Principles of Supply Chain Management A Balanced Approach
Chapter 2 - Purchasing Management
True / False
1. Purchasing can be broadly classified into two categories: merchants and industrial buyers.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-1
2. The acquisition of services is also known as contracting.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-1
3. The term Supply Management is used to describe responsibilities above and beyond those of traditional purchasing.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Comprehension
OTHER: Analytic
NOTES: 2-2
4. Key activities of supply management include negotiations, logistics, contract development and administration,
inventory control and management, and supplier management.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-2
,Industrial supply chain member buyers purchase their merchandise in volume to take advantage of quantity discounts,
transportation economy, and storage efficiency, and then they create value through services like consolidating merchandise or
break bulking.
True
a.
False
b.
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Comprehension
OTHER: Analytic
NOTES: 2-1
5. The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the
purchasing personnel, and the suppliers.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-2
6. The purchase order is NOTa legally binding contract until it is accepted by the supplier.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-2
7. According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during
manufacturing.
True
a.
False
b.
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Comprehension
OTHER: Analytic
NOTES: 2-2
8. The goal of a proper purchasing system is to ensure the efficient transmission of information from the users to the
purchasing personnel, and ultimately, to the suppliers.
, True
a.
9.
False
a.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-2
10. A follow-up is considered a reactive approach to speed up an overdue shipment.
True
a.
False
b.
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-2
11. Generally, firms outsource noncore activities while focusing on core competencies.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Comprehension
OTHER: Analytic
NOTES: 2-4
12. Procurement credit cards can be used for small purchases excluding meals, lodging, and travel expenses.
True
a.
False
b.
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom’s: Knowledge
OTHER: Analytic
NOTES: 2-3
13. Blank check purchase orders, Corporate purchasing cards, Petty cash, and Open-end purchase orders are all possible
alternatives to dealing with small value purchases such as those for office supplies.
True
a.
False
b.
ANSWER: True
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