1. Supply strategies that are based on changes in demand and supply are known as:
a. risk-management strategies.
b. assurance-of-supply strategies.
c. cost-reduction strategies.
d. environmental-change strategies.
e. supply chain support strategies
2. Organizational objectives and supply objectives typically are expressed:
a. differently, making it difficult to translate organizational objectives into supply objectives.
b. differently, providing the supply manager multiple opportunities to tap into organizational resources.
c. the same (survival, growth, financial, and environmental), making it easy to translate organizational objectives into supply objectives.
d. the same factors (quality, quantity, price, delivery and service), but long-term at the organizational level and short-term at the supply level.
e. in ways that are very specific to the organization, making it difficult to convey objectives to suppliers
3. When developing supply strategies related to “how to buy,” decisions must be made
a. systems and procedures
b. goals and objectives
c. make or buy
d. large or small inventories
e. none of the above
4. Strategic planning can be defined as:
a. how each functional area will achieve its specific goals and objectives.
b. a procedure for allocating resources to appropriate functions in the organization.
c. taking big risks to maximize current period benefits.
d. an action plan to achieve specific long-term goals and objectives.
e. an action plan to achieve specific operational and tactical goals
5. Three major challenges exist when setting supply objectives and strategies:
a. identifying internal stakeholders, building consensus among these stakeholders, and selling top management on the results.
b. effectively interpreting corporate and supply objectives, selecting appropriate actions to achieve objectives, and integrating supply information into organizational strategies.
c. adopting efficient electronic transaction systems, designing effective strategic supply processes, and increasing internal compliance with both.
d. hiring professionals educated specifically in supply management, providing them with technical expertise, and developing leadership skills for the long-term.
e. emphasizing strategic cost management, involving key suppliers early in the process, and measuring the reduction in total cost of ownership
6. The key question in strategic supply management is:
a. How can supply strategy be kept separate from and equal to organizational strategy?
b. How can first tier suppliers contribute to the buying organization’s objectives and strategy?
c. How can first, second, third- and subsequent tiers of suppliers contribute to the buying organization’s objectives and strategy?
d. How can the supply manager develop a network of suppliers that contribute to the buying organization’s strategies and goals?
e. How can supply and the supply chain contribute effectively to organizational objectives and strategy?
7. Which one of the following is one of the six major supply strategy areas:
a. competitive-edge strategies.
b. environmental-change strategies.
c. new-product design strategies.
d. risk-management strategies.
e. cost-reduction strategies
8. Linking supply strategy to corporate strategy is:
a. essential only in manufacturing, and most have the mechanisms to link them
b. essential only in the service sector, and most lack the mechanisms to link them
c. essential in all organizations, and most have the mechanisms to link them
d. essential in all organizations, and many lack the mechanisms to link them.
e. non-essential in most types of organizations
9. An effective supply strategy primarily focuses on linking:
a. current needs to current markets.
b. future needs to future markets.
c. current needs to future markets.
d. future needs to current markets.
e. current and future needs to current and future markets.
10. To effectively manage supply risks, the supply manager must:
a. inform the corporate risk officer of a potential risk, await instructions, and implement the directive.
b. seek input from senior executives in other functional areas, propose a risk mitigation plan, and await instructions from senior management.
c. identify and classify risks, assess the potential impact, and develop a risk mitigation strategy.
d. review the commodity strategy, revise it as needed, and implement the strategy revision.
e. confer with the organization’s management consultant, provide all requested data, and implement the consultant’s plan.
11. Organizations commit resources to cross-functional team development to:
a. give internal users ownership of tasks and problems.
b. achieve time, quality, or cost-reduction targets
c. promote diversity in the workplace.
d. give supply ownership of tasks and problems.
e. cross-train employees in case of downsizing.
12. A purchasing consortium:
a. consists of two or more divisions of the same organization that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
b. results in price concessions from suppliers, but usually does not speed up the purchasing process.
c. is a form of collaborative purchasing used only by the public sector to deliver a wider range of services at a lower total cost.
d. consists of two or more independent organizations that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
e. speeds up the purchasing process, but does not usually result in price concessions from suppliers.
13. Supply’s contribution to the organization’s competitive position depends on its ability to:
a. reduce costs.
b. enhance revenues.
c. manage assets.
d. a and c.
e. a, b and c
14. Hybrid supply structures typically:
a. amplify the disadvantages of centralization
b. amplify the advantages of decentralization
c. capture the benefits of both centralized and decentralized structures
d. are used in small to medium-sized organizations.
e. are used in service organizations of all sizes.
15. The organizational structure (centralized, decentralized, or hybrid) of the supply function:
a. influences how purchasing executes its responsibilities, but not how it works with other areas of the firm, or the skills and capabilities needed by the supply personnel.
b. influences how purchasing executes its responsibilities, how it works with other areas of the firm, and the skills and capabilities needed by the supply personnel.
c. influences how purchasing works with other areas of the firm, and the skills and capabilities needed by the supply personnel, but not how it executes its responsibilities
d. influences the skills and capabilities needed by supply personnel, but not how it executes its responsibilities, or how it works with other areas of the firm.
e. has little influence on how purchasing executes its responsibilities, how it works with other areas of the firm, or the skills and capabilities needed by the supply personnel.
16. Close to 70 percent of the value of any given requirement is established when needs are recognized and described. Therefore, the following functions should work together during need recognition and description:
a. the primary user and specifier.
b. the primary user and supply.
c. the primary user, design engineering and supply.
d. the primary user, design engineering, supply and accounting.
e. the primary user, design engineering, supply and all other relevant functional areas such as accounting/finance, marketing and operations.
17. Supply can provide an uninterrupted flow of materials, supplies and services by:
a. holding large inventories.
b. holding small inventories.
c. standardizing capital equipment, materials, MRO and services.
d. b and c.
e. a and c
18. Which factors have a major influence on supply’s level in the organization?
a. the ratio of purchased material and services costs as a percentage of total costs or income.
b. the size of the supply base.
c. the nature of the products or services acquired.
d. the extent to which supply and suppliers can provide competitive advantage.
e. the credentials of the existing supply personnel
19. A change in how supply is organized and structured is the result of:
a. the changing preference of the Chief Purchasing Officer.
b. an assessment of the best purchasing structure given the supply base.
c. a change in the overall corporate organizational structure.
d. a determination of the easiest change to manage internally.
e. a consensus among the supply management professionals in the company
20. Specialization within the supply function:
a. is necessary because most tasks are transactional.
b. has no impact on materials or services total cost of ownership.
c. increases operating costs beyond the benefits of specialization.
d. allows staff to develop expertise in particular areas.
e. is seldom required now that so many tasks are automated.