Which of the following would be a good reason to outsource buy versus make an item quizlet?

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Terms in this set [40]

True or False:
The Profit-Leverage Effect states that a decrease in purchasing expenditures will directly decrease profit

False

True or False:
The purchasing function is one of the most value-enhancing functions in any organization, and therefore, it is not necessary to periodically monitor the purchasing function's performance against a set of standards or industry benchmarks

False

True or False:
Outsourcing allows a firm to concentrate on core capabilities and reduce staffing levels

True

True or False:
A purchase order is legally binding once issued by the buyer

False

True or False:
Duties, taxes, or customs imposed by the host country for imported or exported goods, are known as Tariffs

True

What is the term that is often used for the acquisition of services?

Contracting

Which of the following is NOT one of the primary goals of Purchasing?
- Ensure an uninterrupted flow of materials and services at the lowest total cost.
- Increase the supplier base
- Improve the quality of the finished goods produced.
- Optimize customer satisfaction

Increase the supplier base

Benefits derived from implementing an e-procurement system include all of the following EXCEPT:
- Mobility
- Tractability
- Decentralizing Purchasing
- Benefits to the suppliers

Decentralizing Purchasing

Which of the following would be a good reason to outsource [buy] versus make an item?
- Suppliers may cause diseconomies of scale, especially for components that are non-vital to the organization's operations.
- A firm may not be at or near capacity and subcontracting from a supplier may make better sense
- A firm lacks the technology or expertise to produce an item
- The supplier's brand image, reputation are not highly regarded

A firm lacks the technology or expertise to produce an item

The sum of all costs associated with every activity in the supply stream of a product, is referred to as?

Total Cost of Ownership

True or False:
Pain and Gain Share contract provisions are associated with supplier rewards and recognition programs.

True

"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network.

True

True or False:
While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices.

False

Managing a firm's external resources in ways that support the long-term goals of the firm can be referred to as?

Strategic Sourcing

True or False:
A Supplier Code of Conduct is intended to inform suppliers of ethical sourcing expectations and is typically a condition for becoming an approved supplier.

True

True or False:
The concept of Distributive Negotiations refers to both sides work together to maximize the outcome or create a win-win result.

False

The sourcing strategies including; maintaining safety and/or strategic stocks, developing contingency plans, strengthening relationships, and searching for alternatives, are appropriate for which item category?

Bottleneck items

The following term refers to an act that creates the greatest good for the greatest number of people?

Utilitarianism

An outsourcing program can result in all of the following positive outcomes, except?
- reducing staffing levels
- decreased need for supplier management
- cost reduction
- gains in manufacturing flexibility

Decreased need for supplier management

Which of the following is TRUE?
- VMI stands for Vertically Managed Inventory
- VMI stands for Vendor Managed Inventory
- 3PL stands for Third Party Leverage
- 3 PL stands fro Three Point Logistics

VMI stands for Vendor Managed Inventory

The best supplier candidates for Supplier Relationship Management [SRM] include all of the following EXCEPT?
- Preferred Suppliers
- Developmental suppliers that need to make improvements
- Suppliers that provide lesser quantities of crucial products/services
- Suppliers that provide high volumes of product or services

Developmental suppliers that need to make improvements

True or False:
Award-winning suppliers serve as role models for other suppliers and may therefore be exempt from audits and certification programs

False

True or False:
A strong supplier partnership requires that both buyer and supplier adopt a strong tactical perspective

False

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as?

Supplier Certification

The process commonly utilized in continuous improvement is known as?

Plan, do, check, act

True or False:
Successful supplier relationships involve equal decision-making control between both the buyer and the supplier.
true

True

True or False:
ISO 14000 is a widely accepted management and quality certification standard

False

True or False:
An effective supplier certification program may increase the time spent on incoming inspections

False

Benefits of implementing an effective supplier certification program include all of the following EXCEPT?
- Building long-term relationships
- Reducing time spent on incoming inspections
- Increasing the supplier base
- Recognizing excellence

Increasing the supplier base

The keys to developing successful supply partnerships include all of the following EXCEPT?
- Personal Relationships
- Individualized Objectives
- Mutual Benefits and Needs
- Performance Metrics

Individualized Objectives

True or False:
LEAN production is an operating philosophy or mindset that attempts to minimize the impact of supply variability and flaws in forecasting through the use of safety stock inventories

False

What company originated the concept of Six Sigma?

Motorola

All of the following are included in the 8 wastes EXCEPT?
- Overproducing
- Extra-Processing
- Overspending
- Waiting

Overspending

Which quality guru [expert] is credited with the concept that 'quality is free; defects are costly'

Phillip Crosby

LEAN manufacturing emphasizes all the following EXCEPT?
- Continuous improvement
- Large batch sizes
- Reduction of waste
- Synchronization of material flows

Large batch sizes

Which one of the following is among the most important elements of the LEAN manufacturing philosophy?
- quality inspections and a standard product line
- fully automated assembly lines and a large supplier base
- large inventories and large batch sizes
- waste reduction and continuous improvement

waste reduction and continuous improvement

Which one of the following is NOT a quality tool of Six Sigma?
- Flow Diagrams
- Check Sheets
- Hysterical Charts
- Cause & Effect Diagrams

Hysterical Charts

True or False:
The primary design objective of a LEAN layout is to reduce wasted movements of workers and/or materials.

True

Which of the following is NOT one of the "Seven Tools of Quality Control"?
- Scatter Diagrams
- Histograms
- Small Batch Scheduling
- Control Charts

Small Batch Scheduling

Which Statistical Tool of Six Sigma is used to determine the frequency of a specific problems?

Check Sheet

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