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Exam 2: Purchasing Management

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Question 1

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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:

A) Supplier certification programs
B) Manufacturer certification programs
C) Early supplier involvement
D) Total Cost of Ownership initiatives

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Question 2

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Which of the following is NOT a form of countertrade?

A) Barter
B) Offset
C) Incoterming
D) Counterpurchase

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Question 3

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Your firm needs to purchase office supplies.What method do you choose to use for this small dollar value purchase? Justify your answer.

Given the following make-buy information, what would be the break-even point? Make Option Buy Option Fixed Costs $7500 $1500 Variable Costs $ 4 $ 9

Answer the questions that follow, based on the diagram provided below a.What are the fixed costs for the make decision? b.What is the breakeven quantity for the two options illustrated? c.At Q = 500, would you choose the make or buy option? Why? d.At Q = 100, what will be the total cost associated with the best decision at this quantity?

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?

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

There is a clear line between purchasing activities and the supply management function.

The WTO is a trade organization seeking to establish trade barriers that will protect member countries by excluding nations that pose an economic threat.

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

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?

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.

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

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

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.

The primary goals of purchasing include all EXCEPT:

Which of the following statements is FALSE?

If the break-even point in a typical make-buy scenario is 24,000 units and 8,000 units are required, than the firm should choose to make.

According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during manufacturing.

Which type of requisition is used for materials and standard parts that are requested on a recurring basis?