Question 1

In portfolio analysis,strategic goods and service are both more valuable to the buying organization and riskier to acquire.

Accepted Answer

A) True 
 B)False

Question 2

The position of strength assessment focuses exclusively on the other party in the negotiation.

Accepted Answer

A) True 
 B)False

Question 3

An externally focused process of analyzing costs in terms of the overall supply chain is called strategic cost management.

Accepted Answer

A) True 
 B)False

Question 4

Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

Accepted Answer

A) True 
 B)False

Question 5

All negotiations have an economic as well as a psychological dimension.

Accepted Answer

A) True 
 B)False  True

Question 6

In portfolio analysis,bottleneck items are characterized by high risk and high value.

Accepted Answer

A) True 
 B)False

Question 7

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s) :

Accepted Answer

A)  standard specification or commodity-type items.
B)  switching suppliers is difficult.
C)  supplier technology is important.
D)  standard specification or commodity-type items and supplier technology is important.
E)  standard specification or commodity-type items,switching suppliers is difficult and supplier technology is important.

Question 8

In portfolio analysis,the goal when purchasing bottleneck items is to:

Accepted Answer

A)  assure quality at expected levels.
B)  reduce or eliminate customization.
C)  assure lowest total cost of ownership.
D)  minimize acquisition time and cost.
E)  minimize price per unit.

Question 9

Life cycle costing (LCC) :

Accepted Answer

A)  includes all relevant costs expected in the first three years of ownership.
B)  focuses on purchase price that is typically the highest percentage of LCC.
C)  shows the phases of product evolution from growth to maturity.
D)  may include costs that are 10-15 years in the future and highly uncertain.
E)  can be applied to all types of purchases except capital acquisitions.

Question 10

Cost management tools and techniques that may provide data for negotiations with internal organizational stakeholders and/or externally with suppliers include:

Accepted Answer

A)  activity-based costing.
B)  the learning curve.
C)  total cost of ownership.
D)  activity-based costing and total cost of ownership.
E)  activity-based costing,the learning curve and total cost of ownership.

Question 11

Purchasers can use activity-based costing to:

Accepted Answer

A)  eliminate nonvalue-adding activities.
B)  reduce activity occurrences.
C)  reduce the cost driver rate.
D)  eliminate nonvalue-adding activities and reduce the cost driver rate.
E)  eliminate nonvalue-adding activities,reduce activity occurrences and reduce the cost driver rate.

Question 12

After identifying and implementing supply cost savings,the supply manager should:

Accepted Answer

A)  validate the savings with finance/accounting.
B)  evaluate potential implications for changes to the budget.
C)  notify the budget holder so he or she can use the savings for other expenses or projects.
D)  validate the savings with finance/accounting and evaluate potential implications for changes to the budget.
E)  validate the savings with finance/accounting,evaluate potential implications for changes to the budget and notify the budget holder so he or she can use the savings for other expenses or projects.

Question 13

Value engineering (VE)and value analysis (VA)use the same methods,but VA is performed in the design stage and VE is performed in the redesign stage.

Accepted Answer

A) True 
 B)False

Question 14

Target costing starts with:

Accepted Answer

A)  the selling price of an organization's end product minus the operating profit to establish the target cost.
B)  the supplier's price,and works to determine the selling price of the buying organization's end product or service.
C)  the supplier's price,and works to determine the supplier's true cost structure.
D)  the buyer's lowest reasonable price target,and works to a negotiated price agreed on by the buyer and the supplier.
E)  the selling price of an organization's end product minus actual manufacturing,overhead,and materials costs to determine operating profit.

Question 15

FinTech firms assist manufacturers in the development and implementation of process technology innovation.

Accepted Answer

A) True 
 B)False

Question 16

Qualifying sources is an example of a post-transaction cost phase in the total cost of ownership model.

Accepted Answer

A) True 
 B)False

Question 17

When estimating the cost structure of a manufacturing supplier:

Accepted Answer

A)  material costs are difficult to estimate.
B)  direct labor costs are the easiest costs to estimate.
C)  prices of raw materials are not commonly accessible.
D)  labor rates are typically uniform across different plant locations.
E)  equipment depreciation is typically the largest cost element in overhead.

Question 18

Cost management for services:

Accepted Answer

A)  is confined to internal demand analysis and consumption management.
B)  is confined to supplier cost structure analysis.
C)  includes demand management and supplier cost structure analysis.
D)  focuses primarily on better design of the service.
E)  is only possible when the service is highly tangible.

Question 19

When planning a negotiation strategy,if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap,the negotiator must determine if the gap can be closed.

Accepted Answer

A) True 
 B)False  True

Question 20

The goal of value engineering and value analysis is to:

Accepted Answer

A)  perform a function at the same or an improved level while reducing costs.
B)  analyze the value-added from engineering services and production.
C)  analyze functions to satisfy all needed quality requirements at any cost.
D)  define value of a function in technically accurate and precise language.
E)  perform a function at an improved level at the same cost. A

Exam 11: Cost Management

In portfolio analysis,strategic goods and service are both more valuable to the buying organization and riskier to acquire.

Correct AnswerverifiedShow Answer

The position of strength assessment focuses exclusively on the other party in the negotiation.

Correct AnswerverifiedShow Answer

An externally focused process of analyzing costs in terms of the overall supply chain is called strategic cost management.

Correct AnswerverifiedShow Answer

Target costing may result in company-wide cost reductions in design to cost,manufacture to cost,and purchase to cost.

Correct AnswerverifiedShow Answer

All negotiations have an economic as well as a psychological dimension.

Correct AnswerverifiedTrue

In portfolio analysis,bottleneck items are characterized by high risk and high value.

Correct AnswerverifiedShow Answer

Purchases categorized as leverage items in portfolio analysis have the following characteristic(s) :

Correct AnswerverifiedShow Answer

In portfolio analysis,the goal when purchasing bottleneck items is to:

Correct AnswerverifiedShow Answer

Life cycle costing (LCC) :

Correct AnswerverifiedShow Answer

Cost management tools and techniques that may provide data for negotiations with internal organizational stakeholders and/or externally with suppliers include:

Correct AnswerverifiedShow Answer

Purchasers can use activity-based costing to:

Correct AnswerverifiedShow Answer

After identifying and implementing supply cost savings,the supply manager should:

Correct AnswerverifiedShow Answer

Value engineering (VE)and value analysis (VA)use the same methods,but VA is performed in the design stage and VE is performed in the redesign stage.

Correct AnswerverifiedShow Answer

Target costing starts with:

Correct AnswerverifiedShow Answer

FinTech firms assist manufacturers in the development and implementation of process technology innovation.

Correct AnswerverifiedShow Answer

Qualifying sources is an example of a post-transaction cost phase in the total cost of ownership model.

Correct AnswerverifiedShow Answer

When estimating the cost structure of a manufacturing supplier:

Correct AnswerverifiedShow Answer

Cost management for services:

Correct AnswerverifiedShow Answer

When planning a negotiation strategy,if the estimated range of acceptable results for both buyer and seller indicates there is no zone of overlap,the negotiator must determine if the gap can be closed.

Correct AnswerverifiedTrue

The goal of value engineering and value analysis is to:

Correct AnswerverifiedA

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