Sourcing

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The Operations Function
Operations and Supply Chain Strategy
Product Design
Process Selection
Service Delivery System Design
Process-Flow Analysis
Lean Thinking and Lean Systems
Managing Quality
Quality Control and Improvement
Forecasting
Capacity Planning
Scheduling Operations
Project Planning and Scheduling
Independent Demand Inventory
Materials Requirements Planning and ERP
Supply Chain Management
Sourcing
Global Logistics

All Questions

Question 1

Free

Multiple Choice

Which of the following is a sourcing strategic decision?

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Which products or services should be supplied from offshore?

How should suppliers be managed on an ongoing basis?

Which suppliers should be selected to provide the desired products or services?

All of the above.

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Question 2

Free

Multiple Choice

Purchasing activities include

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choosing suppliers.

negotiating contracts.

managing buyer-supplier relationships.

all of the above.

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Question 3

Free

Multiple Choice

Which of the following is a purchasing decision?

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Which products and services does the firm want to outsource?

What products or services should be supplied from offshore?

How will the firm maintain positive relationships with suppliers?

All of the above.

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Question 4

Free

Multiple Choice

When purchasing finds savings in the cost of goods sold,

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this is called the purchasing effect.

such savings fall directly to the bottom line.

both of the above are true.

neither of the above is true.

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Question 5

Free

Multiple Choice

Which of the following statements concerning sourcing is true?

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The trend in most industries is to increase vertical integration for improved flexibility.

The primary goal of sourcing is to find suppliers offering the lowest price per unit.

Evidence of a commitment to social responsibility is often required of suppliers.

All of the above.

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Question 6

Multiple Choice

The profit leverage effect (ratio)is calculated by

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dividing 1.0 by the profit margin.

dividing pretax earnings by the cost of goods sold.

dividing sales by the cost of goods sold.

none of the above.

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Question 7

Multiple Choice

A company has sales of $150 million,cost of goods sold of $100 million,and a before-tax profit of 8%.If purchasing was able to reduce the cost of goods sold by $5 million,how much additional sales would be required to achieve the same impact on profit?

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$5 million.

$10 million.

$55 million.

$62.5 million.

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Question 8

Multiple Choice

A company has the following financial information (in millions of $): What is the profit leverage effect for this firm?

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26.31%

12.63%

7.92

8.54

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Question 9

Multiple Choice

A company has the following financial information (in millions of $):
What is the percentage increase in earnings from a 5% savings in materials purchasing?

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5.0%

14.3%

12.63%

19.0%

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Question 10

Multiple Choice

Common goals for sourcing include all of the following EXCEPT

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finding suppliers with the advanced technological abilities needed.

finding suppliers with the lowest price per unit.

finding suppliers with a certified process for quality control.

finding suppliers with strong ethical practices.

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Question 11

Multiple Choice

Concerning outsourcing,which of the following is considered a qualitative cost (that is,a cost that is difficult to quantify)?

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Costs of work stoppages and supply chain disruptions.

Costs of drafting and negotiating contracts with suppliers.

Inventory carrying costs.

All of the above.

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Question 12

Multiple Choice

Which of the following is NOT a disadvantage of outsourcing?

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The risk of a supplier underbidding and later charging more.

The possibility of forgetting how to do the work.

The possibility of a supplier able to deliver faster than needed.

The risk of a breakdown in the supplier's supply chain.

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Question 13

Multiple Choice

Offshoring refers to

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a product or service provided by a supplier.

a product or service from a supplier located on a different continent.

a product or service made or delivered in a foreign country.

a product or service exported to a different country.

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Question 14

Multiple Choice

A manufacturer has decided to outsource and offshore a small electric motor that it currently manufactures itself.It has found an offshore supplier that charges $925,000 for a minimum order quantity of 5,000 motors.Shipping costs for this quantity are $15,000.The buyer expects to place four orders per year to meet its annual need for 20,000 motors.Annual carrying cost is 25% of unit price,and import tariffs are 12% of unit price.The company expects to spend $12,500 per year on contracting and relationship maintenance.What is the total cost of outsourcing and offshoring this motor?

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$208.65 per unit.

$212.28 per unit.

$213.71 per unit.

None of the above.

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Question 15

Multiple Choice

The main reason for offshoring is

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lower item price.

lower wages.

lower total cost.

higher productivity.

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Question 16

Multiple Choice

Which of the following indicates an item to be a good candidate for outsourcing?

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The item is important to the company's competitive advantage.

The item is a standard product also sold to many other companies.

The item technologically advanced and will require close control.

All of the above.

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Question 17

Multiple Choice

Which of the following is NOT a reason to reshore a purchased item?

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Political instability in the foreign country.

Cost of oil increasing globally.

Congestion at shipping ports.

Foreign suppliers achieving economies of scale.

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Question 18

Multiple Choice

The first step in a supply base optimization effort is

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determine the appropriate number of suppliers for the item(s).

analyze the company's buying patterns.

examine offshore decisions for reshoring opportunities.

establish a goal for total spend reduction.

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Question 19

Multiple Choice

Spend analysis includes

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looking at what the company is buying, from whom, in what quantities, and at what price.

looking at spend data by division or facility to isolate spending patterns.

looking for opportunities to disperse purchasing activities to more areas within the organization.

all of the above.

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Question 20

Multiple Choice

A purchasing executive concerned about a perceived lack of control over purchasing activities should

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determine the profit leverage level.

create a supplier scorecard.

conduct a spend analysis.

conduct a preferred supplier analysis.

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Sourcing

Which of the following is a sourcing strategic decision?

Purchasing activities include

Which of the following is a purchasing decision?

When purchasing finds savings in the cost of goods sold,

Which of the following statements concerning sourcing is true?

The profit leverage effect (ratio)is calculated by

A company has sales of $150 million,cost of goods sold of $100 million,and a before-tax profit of 8%.If purchasing was able to reduce the cost of goods sold by $5 million,how much additional sales would be required to achieve the same impact on profit?

A company has the following financial information (in millions of $): What is the profit leverage effect for this firm?

A company has the following financial information (in millions of $): What is the percentage increase in earnings from a 5% savings in materials purchasing?

Common goals for sourcing include all of the following EXCEPT

Concerning outsourcing,which of the following is considered a qualitative cost (that is,a cost that is difficult to quantify)?

Which of the following is NOT a disadvantage of outsourcing?

Offshoring refers to

The main reason for offshoring is

Which of the following indicates an item to be a good candidate for outsourcing?

Which of the following is NOT a reason to reshore a purchased item?

The first step in a supply base optimization effort is

Spend analysis includes

A purchasing executive concerned about a perceived lack of control over purchasing activities should

A company has the following financial information (in millions of $):
What is the percentage increase in earnings from a 5% savings in materials purchasing?