Operations Management Ch.6
"all of the above" - (possible higher product selling prices, higher perceived value,
increased market share, higher profitability) - ANS-The impact of sourcing materials or
services with improved quality for a firm is
"all of the above" - (procurement, purchasing, sourcing, supply management) - ANS-The
process of buying and working with suppliers is known as
"only a and c above" - (lack of qualified sources, lack of substitutes) - ANS-Which of the
following factors determine supply risk for an item?
"only b and c above" - (higher perceived value, increased market share) - ANS-The
impact of sourcing materials or services with improved quality for a firm is
"only b and c above" - (increse competition by encouraging other supplier to offer the
item, develop new suppliers) - ANS-A sourcing strategy for items in the bottleneck
quadrant will be to
$ 1.280 billion - ANS-A retailer operating a network of home improvement stores has
annual sales of $800 million, annual cost of goods and materials purchased of $500
million, and net income of $125 million. What should the new annual sales be to have the
same effect on the bottom line as a 15-percent reduction in the cost of goods and
materials purchased, other things remaining unchanged?
$2.8 million - ANS-ABC Tools has annual sales of $50 million, annual materials cost of
$28 million, and net income of $5 million. If a new purchasing agent is able to reduce the
cost of materials by 10 percent, what would be the addition to the bottom line?
$200 million - ANS-A retailer operating a network of home improvement stores has
annual sales of $800 million, annual cost of goods and materials purchased of $500
million, and net income of $125 million. If a newly implemented strategic sourcing
process is able to reduce the cost of goods and materials purchased by 15 percent, what
would be the new net profit, given that annual sales and other costs remain unchanged?
15.6% - ANS-ABC Tools has annual sales of $50 million, annual materials cost of $28
million, and net income of $5 million. What is the new profit margin with a 10-percent
reduction in the cost of materials, assuming sales remain the same?
, 25% - ANS-A retailer operating a network of home improvement stores has annual sales
of $800 million, annual cost of goods and materials purchased of $500 million, and net
income of $125 million. What is the new profit margin with a 15-percent reduction in the
cost of goods and materials purchased, assuming sales and other costs remain
unchanged?
50 to 90 - ANS-Purchased goods and services typically make up what percentage of a
firm's cost of goods sold?
56% - ANS-ABC Tools has annual sales of $50 million, annual materials cost of $28
million, and net income of $5 million. What is the required increase in sales to have the
same effect on the bottom line as a 10-percent reduction in the cost of materials?
A basic item like office supplies is a(n) ________ item. - ANS-routine
A company using a portfolio model for strategic sourcing decisions decides to simplify
the acquisition process by decentralizing the procurement activities; the products in
question most likely fall in the ________ quadrant. - ANS-routine
A company using portfolio model for strategic sourcing decisions decides to form
long-term alliances with their key suppliers; the products in question most likely fall in
the ________ quadrant. - ANS-critical
A dollar saved in the cost of materials purchased is a dollar added to the pre-tax profit. -
ANS-true
a framework for making purchasing-related decisions - ANS-With reference to strategic
sourcing, the portfolio model is
A framework for making purchasing-related strategic management decisions is known as
the ________. - ANS-portfolio model
A purchased good that can have a big effect on profitability but only has a few qualified
suppliers is a(n) ________ item. - ANS-critical
A purchased item that has many sources of supply, but has the potential to affect profit
because it is bought in high volumes is a(n) ________ item. - ANS-leverage
A purchased item with few alternate sources of supply due to complex manufacturing
process is typically a(n) ________ item. - ANS-bottleneck
A review of a firm's entire set of purchases to find what the firm is spending its money on
is called ________. - ANS-spend analysis
"all of the above" - (possible higher product selling prices, higher perceived value,
increased market share, higher profitability) - ANS-The impact of sourcing materials or
services with improved quality for a firm is
"all of the above" - (procurement, purchasing, sourcing, supply management) - ANS-The
process of buying and working with suppliers is known as
"only a and c above" - (lack of qualified sources, lack of substitutes) - ANS-Which of the
following factors determine supply risk for an item?
"only b and c above" - (higher perceived value, increased market share) - ANS-The
impact of sourcing materials or services with improved quality for a firm is
"only b and c above" - (increse competition by encouraging other supplier to offer the
item, develop new suppliers) - ANS-A sourcing strategy for items in the bottleneck
quadrant will be to
$ 1.280 billion - ANS-A retailer operating a network of home improvement stores has
annual sales of $800 million, annual cost of goods and materials purchased of $500
million, and net income of $125 million. What should the new annual sales be to have the
same effect on the bottom line as a 15-percent reduction in the cost of goods and
materials purchased, other things remaining unchanged?
$2.8 million - ANS-ABC Tools has annual sales of $50 million, annual materials cost of
$28 million, and net income of $5 million. If a new purchasing agent is able to reduce the
cost of materials by 10 percent, what would be the addition to the bottom line?
$200 million - ANS-A retailer operating a network of home improvement stores has
annual sales of $800 million, annual cost of goods and materials purchased of $500
million, and net income of $125 million. If a newly implemented strategic sourcing
process is able to reduce the cost of goods and materials purchased by 15 percent, what
would be the new net profit, given that annual sales and other costs remain unchanged?
15.6% - ANS-ABC Tools has annual sales of $50 million, annual materials cost of $28
million, and net income of $5 million. What is the new profit margin with a 10-percent
reduction in the cost of materials, assuming sales remain the same?
, 25% - ANS-A retailer operating a network of home improvement stores has annual sales
of $800 million, annual cost of goods and materials purchased of $500 million, and net
income of $125 million. What is the new profit margin with a 15-percent reduction in the
cost of goods and materials purchased, assuming sales and other costs remain
unchanged?
50 to 90 - ANS-Purchased goods and services typically make up what percentage of a
firm's cost of goods sold?
56% - ANS-ABC Tools has annual sales of $50 million, annual materials cost of $28
million, and net income of $5 million. What is the required increase in sales to have the
same effect on the bottom line as a 10-percent reduction in the cost of materials?
A basic item like office supplies is a(n) ________ item. - ANS-routine
A company using a portfolio model for strategic sourcing decisions decides to simplify
the acquisition process by decentralizing the procurement activities; the products in
question most likely fall in the ________ quadrant. - ANS-routine
A company using portfolio model for strategic sourcing decisions decides to form
long-term alliances with their key suppliers; the products in question most likely fall in
the ________ quadrant. - ANS-critical
A dollar saved in the cost of materials purchased is a dollar added to the pre-tax profit. -
ANS-true
a framework for making purchasing-related decisions - ANS-With reference to strategic
sourcing, the portfolio model is
A framework for making purchasing-related strategic management decisions is known as
the ________. - ANS-portfolio model
A purchased good that can have a big effect on profitability but only has a few qualified
suppliers is a(n) ________ item. - ANS-critical
A purchased item that has many sources of supply, but has the potential to affect profit
because it is bought in high volumes is a(n) ________ item. - ANS-leverage
A purchased item with few alternate sources of supply due to complex manufacturing
process is typically a(n) ________ item. - ANS-bottleneck
A review of a firm's entire set of purchases to find what the firm is spending its money on
is called ________. - ANS-spend analysis
