Test Bank Answers Global Sourcing and Procurement Ch13 - Supply Chain Management Core 5e Complete Test Bank by F. Robert Jacobs. DOCX document preview.
Operations and Supply Chain Management: The Core, 5e (Jacobs)
Chapter 13 Global Sourcing and Procurement
1) Strategic sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) Two common measures to evaluate supply chain efficiency are the consumer price index and the beta flow system.
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Two common measures to evaluate supply chain efficiency are the inventory turnover and weeks-of-supply ratios.
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
4) Inventory turn values that are considered good differ by industry and the type of products being handled.
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) Retailer behavior when stocking up during promotion periods (where the prices of goods are reduced) is called backward buying.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) The phenomenon that magnifies the variability in order quantities for goods as orders move through the supply chain from the customer to the producer is called the bullwhip effect.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Functional products include staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations.
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
8) The optimal strategy for functional products is to use an efficient supply chain.
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
9) The optimal strategy for functional products is to use a responsive supply chain.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) The optimal strategy for innovative products is to use an efficient supply chain.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
11) The best strategy for innovative products is to use either a responsive or an agile supply chain.
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
12) Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
13) Outsourcing allows a firm to achieve an improved focus on its core competencies.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
14) Logistics is a term indicating transportation choices for goods produced internationally but consumed domestically.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
15) Logistics is a term that refers to the management functions that support the complete cycle of material flow, from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
16) A financially-driven reason for outsourcing is that it can turn fixed costs into variable costs.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
17) A financially-driven reason for outsourcing is that it can shorten cycle time.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
18) An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
19) An organizationally-driven reason for outsourcing is that it can transform the organization.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
20) A financially-driven reason for outsourcing is that it can reduce costs through a lower cost structure.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
21) An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
22) A financially-driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
23) A stable supply process is one where product volumes are high, demand is predictable and there is a long product life.
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
24) A stable supply process is one where the manufacturing process and the underlying technology are mature and the supply base is well established.
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
25) Firms producing functional products are forced to introduce a steady stream of innovations in order to survive.
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
26) Inventory turnover and weeks of supply are mathematically the inverse of one another.
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
27) Green sourcing is only about finding new environmentally friendly technologies and increasing the use of recyclable materials.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
28) An important opportunity in green sourcing is waste reduction opportunities.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
29) Green sourcing requires incorporating new criteria for evaluating alternatives.
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
30) The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but does not include any of the costs related to disposing of the item after it is no longer useful.
Difficulty: 1 Easy
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
31) The total cost of ownership (TCO) can be categorized into three areas: acquisition costs, ownership costs, and post-ownership costs.
Difficulty: 1 Easy
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
32) Overemphasis on purchase price frequently results in failure to address other significant costs.
Difficulty: 1 Easy
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
33) In conducting a total cost of ownership analysis, it is probably best to use a team representing the key functional areas.
Difficulty: 1 Easy
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
34) A firm that controls most of the activities in its supply chain is said to be vertically integrated.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
35) Capability sourcing refers to outsourcing the functions that they do best to trusted key partners.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
36) The inventory turnover ratio used in measuring supply chain efficiency is found by the ratio of which of the following?
A) Cost of goods sold/Average aggregate inventory value
B) Fixed costs/Variable costs
C) Sales costs/Marketing costs
D) Cost of goods sold/Cost to sell goods
E) Operations flow costs/Suppliers flow costs
Inventory turnover | = | Cost of goods sold |
Average aggregate inventory value |
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
37) The total value of all items held in inventory for the firm valued at cost is which of the following?
A) Cost of goods to be sold
B) Average aggregate inventory value
C) Weeks supply of goods
D) Inventory turnover
E) None of these
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
38) If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply?
A) 45,000
B) 234
C) 120
D) 23.4
E) 4.5
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
39) If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply?
A) 1,040
B) 606
C) 104
D) 60.6
E) 2.0
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
40) If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is inventory turnover?
A) 60
B) 10.4
C) 2
D) 0.5
E) None of these
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
41) If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover?
A) 19.23
B) 4.5
C) 0.8654
D) 0.2222
E) None of these
Difficulty: 1 Easy
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
42) When using the supply chain uncertainty framework to classify supply chains, a supply chain for functional products with an evolving supply process is called which of the following?
A) Efficient
B) Forward looking
C) Agile
D) Risk hedging
E) Responsive
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
43) When using the supply chain uncertainty framework to classify supply chains, a supply chain for functional products with a stable supply process is called which of the following?
A) Efficient
B) Forward looking
C) Agile
D) Risk hedging
E) Responsive
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
44) When using the supply chain uncertainty framework to classify supply chains, a supply chain for innovative products with an evolving supply process is called which of the following?
A) Efficient
B) Forward looking
C) Agile
D) Risk hedging
E) Responsive
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
45) When using the supply chain uncertainty framework to classify supply chains, a supply chain for innovative products with a stable supply process is called which of the following?
A) Efficient
B) Forward looking
C) Agile
D) Risk hedging
E) Responsive
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
46) The effect of the lack of synchronization among supply chain members is referred to as which of the following?
A) Forward buying
B) Continuous replenishment
C) Bullwhip effect
D) Metcalf's Law
E) Being out of step
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
47) In outsourcing, which of the following internal activities and decision responsibilities cannot be transferred to outside contractors?
A) Activities involving people
B) Activities involving facilities
C) Activities involving equipment
D) Activities involving shareholders
E) Activities involving technology
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
48) Which of the following is an organizationally-driven reason for outsourcing?
A) Improve effectiveness by focusing on what the firm does best
B) Turn fixed costs into variable costs
C) Reduce costs through lowered cost structure and increased flexibility
D) Improve risk management
E) Improve credibility and image by associating with superior providers
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
49) Which of the following is not an organizationally-driven reason for outsourcing?
A) Improve effectiveness by focusing on what the firm does best
B) Improve flexibility to meet changing demand for products and services
C) Increase product and service value by improving response to customer needs
D) Improve credibility and image by associating with superior providers
E) All of these are organizationally-driven reasons for outsourcing
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
50) Which of the following is an improvement-driven reason for outsourcing?
A) Shorten cycle time
B) Improve effectiveness by focusing on what the firm does best
C) Increase product and service value by improving response to customer needs
D) Turn fixed costs into variable costs
E) Reduce costs through a lower cost structure
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
51) Which of the following is not an improvement-driven reason for outsourcing?
A) Improve quality and productivity
B) Enhance effectiveness by focusing on what you do best
C) Improve risk management
D) Obtain expertise, skills and technologies not otherwise available
E) Improve credibility and image by associating with superior providers
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
52) When considering outsourcing, what should firms be sure to avoid?
A) Losing control of noncore activities that don't distinguish the firm
B) Allowing outsourcing to develop into a substitute for innovation
C) Giving the outsourcing partner opportunities to become a strong competitor
D) Allowing employees transferred to the outsourcing partner to rejoin the firm
E) Adverse corporate tax implications of asset transfers to the outsourcing partner
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
53) Typically, which is the most challenging kind of supply chain to manage?
A) Agile supply chain
B) Efficient supply chain
C) Risk-hedging supply chain
D) Erratic supply chain
E) Responsive supply chain
Difficulty: 2 Medium
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
54) Which of the following product categories includes fashionable clothing, personal computers, and other products that typically have a very brief life cycle?
A) Functional products
B) Dysfunctional products
C) Innovative products
D) Bullwhip products
E) Value density products
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
55) Which of the following is not an improvement-driven reason to outsource?
A) Improve risk management
B) Increase commitment in a noncore area
C) Shorten cycle time
D) Improve quality and productivity
E) Obtain expertise, skills and technologies that are otherwise not available
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
56) Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) to arm's length relationships (outsource)?
A) Cost
B) Location
C) Investment
D) Coordination
E) Control
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
57) The six-step process for green sourcing does not include which of the following?
A) Assess the opportunity
B) Assess the supply base
C) Confer with environmental groups
D) Engage sourcing agents
E) Institutionalize the sourcing strategy
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
58) The six-step process for green sourcing includes which of the following?
A) Provide a press release to local (and perhaps national) media
B) Include members of environmental groups in the decision
C) Notify the state and federal environmental agencies of your plans
D) Perform an environmental impact study
E) Develop the sourcing strategy
Difficulty: 1 Easy
Topic: Outsourcing
Learning Objective: 13-02 Explain why companies outsource processes.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
59) Ownership costs are incurred after the initial purchase and are associated with the ongoing use of the product or material. Which of the following is not an ownership cost listed in the text?
A) Financing costs
B) Energy costs
C) Taxes
D) Maintenance and repair costs
E) Supply network costs
Difficulty: 2 Medium
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
60) Acquisition costs include which of the following costs?
A) Quality costs
B) Maintenance and repair costs
C) Environmental costs
D) Supply chain costs
E) Customer dissatisfaction costs
Difficulty: 2 Medium
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
61) Ownership costs include which of the following costs?
A) Environmental costs
B) Warranty costs
C) Supply chain costs
D) Quality costs
E) Taxes
Difficulty: 2 Medium
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
62) In the six-step process for Green Sourcing the initial step is Assessing the Opportunity. Which of the following is not among the five most common areas of relevant costs to be taken into account?
A) Energy
B) Packaging
C) Water
D) Engineering
E) Recycling
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
63) At which stage in the six-step process for Green Sourcing are metrics against which vendors will be measured for the contract's duration defined?
A) Assessing the opportunity
B) Engage internal supply chain sourcing agents
C) Assess the supply base
D) Implement the sourcing strategy
E) Institutionalize the sourcing strategy
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
64) Ownership costs incurred after the initial purchase and associated with the ongoing use of the product or material purchased include which of the following?
A) Energy usage
B) Purchase price
C) Product liability costs
D) Warranty costs
E) Customer dissatisfaction costs
Difficulty: 1 Easy
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
65) In the text example of radically different way of sourcing for subassemblies for Boeing, all except one of the following countries were mentioned.
A) China
B) Italy
C) France
D) South Korea
E) Japan
Difficulty: 1 Easy
Topic: Strategic Sourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
66) Warranty costs are part of (choose the most appropriate)
A) Acquisition cost
B) Total cost of ownership
C) Post-ownership costs
D) B and C
E) None of the above
Difficulty: 2 Medium
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
67) First Among Best Solar Inc. announces that they will take back free of cost, all of their solar panels that are no longer useful. Till now, the cost of disposal was significant. This action reduces
A) Acquisition cost
B) Total cost of ownership
C) Post-ownership costs
D) B and C
E) None of the above
Difficulty: 2 Medium
Topic: Total Cost of Ownership
Learning Objective: 13-03 Analyze the total cost of ownership.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
68) Other things remaining the same, if the average aggregate inventory value goes down, then
A) inventory turnover ratio and weeks of supply will both go down.
B) inventory turnover ratio will go down, but the weeks of supply will stay the same.
C) inventory turnover ratio and weeks of supply will both go up.
D) inventory turnover ratio will go up, but weeks of supply will go down.
E) inventory turnover ratio stay the same, but weeks of supply will go down.
Inventory turnover | = | Cost of goods sold |
Average aggregate inventory value |
Weeks of supply | = | Average aggregate inventory value | × | 52 weeks |
Cost of goods sold |
Difficulty: 2 Medium
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
69) Other things remaining the same, if the cost of goods sold decreases, then
A) inventory turnover ratio and weeks of supply will both go up.
B) inventory turnover ratio will go down, but the weeks of supply will go up.
C) inventory turnover ratio and weeks of supply will both go down.
D) inventory turnover ratio will go up, but weeks of supply will go down.
E) inventory turnover ratio will stay the same, but weeks of supply will go down.
Inventory turnover | = | Cost of goods sold |
Average aggregate inventory value |
Weeks of supply | = | Average aggregate inventory value | × | 52 weeks |
Cost of goods sold |
Difficulty: 2 Medium
Topic: Measuring Sourcing Performance
Learning Objective: 13-04 Evaluate sourcing performance.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
70) In the sourcing/purchasing design matrix, there are three variables: contract duration, transaction costs and specificity (assume levels as short, medium and long for contract duration and for the rest, low, medium and high). Vendor managed inventory belongs to
A) long contract duration, high transaction costs and low specificity.
B) short contract duration, high transaction costs and low specificity.
C) long contract duration, low transaction costs and low specificity.
D) long contract duration, high transaction costs and high specificity.
E) long contract duration, low transaction costs and high specificity.
Difficulty: 2 Medium
Topic: Outsourcing
Learning Objective: 13-01 Explain what strategic sourcing is.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
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Supply Chain Management Core 5e Complete Test Bank
By F. Robert Jacobs