Test Bank Ch6 Sourcing

File: ch06, Chapter 6: Sourcing

Multiple Choice

1. __________ is responsible for all activities related to purchasing goods and services.
2. Manufacturing
3. Marketing
4. Sourcing
5. Logistics
6. Finance

Level: Easy

1. Sourcing addresses the __________ part of the supply chain:
2. Channels of distribution
3. Market segmentation
4. Upstream
5. Downstream
6. None of the above

Level: Easy

1. __________ sourcing focuses on more than just price when selecting suppliers.
2. Innovative
3. Supply side
4. Tactical
5. Functional
6. Strategic

Level: Medium

1. Factors in the marketplace that elevated sourcing from a clerical-oriented function include:
2. Internet technology
3. Global competition
4. Growth of consumer sourcing
5. Multiple distribution channels
6. a and b

Level: Easy

1. Purchasing laundry detergent at a retail store is an example of:
2. Commercial sourcing
3. Consumer sourcing
4. Retail sourcing
5. Mass customization
6. None of the above

Level: Medium

1. Attributes of a commercial sourcing include:
2. Multiple suppliers of common products
3. Buyers are final consumers of products
4. Buyer does not negotiate purchase price
5. Buyers have specialized purchasing needs
6. All of the above

Level: Difficult

1. The sourcing function impacts an organization in many ways including:
2. Operational
3. Financial
4. Strategic
5. All of the above
6. None of the above

Level: Easy

1. The fact that an organization invests significant amounts of cash in the sourcing function relates to which impact of the sourcing function:
2. Risk mitigation
3. Strategic
4. Finance
5. Operational
6. Information

Level: Easy

1. Keeping the organization at the forefront of new technologies and suppliers relates to which impact of the sourcing function:
2. Risk mitigation
3. Strategic
4. Finance
5. Operational
6. Information

Level: Easy

1. Utilizing a request for quotation (RFQ) is part of the ___________ process:
2. Supplier evaluation
3. Risk mitigation
4. Request for proposal
5. Supplier selection
6. a and b

Level: Medium

1. The best way to evaluate price in the sourcing process is:
2. Fair price
3. Purchase price
4. Cost
5. Break even analysis
6. Total cost of ownership

Level: Difficult

1. Criteria for utilizing competitive bidding practices include:
2. Purchasing high volumes
3. Clear specifications for product purchased
4. Standardized products to be purchased
5. None of the above
6. All of the above

Level: Difficult

1. Building longer term supplier relationships is more effective through ________ practices:
2. Negotiation
3. Early supplier involvement
4. Competitive bidding
5. Mass customization
6. E-auctions

Level: Medium

1. Attributes of functional product sourcing include:
2. Unstable demand
3. Complex products
4. Customized products
5. Predictable demand
6. Short life-cycles

Level: Difficult

1. __________ products have short life-cycles and unpredictable demand:
2. Innovative
3. Standardized
4. Functional
5. End of life
6. Predictable

Level: Easy

1. An example of a product with a stable supply process would be:
2. Tablet computer
3. Electric car
4. Solar panels
5. Diapers
6. None of the above

Level: Easy

1. A tablet computer would have a ________ type of supply process.
2. Project
3. Continuous
4. Stable
5. Innovative
6. Evolving

Level: Medium

1. A strategy utilized when delaying product differentiation until later in the supply chain is:
2. Standardization
3. Customization
4. Postponement
5. Early supplier involvement
6. None of the above

Level: Easy

1. __________ supply chains are best utilized for products that are innovative and have a stable supply base:
2. Risk-hedging
3. Efficiency-focused
4. Agile
5. Responsive
6. Stable

Level: Difficult

1. __________ supply chains are best utilized for products that have both high demand and supply uncertainty:
2. Risk-hedging
3. Efficiency-focused
4. Agile
5. Responsive
6. Stable

Level: Difficult

1. Which sourcing strategy strikes a balance between economies of scale and risk mitigation:
2. Early supplier involvement
3. Single sourcing
4. Multiple sourcing
5. Supplier “portfolio”
6. Outsourcing

Level: Medium: Difficult

1. ______ and _______ are key dimensions for the sourcing function to consider when evaluating an outsourcing or off-shoring strategy:
2. Cost and channels
3. Innovative and functional
4. Standardization and customization
5. Scope and criticality
6. None of the above

Level: Easy

1. Benefits to buyers from utilizing e-auctions include:
2. Market transparency
3. Increased error rate
4. Complex supplier comparisons
5. Increased cycle time
6. Fewer suppliers in the decision set

Level: Medium

1. A weeks of supply measure that is high relative to industry standards may indicate:
2. Too much inventory is being held
3. Too much cash invested in inventory
4. Greater chance of a stock-out
5. a and b
6. All of the above

Level: Difficult

1. Industries/Products that typically need a high inventory turn measure include:
2. Commodities
3. Stable demand
4. Short life-cycle
5. Functional
6. Machinery

Level: Medium

True/False

1. Sourcing is the function that is responsible for activities related to purchasing goods and services.

Level: Easy

1. The supply side of an organization is related to the marketing function.

Level: Easy

1. Sourcing is responsible for the “downstream” part of an organization.

Level: Easy

1. Purchasing is a strategic function within an organization.

Level: Medium

1. The goal of strategic sourcing is to provide a competitive advantage to an organization and create short-term relationships with suppliers.

Level: Medium

1. The importance of sourcing has grown as companies seek to develop a global supply base.

Level: Easy

1. A consumer purchasing a t-shirt at a retail store is an example of commercial sourcing.

Level: Difficult

1. In consumer purchasing, there are many suppliers of common goods and services.

Level: Medium

1. Sourcing has a significant financial impact on an organization because large amounts of cash are spent on materials and services.

Level: Easy

1. The risk mitigation role that sourcing plays in an organization relates to evaluating suppliers’ ethical standards.

Level: Medium

1. The sourcing function plays a key educational/knowledge role within an organization.

Level: Medium

1. Supplier selection typically begins with an organization soliciting a request for quotation (RFQ).

Level: Easy

1. Typically an organization should look to its existing supply base before soliciting a new supplier.

Level: Difficult

1. To reduce errors and complexity, sourcing is the only function that should interact with suppliers.

Level: Difficult

1. A key concept for sourcing managers to understand is the difference between cost and price.

Level: Easy

1. Total cost of ownership (TCO) is the purchase price plus transportation.

Level: Medium

1. When selecting a new supplier, competitive bidding is an effective way to develop a longer-term business relationships.

Level: Medium

1. The negotiations approach to supplier selection typically involves multiple criteria in order to select the best supplier.

Level: Easy

1. Competitive bidding is most effective when there are multiple suppliers in the marketplace.

Level: Medium

1. The sourcing process for functional products is easier to manage because of unpredictable demands.

Level: Medium

1. Innovative products have higher profit margins but they are more difficult for the sourcing function to manage.

Level: Easy

1. Chicken soup would be an example of a stable supply process with an efficiency-focused supply chain.

Level: Easy: Medium

1. Electric car technology would be an example of an evolving supply process.

Level: Easy

1. A biotechnology/medical product would be an example of a risk-hedging supply chain with significant focus on supplier stability.

Level: Difficult

1. Agile supply chains are the most difficult to manage due to supply and demand uncertainty.

Level: Easy

1. Achieving greater economies of scale is one advantage of single sourcing.

Level: Easy

1. Single sourcing is no longer a risky strategy due to technological advances in purchasing.

Level: Difficult

1. Scope and criticality are important when considering an outsourcing or off-shoring strategy.

Level: Easy

1. E-auctions have allowed organizations to develop longer-term relationships with suppliers.

Level: Medium

1. Understanding inventory turnover is critical to evaluating the effectiveness of the sourcing function.

Level: Easy

Essay

1. Briefly describe the five critical roles that sourcing provides in an organization.

Level: Medium

1. Provide three criteria for why an organization would use competitive bidding and three reasons for negotiation in supplier selection.

Level: Medium

1. Briefly describe the advantages and disadvantages to a single sourcing strategy.

Level: Easy