Supply Chain Management, 5e (Chopra/Meindl)
Chapter 15 Sourcing Decisions in a Supply Chain
15.1 True/False Questions
1) Purchasing, also known as procurement, is the process used to rate supplier performance.
Answer: FALSE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
2) Sourcing processes include the selection of suppliers, design of supplier contracts, product
design collaboration, procurement of material, and evaluation of supplier performance.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
3) For many firms, price has traditionally been the only dimension that suppliers have been
compared on.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
4) There are many supplier characteristics other than price, such as lead time, reliability, quality,
and design capability that impact the total cost of doing business with a supplier.
Answer: TRUE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
5) A good supplier scoring and assessment process will primarily track performance along the
price dimension when evaluating a supplier.
Answer: FALSE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
15-1
, 6) Design collaboration ensures that any design changes are communicated effectively to all
parties involved with designing and manufacturing the product.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
7) The goal of procurement is to enable orders to be placed and delivered on schedule at the
lowest possible price.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
8) The role of sourcing planning and analysis is to analyze spending across various suppliers and
component categories to identify opportunities for decreasing the total cost.
Answer: TRUE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
9) Cost of Goods Sold (COGS) represents less than 20 percent of sales for most major
manufacturers.
Answer: FALSE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
10) Effective sourcing processes within a firm can improve profits for the firm and total supply
chain surplus in a variety of ways.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
15-2
Chapter 15 Sourcing Decisions in a Supply Chain
15.1 True/False Questions
1) Purchasing, also known as procurement, is the process used to rate supplier performance.
Answer: FALSE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
2) Sourcing processes include the selection of suppliers, design of supplier contracts, product
design collaboration, procurement of material, and evaluation of supplier performance.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
3) For many firms, price has traditionally been the only dimension that suppliers have been
compared on.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
4) There are many supplier characteristics other than price, such as lead time, reliability, quality,
and design capability that impact the total cost of doing business with a supplier.
Answer: TRUE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
5) A good supplier scoring and assessment process will primarily track performance along the
price dimension when evaluating a supplier.
Answer: FALSE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
15-1
, 6) Design collaboration ensures that any design changes are communicated effectively to all
parties involved with designing and manufacturing the product.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
7) The goal of procurement is to enable orders to be placed and delivered on schedule at the
lowest possible price.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
8) The role of sourcing planning and analysis is to analyze spending across various suppliers and
component categories to identify opportunities for decreasing the total cost.
Answer: TRUE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
9) Cost of Goods Sold (COGS) represents less than 20 percent of sales for most major
manufacturers.
Answer: FALSE
Diff: 1
Topic: 15.1 The Role of Sourcing in a Supply Chain
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
10) Effective sourcing processes within a firm can improve profits for the firm and total supply
chain surplus in a variety of ways.
Answer: TRUE
Diff: 2
Topic: 15.1 The Role of Sourcing in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Compare and contrast different sourcing strategies including outsourcing
and insourcing
15-2
