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Exam 2: Purchasing Management

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Question 1

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A growing trend among firms that practice supply chain management is supplier development.

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Question 2

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Given the following make-buy information,what would be the break-even point? $\begin{array} { l c c } & \text { Minke Option } & \text { Guy Option } \\\hline \text { Fixed Costs } & \text { \$7500 } & \$ 1500 \\\text { Variable Costs } &\$ 4 &\$ 9\end{array}$

A) 1200 units
B) 1708 units
C) 690 units
D) 460 units

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Question 3

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Purchasing can be broadly classified into two categories: merchants and industrial buyers.

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.

Centralized purchasing is the practice where individual,local purchasing departments throughout a single corporation make their own,individual purchasing decisions to fulfill their individual local needs.

Global sourcing has become commonplace.Many companies now consider expanding their supply base to include foreign suppliers.List three reasons why companies choose to source globally.

A purchase order is legally binding once issued by the buyer.

Which of the following documents is considered the buyer's offer to purchase products or services from a supplier,is legally binding once the supplier accepts it,and usually has the terms and conditions of purchase preprinted on the back of the document?

The hybrid purchasing system,such as the one utilized by Harrah's,includes many benefits.In such a system the regional office preserves four fundamental purchasing rights.Which of the following is NOT one of those rights?

In the context of Supply Chain Management,the acts of obtaining raw materials,services,maintenance,repair and operating supplies for money can all be defined as purchasing.

When a material is not available in the warehouse and there is no current supplier for the item,the buyer must identify a pool of suppliers and issue a:

As firms seek to improve the products they offer to the market,companies are seeking help from their suppliers in new product design and development through:

Given the following make-buy information,what would be the break-even point? $\begin{array} { l c c } & \text { Make Option } & \text { Buy Option } \\\hline \text { Fixed Costs } & \$ 15000 & \$ 1250 \\\text { Variable Costs } &\$ 5 & \$10\end{array}$

Decentralized purchasing is the practice where individual,local purchasing departments throughout a single corporation make their own,individual purchasing decisions to fulfill their individual local needs.

Which of the following is NOT a form of countertrade?

Benefits derived from implementing an e-procurement system include all EXCEPT:

Procurement credit cards can be used for small purchases excluding meals,lodging,and travel expenses.

Which of the following is a reason that single sourcing is considered risky/bad?

The measurement of the impact of change in purchase spend on a firm profit before taxes,assuming gross sales and other expenses remain unchanged,is referred to as:

The goal of a good purchasing system is to ensure efficient information transitions between the materials users,the purchasing personnel,and the suppliers.