SCM 371 EXAM 2 QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
What is the key difference between global sourcing and international purchasing? -
Answers - The integrated and coordinated approach of global sourcing
What defines reshoring? - Answers - Bringing production back to the home country
Which of the following is the most common reason for outsourcing - Answers - Reduce
and control operating costs
What best describes the overall objectives of the supplier selection and evaluation
process? - Answers - To reduce sourcing risk and maximize value to buyer
What is the expected benefit of single sourcing? - Answers - Increased leverage and
power for buyers, closer supplier relationships
What is considered primary criteria for evaluating suppliers? - Answers - Cost/price;
quality; delivery
Target costing as a quantitative process starts with? - Answers - Market Price
What describes Total Cost of Ownership (TCO) - Answers - It is a purchasing focused
approach to understand all relevant costs, it maps the costs related to the supply of
products, can support supplier selection decisions
How do you construct a cost driver analysis calculation? - Answers - By modeling costs
based on cause and effect
To effectively align buying strategies, a supply manager must understand the overall
goals of the business (T or F) - Answers - True
What does the strategic positioning of BMW include? - Answers - High Quality
Defining the company's competitive position has guidelines that includes - Answers -
Role of category, value proposition, strategic positioning, role of purchasing, and
customer
The key to alignment is to understand the goals or mission of the organization that you
work for, then look at the goals of the operations area (T or F) - Answers - False
,What does Aldi's sourcing strategy mean for you as a decision maker? - Answers -
Everything you do needs to lower the cost of purchased goods--without sacrificing
quality.
What does looking at production processes allow you to look for? - Answers - a job
shop and a highly automated process
Your primary goal as a purchasing agent is to try to ensure an interrupted flow of supply
(T or F) - Answers - False
The nature of the item and process includes an assessment of which of the following? -
Answers - Complexity, types of materials, labor content, production processes
The more control you have over price and availability, the better you can reduce risk. (T
or F) - Answers - True
Beyond total supply, as a purchasing agent, what else would you need to track? -
Answers - Capacities and Capabilities
An action plan translates theory into practice. (T or F) - Answers - True
Suppliers can only be segmented in one way. (T or F) - Answers - False
What are the important elements of a typical category strategy implementation action
plan? - Answers - What needs to be done
When it will be done, including key progress milestones for core activities
Who is responsible
What resources are needed
If a company spends $5 million annually on its goods and services, what percent of the
total spend is $400,000? - Answers - 8%
As a purchasing agent, cost modeling helps you select suppliers who can provide you a
competitive prices and also earn a fair profit for themselves. (T or F) - Answers - True
Unilever's purpose is to make sustainable living common place (T or F) - Answers -
True
Total cost of ownership tries to determine what it really costs to do business with a
particular supplier in a particular location. What costs might be considered if you are
doing business with a supplier in China? - Answers - Transportation costs
Cost of holding inventory
Duties
Tariffs
Security
, What issues does the supply side include? - Answers - Capabilities of existing suppliers
Aggregation of supply situation
Potential shocks or disruptions
Governmental regulations
Category analysis supply and demand issues include(s) which of the following? -
Answers - Scarcity of resources
Duties/Tariffs/Taxes
Total cost of ownership
Political and ecological trends or risks
To understand the demand side of the business all you need to do is talk to marketing
and sales. (T or F) - Answers - False
The first step in a cost model is to baseline and segment the spend (T or F) - Answers -
True
If you are expected to reduce spend by 5% on a category where $2,500,000 is spent
each year, what is the amount you must save? - Answers - $125,000
Strategic level cost modeling helps a supply manager make a selection between two
suppliers of the same material (T or F) - Answers - False
In order to perform cost modeling what do you need to understand? - Answers - Data
triangulation
Total cost of ownership
Key drivers
Cost elements
You should use ______________________ to build the total cost of ownership model at
the commodity (or category) level. - Answers - Cost drivers
The outsourcing decision is really about who can do the job best. (T or F) - Answers -
True
You work for a company located in the United States and have decided to buy customer
contact center services from a company located in India. What is this is called? -
Answers - Offshore Outsourcing
A buy decision is also called reshoring (T or F) - Answers - False
If the best supplier is located outside of your home country, the decision to buy
overseas is known as outsourcing.(T or F) - Answers - False
Which of the following activities can be outsourced? - Answers - Purchasing, Payment
collections, risk management, design of products
ACCURATE ANSWERS
What is the key difference between global sourcing and international purchasing? -
Answers - The integrated and coordinated approach of global sourcing
What defines reshoring? - Answers - Bringing production back to the home country
Which of the following is the most common reason for outsourcing - Answers - Reduce
and control operating costs
What best describes the overall objectives of the supplier selection and evaluation
process? - Answers - To reduce sourcing risk and maximize value to buyer
What is the expected benefit of single sourcing? - Answers - Increased leverage and
power for buyers, closer supplier relationships
What is considered primary criteria for evaluating suppliers? - Answers - Cost/price;
quality; delivery
Target costing as a quantitative process starts with? - Answers - Market Price
What describes Total Cost of Ownership (TCO) - Answers - It is a purchasing focused
approach to understand all relevant costs, it maps the costs related to the supply of
products, can support supplier selection decisions
How do you construct a cost driver analysis calculation? - Answers - By modeling costs
based on cause and effect
To effectively align buying strategies, a supply manager must understand the overall
goals of the business (T or F) - Answers - True
What does the strategic positioning of BMW include? - Answers - High Quality
Defining the company's competitive position has guidelines that includes - Answers -
Role of category, value proposition, strategic positioning, role of purchasing, and
customer
The key to alignment is to understand the goals or mission of the organization that you
work for, then look at the goals of the operations area (T or F) - Answers - False
,What does Aldi's sourcing strategy mean for you as a decision maker? - Answers -
Everything you do needs to lower the cost of purchased goods--without sacrificing
quality.
What does looking at production processes allow you to look for? - Answers - a job
shop and a highly automated process
Your primary goal as a purchasing agent is to try to ensure an interrupted flow of supply
(T or F) - Answers - False
The nature of the item and process includes an assessment of which of the following? -
Answers - Complexity, types of materials, labor content, production processes
The more control you have over price and availability, the better you can reduce risk. (T
or F) - Answers - True
Beyond total supply, as a purchasing agent, what else would you need to track? -
Answers - Capacities and Capabilities
An action plan translates theory into practice. (T or F) - Answers - True
Suppliers can only be segmented in one way. (T or F) - Answers - False
What are the important elements of a typical category strategy implementation action
plan? - Answers - What needs to be done
When it will be done, including key progress milestones for core activities
Who is responsible
What resources are needed
If a company spends $5 million annually on its goods and services, what percent of the
total spend is $400,000? - Answers - 8%
As a purchasing agent, cost modeling helps you select suppliers who can provide you a
competitive prices and also earn a fair profit for themselves. (T or F) - Answers - True
Unilever's purpose is to make sustainable living common place (T or F) - Answers -
True
Total cost of ownership tries to determine what it really costs to do business with a
particular supplier in a particular location. What costs might be considered if you are
doing business with a supplier in China? - Answers - Transportation costs
Cost of holding inventory
Duties
Tariffs
Security
, What issues does the supply side include? - Answers - Capabilities of existing suppliers
Aggregation of supply situation
Potential shocks or disruptions
Governmental regulations
Category analysis supply and demand issues include(s) which of the following? -
Answers - Scarcity of resources
Duties/Tariffs/Taxes
Total cost of ownership
Political and ecological trends or risks
To understand the demand side of the business all you need to do is talk to marketing
and sales. (T or F) - Answers - False
The first step in a cost model is to baseline and segment the spend (T or F) - Answers -
True
If you are expected to reduce spend by 5% on a category where $2,500,000 is spent
each year, what is the amount you must save? - Answers - $125,000
Strategic level cost modeling helps a supply manager make a selection between two
suppliers of the same material (T or F) - Answers - False
In order to perform cost modeling what do you need to understand? - Answers - Data
triangulation
Total cost of ownership
Key drivers
Cost elements
You should use ______________________ to build the total cost of ownership model at
the commodity (or category) level. - Answers - Cost drivers
The outsourcing decision is really about who can do the job best. (T or F) - Answers -
True
You work for a company located in the United States and have decided to buy customer
contact center services from a company located in India. What is this is called? -
Answers - Offshore Outsourcing
A buy decision is also called reshoring (T or F) - Answers - False
If the best supplier is located outside of your home country, the decision to buy
overseas is known as outsourcing.(T or F) - Answers - False
Which of the following activities can be outsourced? - Answers - Purchasing, Payment
collections, risk management, design of products
