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Test Bank for Purchasing and Supply Chain Management 6th Edition by MonczkaFull Download: monczka/Chapter 2 -- The Purchasing ProcessTrue / False1. Enterprises are relying increasingly on external suppliers to provide only materials and products, not informationtechnology, services, and design activities.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:12. The objectives of a world-class purchasing organization do not need to evolve beyond the traditional mantra of ensuringwe “get a good price!”a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:13. Organizations are constantly looking for people who have developed the skills necessary to deal with the narrow varietyof tasks faced by purchasing.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:14. If a supplier’s components are defective and causing problems for manufacturing, then purchasing must find ways toimprove supplier quality.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:15. Purchasing can directly affect (positively or negatively) the long-term growth, revenue, and operating outcomes andplans of stakeholders and business units.a. Trueb. FalseCengage Learning Testing, Powered by CogneroFull all chapters instant download please go to Solutions Manual, Test Bank site: downloadlink.orgPage 1

Chapter 2 -- The Purchasing EasyBloom’s: UnderstandingAnalytic16. The authority to review and challenge specifications (for products or for services) is within purchasing’s span of controlin managing demand, although internal stakeholders sometimes dispute this right.a. Trueb. FalseANSWER:TrueDIFFICULTY: ModerateKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:27. Purchasing’s right to evaluate and select suppliers means that sales representatives are not allowed to talk with nonpurchasing personnel.a. Trueb. FalseANSWER:FalseDIFFICULTY: ModerateKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:28. Contract management should be used to trigger proactive sourcing events only after a contract expires.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:29. When creating a forecast for a needed product or service, internal customers may not always be able to express exactlywhat it is they will need at a future point in time.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:2Cengage Learning Testing, Powered by CogneroPage 2

Chapter 2 -- The Purchasing Process10. For routine, off-the-shelf items, the purchase requisition may contain all the information that purchasing requires.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:211. When purchasing works directly with internal stakeholders to anticipate future requirements, such as during newproduct development, or with physician councils in a health care provider, purchasing is acting reactively.a. Trueb. FalseANSWER:FalseDIFFICULTY: ModerateKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:212. The process that buyers use to select suppliers does not vary widely depending on the required item and therelationship that a buyer has with its suppliers.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:313. Buyers use competitive bidding when price is a minor criteria and the required item (or service) has complex materialspecifications.a. Trueb. FalseANSWER:FalseDIFFICULTY: ModerateKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:314. For standard items, the negotiation process is an efficient method to purchase relatively straightforward requirements.a. Trueb. FalseANSWER:FalseDIFFICULTY: ModerateKEYWORDS: Bloom’s: RememberingCengage Learning Testing, Powered by CogneroPage 3

Chapter 2 -- The Purchasing ProcessOTHER:NOTES:Analytic315. If the requested item is complex or requires an untested or new production process, purchasing can include additionalinformation or attachments on its RFQ to assist the supplier, which might include detailed blueprints, samples, ortechnical drawings.a. Trueb. FalseANSWER:TrueDIFFICULTY: ModerateKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:316. In drafting a purchase order, purchasing must include a large number of details regarding policies because it is alegally binding document.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:317. Almost all firms establish blanket purchase orders with their suppliers.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:318. Buyers use material purchase releases to order items covered by blanket purchase orders.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:319. Responsibility for concealed damage is often simple and easy to detect.a. Trueb. FalseCengage Learning Testing, Powered by CogneroPage 4

Chapter 2 -- The Purchasing eEasyBloom’s: UnderstandingAnalytic320. Material discrepancies usually result from incorrect quantity shipments.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:321. The buyer should assume that the purchasing cycle ends with the receipt of an ordered item or the selection of asupplier.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:322. Managing the purchase of semifinished components is not a critical purchasing responsibility because componentsrarely affect product quality and cost.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:423. Historically, most organizations have paid minimal attention to MRO items.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:424. The way MRO items are typically dispersed throughout an organization makes monitoring MRO inventory relativelyCengage Learning Testing, Powered by CogneroPage 5

Chapter 2 -- The Purchasing Processsimple.a. Trueb. asyBloom’s: UnderstandingAnalytic425. Capital equipment purchasing involves buying assets intended for use less than one year.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:426. It is a common and preferred current practice for suppliers to arrange shipment to a purchaser and simply include thetransportation cost as part of the purchase cost.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:427. Most companies spend too much time and too many resources managing the ordering of goods and services,particularly lower-value items.a. Trueb. FalseANSWER:TrueDIFFICULTY: EasyKEYWORDS: Bloom’s: UnderstandingOTHER:AnalyticNOTES:528. The dollar value of the items covered by procurement cards is relatively high.a. Trueb. FalseANSWER:FalseDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticCengage Learning Testing, Powered by CogneroPage 6

Chapter 2 -- The Purchasing ProcessNOTES:5Multiple Choice29. The is used to identify user requirements, evaluate the user needs effectively and efficiently, identify supplierswho can meet that need, develop agreements with those suppliers, develop the ordering mechanism, ensure paymentoccurs promptly, ascertain that the need was effectively met, and drive continuous improvement.a. demand management processb. backdoor buying processc. materials budgeting processd. forecasting processe. purchasing processANSWER:eDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:130. All of the following are objectives of a world-class purchasing organization except .a. ensure that all hard copies of purchase orders and other paper documents are filed correctly in a secure areab. develop integrated supply strategies that support business goals and objectivesc. manage the sourcing process efficiently and effectivelyd. supplier performance managemente. supply assuranceANSWER:aDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:131. Failing to respond to the needs of internal customers will diminish the confidence these users have in purchasing, andthey may try to negotiate contracts themselves (a practice known as ).a. strategic sourcingb. spend managementc. maverick buyingd. outsourcinge. internal sourcingANSWER:cDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:132. One of the most important objectives of the purchasing function is the selection, development, and maintenance ofsuppliers, a process that is sometimes described as .Cengage Learning Testing, Powered by CogneroPage 7

Chapter 2 -- The Purchasing Processa. supplier performance managementb. category managementc. customer serviced. procure-to-paye. maverick buyingANSWER:aDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:133. Which of the following is not one of the objectives in supplier performance management?a. Selecting suppliers that are competitive.b. Identifying new suppliers that have the potential for excellent performance and developing closer relationshipswith 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.ANSWER:eDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:134. Effective supply market intelligence involves all of the following except .a. updating supply markets and trends and translating their impacts on key business outcomesb. ensuring that purchasing does not exceed its annual operating budgetc. identifying emerging materials and service technologies to support company strategies in key performanceareasd. developing supply options and contingency plans to reduce riske. supporting the organization’s requirements for a diverse and globally competitive supply baseANSWER:bDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:135. is the process of collecting historical data by commodity, relative to demand from the lines of business, with theexception of personnel expenses, occupancy, and corporate spend.a. Demand managementb. Supply analysisc. Category managementd. Contract managemente. Spend analysisANSWER:eCengage Learning Testing, Powered by CogneroPage 8

Chapter 2 -- The Purchasing �s: RememberingAnalytic236. is the process of using unit and rate consumption levels to forecast and estimate future consumption in aninternal functional customer and providing guidance and input on how to optimize usage and educating the user on thetradeoffs.a. Specification managementb. Demand managementc. Category managementd. Supply market intelligencee. Cost managementANSWER:bDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:237. is the process of developing insights into stakeholder requirements, comparing these to external industryintelligence, supply base capabilities and operational risks, and developing a strategy to align internal requirements withexternal supply market conditions.a. Spend analysisb. Cost managementc. Contract managementd. Category managemente. Procure-to-payANSWER:dDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:238. is a situation that occurs when sellers seek to “go around” purchasing and instead directly contact and attemptto sell directly to end users (stakeholders).a. Insourcingb. Biddingc. Maverick buying and sellingd. Negotiatinge. OutsourcingANSWER:cDIFFICULTY: EasyKEYWORDS: Bloom’s: RememberingOTHER:AnalyticNOTES:2Cengage Learning Testing, Powered by CogneroPage 9