SCM 371 FINAL EXAM QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
The key decisions and plans in corporate strategy address: What business are we in
and how will we allocate resources among these businesses? - Answers - True
When developing supply strategies, the supply manager must determine: - Answers -
what to make or buy, when to buy, how much to buy and how it should be ordered.
Normally, most organizational objectives can be summarized as: - Answers - survival,
growth, financial, and sustainability.
Some operational risks in a supply chain are beyond the control of the purchaser or
supplier, and some are within their control. - Answers - True
When a supply-related risk exists, the supply management team should: - Answers -
identify and classify risks, assess possible impact, develop a mitigation strategy, inform
the chief supply officer, await instructions, and implement the directive.
Which one of the following is NOT one of the six major supply strategy areas: - Answers
- new-product development strategies.
Three major challenges facing supply executives when setting supply strategies and
objectives are: - Answers - (1) What is the effective interpretation of corporate
objectives and supply objectives? (2) What is the appropriate action plan or strategy to
achieve the desired objectives? and, (3) How can supply issues be identified and
integrated into organizational objectives and strategies?
A zero defects quality strategy emphasizes: - Answers - "do it right the first time."
Supply strategies that are designed to anticipate and recognize shifts in the economy,
organization, people, legal, government regulations and controls, and technologies are:
- Answers - environmental change strategies.
Linking current and future needs with current and future markets is the primary focus of:
- Answers - an effective supply strategy.
Strategies designed to make available the knowledge and capabilities of supply chain
members to others in the buying organization are called: - Answers - supply-chain-
support strategies.
When developing strategies related to "how to buy," decisions must be made about: -
Answers - systems and processes.
,The question: "How can supply and the supply chain contribute effectively to
organizational objectives and strategy?" is a key question in: - Answers - strategic
supply management.
A strategy is: - Answers - an action plan to achieve specific long-term goals and
objectives.
Supply strategies that are based on changes in demand and supply are known as: -
Answers - assurance-of-supply strategies.
The objectives of supply are to obtain: - Answers - the right quality materials, in the right
quantity, at the right time and place, from the right source, at the right service level, and
at the right price.
A change from a decentralized supply structure to a centralized one: - Answers -
typically requires experience and skills not present in the existing structure.
Overall, the objectives of supply management focus on: - Answers - operational and
strategic issues.
Internal business partnerships between supply and other functional areas such as
marketing/sales, finance/accounting, operations and engineering are: - Answers -
desirable because of the interdependencies between and among functions.
The size and activities of the supply function in a single business unit organization will
depend on: - Answers - the size of the company and the nature of the company's
business.
High-performing cross-functional supply teams: - Answers - concentrate most of the
work at the front-end of the process.
The degree of purchasing centralization is reflected by: - Answers - the percentage of
spend managed or controlled by corporate supply.
Direct spend is: - Answers - of greater importance in manufacturing companies than in
service companies.
Hybrid supply structures can capture the benefits of both centralized and decentralized
organizational structures. - Answers - TRUE
The supply process and structure for managing indirect spend is typically different from
the process and structure for managing direct spend. - Answers - TRUE
The supply organization structure must be aligned with the corporate organization
structure. - Answers - TRUE
,A centralized supply structure is designed to: - Answers - increase the strategic focus of
purchasing and supply management.
Supply can provide an uninterrupted flow of materials, supplies and services by: -
Answers - holding large inventories and standardizing capital equipment, materials,
MRO and services.
The ratio of purchased material and services costs compared to total costs or total
income has a major influence on: - Answers - supply's reporting level in the
organization.
Research has found that supply management does not play an important role in
mergers, acquisitions, and divestitures. - Answers - FALSE
Pareto analysis usually reveals that 70-80 percent of transactions account for 10-15
percent of spend. - Answers - true
Blanket purchase orders: - Answers - reduce costs by decreasing the number of
purchase orders issued.
Application software for the procurement process is available: - Answers - from an ERP
system, a systems developer, or a cloud solution.
Small dollar value purchase orders for MRO can be efficiently and effectively managed
by: - Answers - implementing a vendor- or supplier-managed inventory system.
Traveling requisitions are used for: - Answers - recurring requirements and standard
parts.
Radio frequency identification (RFID) will: - Answers - eliminate bar coding and manual
counting.
Invoice clearance and payment procedures: - Answers - may be streamlined with an
invoiceless system within an e-procurement system.
Online reverse auctions have been most effective when: - Answers - technological,
logistical and commercial specifications are clear.
Corporate purchasing cards are issued to: - Answers - internal customers to purchase
low-dollar, high-volume goods and services.
Electronic data interchange (EDI) provides: - Answers - secure transmission, greater
accuracy and shorter process cycle time for all data.
, The three options for soliciting business from potential suppliers are: - Answers -
request for quotation (RFQ), request for proposal (RFP) and request or invitation for bid
(RFB or IFB).
Information systems technology can: - Answers - increase data accuracy and
accessibility at lower cost.
The greatest opportunity to affect value in the purchasing process is when: - Answers -
needs are recognized and described.
If the buyer does not have a clear and unambiguous description or specification and
wants to find out which supplier can deliver the best value when and where needed, he
or she will typically issue a: - Answers - request for proposal (RFP).
Making the procure-to-pay (P2P) process as seamless as possible can: - Answers -
reduce order cycle times and improve satisfaction of internal customers and suppliers.
Noncore competencies of an organization are typically: - Answers - the first things to be
outsourced to access supplier expertise.
Privatization is: - Answers - the term for outsourcing used in the public sector.
Outsourcing is: - Answers - a high risk venture because the costs of reversing the
decision are often high.
When a team decides that a task or function currently performed by company
employees is a noncore competency, the team is likely to recommend: - Answers -
outsourcing.
In the outsourcing decisions in many organizations, supply has had: - Answers -
relatively moderate involvement.
The type(s) of procurement outsourcing contracts include: - Answers - procure-to-pay
(P2P), source-to-contract (S2C) and source-to-pay (S2P).
One of the most fundamental and critical decisions in any organization is, should we: -
Answers - make or buy the needed good or service?
The increase in outsourcing has resulted in an increase in the percentage of revenue
paid out to suppliers. - Answers - true
Some of the reasons an organization may decide to make rather than buy are: greater
supply assurance, stringent quality requirements, and very small quantity requirements.
- Answers - true
ACCURATE ANSWERS
The key decisions and plans in corporate strategy address: What business are we in
and how will we allocate resources among these businesses? - Answers - True
When developing supply strategies, the supply manager must determine: - Answers -
what to make or buy, when to buy, how much to buy and how it should be ordered.
Normally, most organizational objectives can be summarized as: - Answers - survival,
growth, financial, and sustainability.
Some operational risks in a supply chain are beyond the control of the purchaser or
supplier, and some are within their control. - Answers - True
When a supply-related risk exists, the supply management team should: - Answers -
identify and classify risks, assess possible impact, develop a mitigation strategy, inform
the chief supply officer, await instructions, and implement the directive.
Which one of the following is NOT one of the six major supply strategy areas: - Answers
- new-product development strategies.
Three major challenges facing supply executives when setting supply strategies and
objectives are: - Answers - (1) What is the effective interpretation of corporate
objectives and supply objectives? (2) What is the appropriate action plan or strategy to
achieve the desired objectives? and, (3) How can supply issues be identified and
integrated into organizational objectives and strategies?
A zero defects quality strategy emphasizes: - Answers - "do it right the first time."
Supply strategies that are designed to anticipate and recognize shifts in the economy,
organization, people, legal, government regulations and controls, and technologies are:
- Answers - environmental change strategies.
Linking current and future needs with current and future markets is the primary focus of:
- Answers - an effective supply strategy.
Strategies designed to make available the knowledge and capabilities of supply chain
members to others in the buying organization are called: - Answers - supply-chain-
support strategies.
When developing strategies related to "how to buy," decisions must be made about: -
Answers - systems and processes.
,The question: "How can supply and the supply chain contribute effectively to
organizational objectives and strategy?" is a key question in: - Answers - strategic
supply management.
A strategy is: - Answers - an action plan to achieve specific long-term goals and
objectives.
Supply strategies that are based on changes in demand and supply are known as: -
Answers - assurance-of-supply strategies.
The objectives of supply are to obtain: - Answers - the right quality materials, in the right
quantity, at the right time and place, from the right source, at the right service level, and
at the right price.
A change from a decentralized supply structure to a centralized one: - Answers -
typically requires experience and skills not present in the existing structure.
Overall, the objectives of supply management focus on: - Answers - operational and
strategic issues.
Internal business partnerships between supply and other functional areas such as
marketing/sales, finance/accounting, operations and engineering are: - Answers -
desirable because of the interdependencies between and among functions.
The size and activities of the supply function in a single business unit organization will
depend on: - Answers - the size of the company and the nature of the company's
business.
High-performing cross-functional supply teams: - Answers - concentrate most of the
work at the front-end of the process.
The degree of purchasing centralization is reflected by: - Answers - the percentage of
spend managed or controlled by corporate supply.
Direct spend is: - Answers - of greater importance in manufacturing companies than in
service companies.
Hybrid supply structures can capture the benefits of both centralized and decentralized
organizational structures. - Answers - TRUE
The supply process and structure for managing indirect spend is typically different from
the process and structure for managing direct spend. - Answers - TRUE
The supply organization structure must be aligned with the corporate organization
structure. - Answers - TRUE
,A centralized supply structure is designed to: - Answers - increase the strategic focus of
purchasing and supply management.
Supply can provide an uninterrupted flow of materials, supplies and services by: -
Answers - holding large inventories and standardizing capital equipment, materials,
MRO and services.
The ratio of purchased material and services costs compared to total costs or total
income has a major influence on: - Answers - supply's reporting level in the
organization.
Research has found that supply management does not play an important role in
mergers, acquisitions, and divestitures. - Answers - FALSE
Pareto analysis usually reveals that 70-80 percent of transactions account for 10-15
percent of spend. - Answers - true
Blanket purchase orders: - Answers - reduce costs by decreasing the number of
purchase orders issued.
Application software for the procurement process is available: - Answers - from an ERP
system, a systems developer, or a cloud solution.
Small dollar value purchase orders for MRO can be efficiently and effectively managed
by: - Answers - implementing a vendor- or supplier-managed inventory system.
Traveling requisitions are used for: - Answers - recurring requirements and standard
parts.
Radio frequency identification (RFID) will: - Answers - eliminate bar coding and manual
counting.
Invoice clearance and payment procedures: - Answers - may be streamlined with an
invoiceless system within an e-procurement system.
Online reverse auctions have been most effective when: - Answers - technological,
logistical and commercial specifications are clear.
Corporate purchasing cards are issued to: - Answers - internal customers to purchase
low-dollar, high-volume goods and services.
Electronic data interchange (EDI) provides: - Answers - secure transmission, greater
accuracy and shorter process cycle time for all data.
, The three options for soliciting business from potential suppliers are: - Answers -
request for quotation (RFQ), request for proposal (RFP) and request or invitation for bid
(RFB or IFB).
Information systems technology can: - Answers - increase data accuracy and
accessibility at lower cost.
The greatest opportunity to affect value in the purchasing process is when: - Answers -
needs are recognized and described.
If the buyer does not have a clear and unambiguous description or specification and
wants to find out which supplier can deliver the best value when and where needed, he
or she will typically issue a: - Answers - request for proposal (RFP).
Making the procure-to-pay (P2P) process as seamless as possible can: - Answers -
reduce order cycle times and improve satisfaction of internal customers and suppliers.
Noncore competencies of an organization are typically: - Answers - the first things to be
outsourced to access supplier expertise.
Privatization is: - Answers - the term for outsourcing used in the public sector.
Outsourcing is: - Answers - a high risk venture because the costs of reversing the
decision are often high.
When a team decides that a task or function currently performed by company
employees is a noncore competency, the team is likely to recommend: - Answers -
outsourcing.
In the outsourcing decisions in many organizations, supply has had: - Answers -
relatively moderate involvement.
The type(s) of procurement outsourcing contracts include: - Answers - procure-to-pay
(P2P), source-to-contract (S2C) and source-to-pay (S2P).
One of the most fundamental and critical decisions in any organization is, should we: -
Answers - make or buy the needed good or service?
The increase in outsourcing has resulted in an increase in the percentage of revenue
paid out to suppliers. - Answers - true
Some of the reasons an organization may decide to make rather than buy are: greater
supply assurance, stringent quality requirements, and very small quantity requirements.
- Answers - true
