational plan

answer

procurement strategy

question

Any business or individual wanting to import goods into the United States will have to work with the Export Administration (EA) of the U.S. Department of Commerce. Several steps that (a company needs) to be aware of are the following: 1. Determine whether the item (s) in question is subject to the exclusive jurisdiction of a State agency. 2. Determine if the technology or software is privately available. 3. For an item in a foreign country, the cost of the item must be determined. 4. For items made in a foreign country, determine whether it is a decontrolled item in the US. 5. Determine whether the foreign made item is subject to selective prohibition. True False

answer

False

question

The FTC Act of 1934 created ___________ to encourage exports from foreign countries. The act allowed for the storage of goods within the U.S. boundaries without payment until the goods passed to the buying company. Bill Stowe's Hair tax-free zones transit zones trade zones free tariff zones

answer

trade zones

question

___________ is the exchange of goods for goods in full or partial payment of a sales transaction. Progressive companies must participate in ____________ or risk losing market share. Exporting / exporting Exchange trading / exchange trading Market trading / market trading Import trading / importing Counter trade / counter trade

answer

Counter trade / counter trade

question

Some of the more popular forms of counter trade are as follows with one exception. Which one is the exception? Offsets Indirect offsets Coproduction Production transfer Licensed production

answer

Production transfer

question

_________ are commercial compensation practices required as a condition of purchase of goods and services. Offsets Indirect offsets Coproduction Sub-contractor production Licensed production

answer

Offsets

question

_______________ occur where products or services transferred in an offset arrangement are unrelated to the specific products referred to in the export agreement. Offsets Indirect offsets Coproduction Sub-contractor production Licensed production

answer

Indirect offsets

question

____________ is a form of agreement that involves the purchaser being given a share in the manufacture of a foreign designed product. Offsets Indirect offsets Licensed production Sub-contractor production Coproduction

answer

Coproduction

question

___________________ is when the recipient obtains a share of the production work for its own order. Offsets Indirect offsets Coproduction Sub-contractor production Licensed production

answer

Licensed production

question

_____________ is when a prime contractor substitutes an existing supplier with one located in the buying country. Offsets Sub-contractor production Indirect offsets Coproduction Licensed production

answer

Sub-contractor production

question

________________________ occur as a result of an offset are research and development agreements conducted in the buying country. Offsets Indirect offsets Technology transfers Coproduction Licensed production

answer

Technology transfers

question

_________ is the non monetary exchange of goods-for-goods. Barter Offsets Indirect offsets Coproduction Licensed production

answer

Barter

question

__________ is when the seller exchanges products for compensatory amounts of commodities. Offsets Indirect offsets Coproduction Counter-purchase Licensed production

answer

Counter-purchase

question

____________ is a form of agreement that involves the purchaser being given a share in the manufacture of a foreign designed product. Offsets Indirect offsets Licensed production Sub-contractor production Coproduction

answer

Coproduction

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