Supply Chain Logistics Management 4th Edition By Donald Bowersox – Test Bank
CHAPTER FOUR QUESTIONS – PROCUREMENT
4-1 A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the company has begun:
A. volume consolidation
B. supplier operational integration **
C. value management
D. analysis of total cost of ownership
4-2 Generally speaking, procurement can have a greater impact on the net income of a company than most other departments. This is due to the fact that:
A. manufacturing relies on purchasing to identify high-quality suppliers
B. suppliers want to reduce their prices to their customers
C Marketers don’t care about net income
D. purchased materials and supplies frequently represent the largest costs in a
company**
4-3 Which of the following reflects does not reflect a strategic focus on procurement?
A. focus on the total cost of ownership.
B. supply base reduction.
C. focuses on the purchase price.**
D. win-win negotiation.
4-4 Supply base reduction (volume consolidation)
A. has potential benefits for suppliers as well as for buyers.**
B. involves early supplier involvement in product design.
C. puts the buyer at a negotiating disadvantage.
D. has little potential for savings for buyers.
4-5 In procurement, the Total Cost of Ownership includes all of the following except:
A. field failures of purchased items
B. consideration of the impact of supplier quantity discounts
C. cost of order placement
D. In fact, the total cost of ownership includes all of the above. **
4-6 Early Supplier Involvement (ESI) is an important part of the “Volume Consolidation” stage of procurement strategy evolution.
A. True
B. False **
4-7 A Good purchasing strategy is based on a standardized set of procedures for dealing with every supplier in a firm’s supply base.
A. True
B. False **
4-8 A company has decided that it no longer needs to extensively count and inspect the products it buys from a particular supplier. This suggests that the buying company is in the volume consolidation stage of developing a procurement strategy.
A. True
B. False **
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