Test Bank For
Purchasing and Supply Chain Management 8e Robert B. Handfield, Larry C. Giunipero, Robert M. Monczka, James L.
Patterson
Chapter 1-20
Chapter 1
1. If a firm can’t easily raise the price of its products , maintaining long-term profits requires actively managing costs.
a. True
b. False
2. For most US firms, offshoring is the most reliable source of manufactured components which consistently meet high
quality standards.
a. True
b. False
3. Today’s emphasis on supplier quality has focused on preventing defects early in the materials-sourcing process rather
than detecting defects at the time of receipt.
a. True
b. False
4. Today’s customers are very resistant to price increases and, in fact, often demand discounts.
a. True
b. False
5. Supply chain software can be grouped into two general categories: planning and execution.
a. True
b. False
6. A firm’s supply chain is only as strong as its least-competitive supplier.
a. True
b. False
7. On average, in the manufacturing sector, more than half of every sales revenue dollar goes back to suppliers.
a. True
b. False
8. Supply chain management rarely requires coordination of activities that extend across organizational boundaries.
a. True
b. False
9. Well-trained, highly-skilled employees are essential for any company’s success.
a. True
b. False
10. During the Quiet Years (1947-Mid-1960s) of purchasing and supply chain management evolution, firms faced stable
competition and had access to abundant material. These conditions diminished the overall importance of purchasing.
a. True
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, b. False
11. Supply management involves activities not found in traditional purchasing.
a. True
b. False
12. Strategic purchasing practices are essential for helping companies maintain their competitive positions in rapidly
changing business environments.
a. True
b. False
13. Few of the product features that become part of a firm’s final products originate with suppliers.
a. True
b. False
14. Today’s consumers are used to enjoying variety of product offerings, low prices, and customized services.
a. True
b. False
15. The traditional approach to purchasing and supply management is to build relationships with suppliers and work
jointly to reduce costs and improve quality.
a. True
b. False
16. The increase in volatility, uncertainty, complexity, and ambiguity associated with long supply chains has led to an
interest in reshoring and nearshoring.
a. True
b. False
17. One of purchasing’s responsibilities is sourcing indirect goods and services required by internal groups.
a. True
b. False
18. According to Michael Porter, a firm’s value chain is composed of primary and support activities that, when configured
properly, can lead to competitive advantage.
a. True
b. False
19. The routine ordering and follow-up of basic operational supplies is a strategic responsibility.
a. True
b. False
20. D A distribution manager would be responsible for addressing product damage that occurred in handling materials at
the receiving dock.
a. True
b. False
21. Purchasing and supply management have a major impact on product and service quality.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 2
, b. False
22. There are a definitive and prescriptive set of supply chain measures that provide one best way to measure supply chain
performance.
a. True
b. False
23. The formal organization chart portrays the entirety of the workings of an organization.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
24. For which of the of the following indices does a rating over 50 indicate economic expansion?
a. Consumer Price Index
b. Producer Price Index
c. Inflation Rate
d. Purchasing Manager’s Index
25. All of the following are key knowledge areas for purchasers EXCEPT.
a. Supplier relationship management
b. Data and analytics
c. Production quality control
d. Total cost analysis
26. Which of the following involves generating the materials release, contacting a supplier directly concerning charges,
and monitoring the status of inbound shipments?
a. Order processing
b. Material control
c. Logistics planning
d. Customer service
27. Which of the following functional groups is responsible for managing the downstream movement of materials
between locations in the supply chain?
a. Purchasing Managers
b. Inventory managers
c. Distribution managers
d. Purchasing managers
28. Which of the following resources is LEAST likely to be shared between a buyer and supplier?
a. Dedicated capacity
b. Information
c. Technology
d. Skilled labor force
29. All of the following are examples of technology impacting supply chain management over the past two decades
EXCEPT
a. social media that allows buyers to gain knowledge of a seller’s personal preferences.
Copyright Cengage Learning. Powered by Cognero. Page 3
, b. cloud based data storage systems providing access to timely data.
c. artificial intelligence (AI) that provides purchasers with trainable digital assistants.
d. simulation software that increases the effectiveness of job safety training.
30. Which of the following activities involves physically getting a product ready for distribution to the customer?
a. Material control
b. Quality control
c. Shipping
d. Scheduling
31. An item provided by suppliers and used directly during production or service delivery is known as _____.
a. a direct material
b. an indirect material
c. an indirect service
d. an internal material
e. a managed inventory
32. Which of the following is the process of taking demand data and developing a supply, production, and logistics
network capable of satisfying demand requirements?
a. Quality control
b. Supply planning
c. Material control
d. Customer service
33. Which of the following is NOT a functional activity performed by purchasing practitioners?
a. Identify suppliers
b. Perform supply market research
c. Writing quality specifications
d. Establish supplier contracts
34. Which of the following refers to the formal process of assessing and selecting the structure and formal system of
communication, division of labor, coordination, control, authority, and responsibility required to achieve organizational
goals and objectives?
a. Supply chain orientation
b. Human resource management
c. Demand planning
d. Organizational design
35. Which of the following is an example of a purchased direct item for a manufacturing firm?
a. Raw materials
b. Executive travel
c. Janitorial supplies
d. Advertising and media
36. Which of the following organizations is, according to the Institute for Supply Management, responsible for the
identification, acquisition, access, positioning, and management of resources an organization needs to attain its strategic
objective?
a. Supply management
Copyright Cengage Learning. Powered by Cognero. Page 4
, b. Procurement
c. Logistics
d. Distribution
37. Which of the following is NOT a typical process involved in supply chain management?
a. Customer-order fulfillment
b. Supplier evaluation and selection
c. Demand and supply planning
d. Cash flow management
38. Which of the following is an example of a purchased indirect item for a manufacturing firm?
a. Parts and components
b. Employee healthcare contracts
c. Raw materials
d. Sub-assemblies
39. Which of the following states that success requires effectively managing the linked group of firms from first-level
suppliers to customers.?
a. Supply chain orientation
b. Value chain orientation
c. Traditional purchasing perspective
d. Extended enterprise concept
40. All of the following information technology (IT) innovations directly support end-to-end supply chains EXCEPT___
a. cloud-based data storage systems
b. mobile devices permitting Zooming for virtual meetings
c. machine learning (ML) automation of routine buying functions
d. statistical process control increasing the product quality and reliability
41. Supply management strives to avoid which types of relationships between buying companies and specialty suppliers?
a. Collaborative
b. Adversarial
c. Integrated
d. Responsive
42. During which period in the evolution of purchasing and supply chain management was the practice of combining
related functions such as purchasing, inventory control, receiving, and stores under the authority of one individual in a
firm?
a. Period 2 (1900-1939)
b. Period 3 (1940-1946)
c. Period 4 (1947-mid 1960s)
d. Period 5 (mid 1960s – late 1970s)
43. Which of the following activities is part of the purchasing professional’s historical role?
a. Sending requests for competitive bids to suppliers
b. Awarding long-term contracts to world-class suppliers
c. Meeting corporate wide performance measures
Copyright Cengage Learning. Powered by Cognero. Page 5
, d. Facilitating collaboration with key suppliers
44. Which of the following is a factor driving increased emphasis on supply chain management?
a. Increased domestic sourcing to obtain lower prices
b. The high cost and lack of available information resources among supply chain entities.
c. The elevated level of competition in both domestic and international markets that favors fast, agile, and
flexible organizations.
d. Less demanding customer expectations.
45. Which of the following is an example of a demand planning activity?
a. Forecasts of anticipated sales
b. Cash flow JIT inventory
c. Completed and delivered orders
d. Reaction to changing customer expectations
46. According to Michael Porter, which of the following is composed of a firm’s primary and secondary activities that can
lead to competitive advantage when configured properly?
a. A supply chain
b. A production process
c. A value chain
d. A marketing channel
47. Which period in the evolution of purchasing and supply chain management saw the development of basic purchasing
procedures and ideas?
a. Period 1 (1850-1900)
b. Period 2 (1900-1939)
c. Period 3 (1940-1946)
d. Period 4 (1947-mid 1960s)
48. All of the following are roadblocks between measurement and improved performance EXCEPT _____.
a. relevant performance metrics
b. debate over correct metrics
c. constantly changing metrics
d. retention of old data
49. Which of the following is a feature of the new model of progressive purchasing?
a. Restricting supplier communication to negotiation of contract deliverables.
b. Opting for short-term contracts over long-term contracts whenever possible.
c. Focusing primarily on price optimization for essential purchased products
d. Conducting worldwide Internet searches for the best sources of supply.
50. Which of the following is an event likely to contribute supply management volatility, uncertainty, complexity, or
ambiguity (VUCA)?
a. Historically stable prices for goods and services
b. Abundant raw materials
c. Stable political climate
d. Prevalence of counterfeit goods
Copyright Cengage Learning. Powered by Cognero. Page 6
Purchasing and Supply Chain Management 8e Robert B. Handfield, Larry C. Giunipero, Robert M. Monczka, James L.
Patterson
Chapter 1-20
Chapter 1
1. If a firm can’t easily raise the price of its products , maintaining long-term profits requires actively managing costs.
a. True
b. False
2. For most US firms, offshoring is the most reliable source of manufactured components which consistently meet high
quality standards.
a. True
b. False
3. Today’s emphasis on supplier quality has focused on preventing defects early in the materials-sourcing process rather
than detecting defects at the time of receipt.
a. True
b. False
4. Today’s customers are very resistant to price increases and, in fact, often demand discounts.
a. True
b. False
5. Supply chain software can be grouped into two general categories: planning and execution.
a. True
b. False
6. A firm’s supply chain is only as strong as its least-competitive supplier.
a. True
b. False
7. On average, in the manufacturing sector, more than half of every sales revenue dollar goes back to suppliers.
a. True
b. False
8. Supply chain management rarely requires coordination of activities that extend across organizational boundaries.
a. True
b. False
9. Well-trained, highly-skilled employees are essential for any company’s success.
a. True
b. False
10. During the Quiet Years (1947-Mid-1960s) of purchasing and supply chain management evolution, firms faced stable
competition and had access to abundant material. These conditions diminished the overall importance of purchasing.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1
, b. False
11. Supply management involves activities not found in traditional purchasing.
a. True
b. False
12. Strategic purchasing practices are essential for helping companies maintain their competitive positions in rapidly
changing business environments.
a. True
b. False
13. Few of the product features that become part of a firm’s final products originate with suppliers.
a. True
b. False
14. Today’s consumers are used to enjoying variety of product offerings, low prices, and customized services.
a. True
b. False
15. The traditional approach to purchasing and supply management is to build relationships with suppliers and work
jointly to reduce costs and improve quality.
a. True
b. False
16. The increase in volatility, uncertainty, complexity, and ambiguity associated with long supply chains has led to an
interest in reshoring and nearshoring.
a. True
b. False
17. One of purchasing’s responsibilities is sourcing indirect goods and services required by internal groups.
a. True
b. False
18. According to Michael Porter, a firm’s value chain is composed of primary and support activities that, when configured
properly, can lead to competitive advantage.
a. True
b. False
19. The routine ordering and follow-up of basic operational supplies is a strategic responsibility.
a. True
b. False
20. D A distribution manager would be responsible for addressing product damage that occurred in handling materials at
the receiving dock.
a. True
b. False
21. Purchasing and supply management have a major impact on product and service quality.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 2
, b. False
22. There are a definitive and prescriptive set of supply chain measures that provide one best way to measure supply chain
performance.
a. True
b. False
23. The formal organization chart portrays the entirety of the workings of an organization.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
24. For which of the of the following indices does a rating over 50 indicate economic expansion?
a. Consumer Price Index
b. Producer Price Index
c. Inflation Rate
d. Purchasing Manager’s Index
25. All of the following are key knowledge areas for purchasers EXCEPT.
a. Supplier relationship management
b. Data and analytics
c. Production quality control
d. Total cost analysis
26. Which of the following involves generating the materials release, contacting a supplier directly concerning charges,
and monitoring the status of inbound shipments?
a. Order processing
b. Material control
c. Logistics planning
d. Customer service
27. Which of the following functional groups is responsible for managing the downstream movement of materials
between locations in the supply chain?
a. Purchasing Managers
b. Inventory managers
c. Distribution managers
d. Purchasing managers
28. Which of the following resources is LEAST likely to be shared between a buyer and supplier?
a. Dedicated capacity
b. Information
c. Technology
d. Skilled labor force
29. All of the following are examples of technology impacting supply chain management over the past two decades
EXCEPT
a. social media that allows buyers to gain knowledge of a seller’s personal preferences.
Copyright Cengage Learning. Powered by Cognero. Page 3
, b. cloud based data storage systems providing access to timely data.
c. artificial intelligence (AI) that provides purchasers with trainable digital assistants.
d. simulation software that increases the effectiveness of job safety training.
30. Which of the following activities involves physically getting a product ready for distribution to the customer?
a. Material control
b. Quality control
c. Shipping
d. Scheduling
31. An item provided by suppliers and used directly during production or service delivery is known as _____.
a. a direct material
b. an indirect material
c. an indirect service
d. an internal material
e. a managed inventory
32. Which of the following is the process of taking demand data and developing a supply, production, and logistics
network capable of satisfying demand requirements?
a. Quality control
b. Supply planning
c. Material control
d. Customer service
33. Which of the following is NOT a functional activity performed by purchasing practitioners?
a. Identify suppliers
b. Perform supply market research
c. Writing quality specifications
d. Establish supplier contracts
34. Which of the following refers to the formal process of assessing and selecting the structure and formal system of
communication, division of labor, coordination, control, authority, and responsibility required to achieve organizational
goals and objectives?
a. Supply chain orientation
b. Human resource management
c. Demand planning
d. Organizational design
35. Which of the following is an example of a purchased direct item for a manufacturing firm?
a. Raw materials
b. Executive travel
c. Janitorial supplies
d. Advertising and media
36. Which of the following organizations is, according to the Institute for Supply Management, responsible for the
identification, acquisition, access, positioning, and management of resources an organization needs to attain its strategic
objective?
a. Supply management
Copyright Cengage Learning. Powered by Cognero. Page 4
, b. Procurement
c. Logistics
d. Distribution
37. Which of the following is NOT a typical process involved in supply chain management?
a. Customer-order fulfillment
b. Supplier evaluation and selection
c. Demand and supply planning
d. Cash flow management
38. Which of the following is an example of a purchased indirect item for a manufacturing firm?
a. Parts and components
b. Employee healthcare contracts
c. Raw materials
d. Sub-assemblies
39. Which of the following states that success requires effectively managing the linked group of firms from first-level
suppliers to customers.?
a. Supply chain orientation
b. Value chain orientation
c. Traditional purchasing perspective
d. Extended enterprise concept
40. All of the following information technology (IT) innovations directly support end-to-end supply chains EXCEPT___
a. cloud-based data storage systems
b. mobile devices permitting Zooming for virtual meetings
c. machine learning (ML) automation of routine buying functions
d. statistical process control increasing the product quality and reliability
41. Supply management strives to avoid which types of relationships between buying companies and specialty suppliers?
a. Collaborative
b. Adversarial
c. Integrated
d. Responsive
42. During which period in the evolution of purchasing and supply chain management was the practice of combining
related functions such as purchasing, inventory control, receiving, and stores under the authority of one individual in a
firm?
a. Period 2 (1900-1939)
b. Period 3 (1940-1946)
c. Period 4 (1947-mid 1960s)
d. Period 5 (mid 1960s – late 1970s)
43. Which of the following activities is part of the purchasing professional’s historical role?
a. Sending requests for competitive bids to suppliers
b. Awarding long-term contracts to world-class suppliers
c. Meeting corporate wide performance measures
Copyright Cengage Learning. Powered by Cognero. Page 5
, d. Facilitating collaboration with key suppliers
44. Which of the following is a factor driving increased emphasis on supply chain management?
a. Increased domestic sourcing to obtain lower prices
b. The high cost and lack of available information resources among supply chain entities.
c. The elevated level of competition in both domestic and international markets that favors fast, agile, and
flexible organizations.
d. Less demanding customer expectations.
45. Which of the following is an example of a demand planning activity?
a. Forecasts of anticipated sales
b. Cash flow JIT inventory
c. Completed and delivered orders
d. Reaction to changing customer expectations
46. According to Michael Porter, which of the following is composed of a firm’s primary and secondary activities that can
lead to competitive advantage when configured properly?
a. A supply chain
b. A production process
c. A value chain
d. A marketing channel
47. Which period in the evolution of purchasing and supply chain management saw the development of basic purchasing
procedures and ideas?
a. Period 1 (1850-1900)
b. Period 2 (1900-1939)
c. Period 3 (1940-1946)
d. Period 4 (1947-mid 1960s)
48. All of the following are roadblocks between measurement and improved performance EXCEPT _____.
a. relevant performance metrics
b. debate over correct metrics
c. constantly changing metrics
d. retention of old data
49. Which of the following is a feature of the new model of progressive purchasing?
a. Restricting supplier communication to negotiation of contract deliverables.
b. Opting for short-term contracts over long-term contracts whenever possible.
c. Focusing primarily on price optimization for essential purchased products
d. Conducting worldwide Internet searches for the best sources of supply.
50. Which of the following is an event likely to contribute supply management volatility, uncertainty, complexity, or
ambiguity (VUCA)?
a. Historically stable prices for goods and services
b. Abundant raw materials
c. Stable political climate
d. Prevalence of counterfeit goods
Copyright Cengage Learning. Powered by Cognero. Page 6
