Question 1

Capital equipment purchasing involves buying assets intended for use less than one year.

Accepted Answer

Capital equipment purchasing involves buying assets intended for use more than one year.

Question 2

The way that MRO items are typically dispersed throughout an organization makes monitoring MRO inventory relatively simple.

Accepted Answer

MRO items are often dispersed throughout an organization in multiple storage locations or departments, making it more difficult to monitor inventory levels accurately. It requires more effort to track and manage MRO inventory effectively.

Question 3

In a practice known as ____,internal users may try to negotiate contracts themselves.
A) strategic sourcing
B) spend management
C) backdoor buying
D) outsourcing
E) internal sourcing

Accepted Answer

Backdoor buying refers to internal users trying to negotiate contracts themselves without involving the procurement department or going through the regular procurement process. This can lead to non-compliant purchasing and increased risks for the organization.

Question 4

____ is the process of collecting historical data by commodity,relative to demand from lines of business,with the exception of personnel expenses,occupancy,and corporate spend.
A) Demand management
B) Supply analysis
C) Category management
D) Contract management
E) Spend analysis

Accepted Answer

This process is known as spend analysis, which involves collecting and analyzing data on the spending of an organization. This includes historical data on commodities and demand, excluding personnel expenses, occupancy, and corporate spend. Demand management, supply analysis, category management, and contract management all refer to different processes in the procurement and supply chain management fields, but do not specifically involve collecting data on spending in this way.

Question 5

The buyer may assume that the purchasing cycle ends with the receipt of an ordered item or the selection of a supplier.

Accepted Answer

The purchasing cycle typically includes additional steps after receiving an item, such as inspection, payment, and evaluation of the supplier's performance.

Question 6

Which of the following is not one of the objectives in developing supply base management.
A) Selecting suppliers that are competitive.
B) Identifying new suppliers that have the potential for excellent performance and developing closer relationships with these suppliers.
C) Improving existing suppliers.
D) Developing new suppliers that are not competitive.
E) Ensuring timely and accurate payment of supplier invoices.

Accepted Answer

The answer of Which of the following is not one...

Question 7

Effective supply market intelligence involves all of the following except ____.
A) monitoring supply markets and trends
B) ensuring that purchasing does not exceed its annual budget
C) identifying critical materials and services
D) developing supply options and contingency plans
E) supporting the organization's need for a diverse and globally competitive supply base

Accepted Answer

Ensuring that purchasing does not exceed its annual budget is not related to effective supply market intelligence. The other options are all important components of effective supply market intelligence.

Question 8

____ is a situation that occurs when sellers contact and attempt to sell directly to end users (purchasing's internal customers).
A) Insourcing
B) Bidding
C) Maverick buying and selling
D) Direct sourcing
E) Outsourcing

Accepted Answer

Maverick buying and selling is a situation that occurs when individual employees or departments in an organization bypass the procurement process and purchase goods or services directly from a supplier. This behavior can lead to higher costs, lack of control, and potential risks for the organization.

Question 9

All of the following are objectives of a world-class purchasing organization except ____.
A) ensure that all hard copies of purchase orders and other paper documents are filed correctly in a secure area
B) develop integrated purchasing strategies that support organizational goals and objectives
C) manage the sourcing process efficiently and effectively
D) develop supply base management
E) supply continuity

Accepted Answer

Ensuring that all hard copies of purchase orders and other paper documents are filed correctly in a secure area is not an objective of a world-class purchasing organization. While document management is important, it is not an overarching objective of the function. The other options listed are all key objectives of a world-class purchasing organization.

Question 10

It is common and preferred practice for suppliers to arrange shipment to a purchaser and simply include the transportation cost as part of the purchase cost.

Accepted Answer

It is not always common or preferred for suppliers to arrange shipment and include transportation costs in the purchase cost, as this depends on the terms agreed upon between the supplier and purchaser. Some purchasers prefer to handle shipping themselves to control costs and logistics.

Question 11

Historically,most organizations have paid minimal attention to MRO items.

Accepted Answer

Historically, MRO items were often seen as low value items and received minimal attention from organizations.

Question 12

____ is the process of developing external industry intelligence and analysis,internal demand,supply base capabilities and operational risks,and a strategy to approach that marketplace with the organization's needs to match it with what suppliers can offer.
A) Spend analysis
B) Cost management
C) Contract management
D) Category management
E) Procure-to-pay

Accepted Answer

The process described in the question is category management, which involves analyzing the organization's needs and the marketplace, and developing strategies to match those needs with what suppliers can offer. Spend analysis, cost management, contract management, and procure-to-pay are all important parts of procurement and supply chain management, but they do not encompass the full range of activities involved in category management.

Question 13

The dollar value of the items covered by procurement cards is relatively high.

Accepted Answer

The answer of The dollar value of the items covered...

Question 14

____ involves a process of unbundling the price paid and other components of price over the life cycle of a product or service,to deliver a target cost and a unit rate to determine if it is priced competitively in the marketplace.
A) Cost management
B) Procure-to-pay
C) Supplier relationship management
D) Category management
E) Spend management

Accepted Answer

Cost management involves the process of managing the costs associated with a product or service, including unbundling the price and analyzing each component to determine a target cost and unit rate. This helps to ensure that the product or service is priced competitively in the marketplace. Procure-to-pay, supplier relationship management, category management, and spend management are all related to procurement and supply chain management but do not specifically address the process of unbundling price components.

Question 15

One of the most important objectives of the purchasing function involves the selection,development,and maintenance of supply and is sometimes described as ____.
A) supply base management
B) maverick spend
C) customer service
D) procure-to-pay
E) backdoor buying

Accepted Answer

Supply base management involves selecting, developing, and maintaining sources of supply for a company. This is a key objective of the purchasing function because it directly affects the quality of materials and services that the company receives, as well as the cost and delivery terms negotiated with suppliers. Maverick spend refers to unauthorized purchases made by employees outside of established procurement processes, customer service relates more to the delivery of goods and services to customers, procure-to-pay involves the end-to-end process of purchasing and paying for goods and services, and backdoor buying refers to unauthorized purchases made through alternative, non-standard channels.

Question 16

____ is the process of using rate and unit consumption levels to forecast and estimate future consumption in an internal functional customer and providing guidance and input on how to optimize usage and educating the user on the tradeoffs.
A) Specification management
B) Demand management
C) Category management
D) Supply market intelligence
E) Cost management

Accepted Answer

The given process is describing the process of demand management, which involves forecasting future consumption and educating users on how to optimize usage. Specification management involves managing the quality and specifications of purchased goods, category management involves managing a specific category of spend, supply market intelligence involves gathering information on suppliers and market trends, and cost management involves managing and reducing costs.

Question 17

Most companies spend too much time and too many resources managing the ordering of goods and services,particularly lower-value items.

Accepted Answer

Research and studies have shown that companies tend to spend a disproportionate amount of time and resources on managing the procurement of lower-value items, which can lead to inefficiencies and higher costs.

Question 18

Managing the purchase of a semifinished component is not a critical purchasing responsibility because components rarely affect product quality and cost.

Accepted Answer

Managing the purchase of a semifinished component is a critical purchasing responsibility because the quality and cost of the final product can be significantly influenced by the quality and cost of the semifinished component.

Question 19

____ is the end-to-end process of managing a supplier through the entire sourcing life cycle.
A) P2P
B) CRM
C) Outsourcing
D) Negotiation
E) SRM

Accepted Answer

SRM (Supplier Relationship Management) is the process that involves the end-to-end management of a supplier, including the management of relationships, performance, contracts, and risk through the entire sourcing life cycle. P2P refers to the purchase-to-pay process, which involves the entire process of purchasing and paying for goods and services. CRM (Customer Relationship Management) is the process of managing customer interactions and relationships. Outsourcing refers to the process of hiring an external company to perform a business function. Negotiation is the process of reaching an agreement through compromise and communication between parties involved in a business deal. Therefore, E is the best answer.

Question 20

The ____ is used to identify user requirements,evaluate the user needs effectively and efficiently,identify suppliers who can meet that need,develop agreements with those suppliers,develop the ordering mechanism,ensure payment occurs promptly,ascertain that the need was effectively met,and drive continuous improvement.
A) demand management process
B) backdoor buying process
C) materials budgeting process
D) forecasting process
E) purchasing process

Accepted Answer

The purchasing process is the one that includes all the activities mentioned in the description, from identifying user requirements to ensuring continuous improvement. The other options focus on specific aspects of procurement or supply chain management, but not the entirety of the purchasing process.

Quiz 2: The Purchasing Process

Capital equipment purchasing involves buying assets intended for use less than one year.

The way that MRO items are typically dispersed throughout an organization makes monitoring MRO inventory relatively simple.

In a practice known as ____,internal users may try to negotiate contracts themselves.

____ is the process of collecting historical data by commodity,relative to demand from lines of business,with the exception of personnel expenses,occupancy,and corporate spend.

The buyer may assume that the purchasing cycle ends with the receipt of an ordered item or the selection of a supplier.

Which of the following is not one of the objectives in developing supply base management.

Effective supply market intelligence involves all of the following except ____.

____ is a situation that occurs when sellers contact and attempt to sell directly to end users (purchasing's internal customers) .

All of the following are objectives of a world-class purchasing organization except ____.

It is common and preferred practice for suppliers to arrange shipment to a purchaser and simply include the transportation cost as part of the purchase cost.

Historically,most organizations have paid minimal attention to MRO items.

____ is the process of developing external industry intelligence and analysis,internal demand,supply base capabilities and operational risks,and a strategy to approach that marketplace with the organization's needs to match it with what suppliers can offer.

The dollar value of the items covered by procurement cards is relatively high.

____ involves a process of unbundling the price paid and other components of price over the life cycle of a product or service,to deliver a target cost and a unit rate to determine if it is priced competitively in the marketplace.

One of the most important objectives of the purchasing function involves the selection,development,and maintenance of supply and is sometimes described as ____.

____ is the process of using rate and unit consumption levels to forecast and estimate future consumption in an internal functional customer and providing guidance and input on how to optimize usage and educating the user on the tradeoffs.

Most companies spend too much time and too many resources managing the ordering of goods and services,particularly lower-value items.

Managing the purchase of a semifinished component is not a critical purchasing responsibility because components rarely affect product quality and cost.

____ is the end-to-end process of managing a supplier through the entire sourcing life cycle.