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BSN EXAM QUESTIONS WITH ANSWERS The Progression to Professional Supply Management A+
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BSN EXAM QUESTIONS WITH ANSWERS The Progression toProfessional Supply Management A+
Note to students, select the answer that is true or false “most of the time”, few situations in social
sciences are simply black or white.
1. Purchasing is primarily a clerical activity.
Answer: False
2. Supply management is also known as procurement at many firms and government agencies.
Answer: True
3. Strategic sourcing starts with the analysis of the supply market.
Answer: False
4. Materials have always been vital in the history of industrial growth.
Answer: False
5. In the history of power source relationships, percentage wise, labor costs went down while
materials costs went up.
Answer: True
6. Supply management plays a major role in improving the “bottom line” by driving sales up and
costs down.
Answer: True
7. Generally speaking, firms with the fasted time to market with new products by using
cross functional teams including suppliers, enjoy higher profits.
Answer: True
8. Some 75% of many manufacturer’s quality problems can be traced back to defects in purchased
materials.
Answer: True
9. Of the factors that make up total cost of ownership (TCO), the big majority of this cost is in
the acquisition cost.
Answer: False
,BSN EXAM QUESTIONS WITH ANSWERS The Progression to
Professional Supply Management A+
10. “Lean thinking” is primarily concerned with conversion cost.
Answer: False
11. When supply savings and increased sales due to superior supply chain management are
combined, it is not uncommon to increase ROI 50%.
Answer: True
12. The term “supply chain” means all the members are linked together in one master contract
covering a long time period.
Answer: False
13. The term “value chain” includes both the upstream and downstream portion of the supply chain.
Answer: True
14. The extended enterprise means a group of firms collaborating as a supply alliance, i.e. a strategic
network or virtual corporation.
Answer: True
15. The key role of a supply management professional is one of leadership.
Answer: True
16. The final step in the typical purchasing cycle for materials in to audit the invoice.
Answer: False
17. Supply management must be a core competency based on its impact on the bottom line.
Answer: True
18. SM requires change, driven by upper management.
Note: SM means Supply Management
Answer: True
19. World-class supply managers proactively improve supply processes.
Answer: True
20. When a group or network of firms collaborates in a partnership (alliance) fashion; the
collaboration is sometimes referred to as a strategic network, virtual corporation, or extended
enterprise.
Answer: True
,BSN EXAM QUESTIONS WITH ANSWERS The Progression to
Professional Supply Management A+
21. When the group of firms view each other as partners and collaborate effectively for the good of
the larger group, then they leave established an extended enterprise characterized by virtual
integration.
Answer: True
22. Strategic sourcing is about understanding the markets you're purchasing from inside and out and
learning from your own organization and your suppliers' organizational processes, working as a
mediator between suppliers and your organization, and capturing information and using it to
improve relationships.
Answer: True
23. Strategic sourcing requires two-way continuous improvement process work from each
organization.
Answer: True
24. Maintenance is an issue that should be considered after equipment has been purchased.
Answer: False
25. Supply management does not have much of an impact on the bottom line.
Answer: False
26. SM does not require change driven by upper management.
Answer: False
27. World-class supply managers need not improve supply processes before the processes have been
implemented.
Answer: False
28. When a group or network of firms collaborates in a partnership (alliance) fashion; the
collaboration is sometimes referred to as a tactical network.
Answer: False
29. When the group of firms view each other as partners and collaborate effectively for the good of
the larger group, then they leave established a transactional relationship.
Answer: False
30. Strategic sourcing is about dominating the markets you're purchasing from through force and
intimidation, never letting the supplier forget that you are the “boss.”
Answer: False
, BSN EXAM QUESTIONS WITH ANSWERS The Progression to
Professional Supply Management A+
31. Strategic sourcing requires one-way improvement efforts where the buying firm tells the
supplying firm what is best.
Answer: False
Multiple Choice Questions
32. The five “right objectives” of purchasing are:
A) Quality, Quantity, Price, Time, Place
B) Cost, Service, Specs, Time, Quantity
C) Place, Time, Price, Ethics, Contract
D) Agent, Supplier, Contract, Price, Quantity
E) Logistics, time, Quality, Price,
Quantity Answer: A
33. The term supply management is broader than the purchasing function because it::
A) includes marketing
B) includes operations/production
C) includes managing relationships with suppliers
D) includes negotiating enforceable contracts
E) includes measuring the total cost of ownership
Answer: C
34. Strategic sourcing differs from tactical purchasing in that this activity periodically:
A) analyzes the organization’s spend
B) analyzes the supply market
C) develops sourcing strategy and plans
D) outsources basic business services such as security
E) A, B &C
Answer: E
35. Supply management’s impact on the bottom line includes the ability to increase sales by:
A) reducing the development time of new products by using cross functional teams
including suppliers
B) obtaining the lowest possible prices
C) finding suppliers with the fastest delivery times
D) all of the above
E) none of the above
Answer: A
36. “Lean Thinking” can help reduce total cost of ownership (TCO), this means the supply team
in the entire “chain” must work to:
A) lower conversion cost
B) reduce cycle time cost
C) reduce risk cost
D) reduce non-value costs
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