Business Logistics
Practice Questions
Course Introduction
Business Logistics explores the strategic and operational processes involved in efficiently managing the flow of goods, services, and information from the point of origin to the end consumer. This course covers key topics such as transportation management, inventory control, warehousing, order fulfillment, procurement, and distribution network design.
Emphasizing the integration of logistics with other business functions, students will gain insights into optimizing supply chain performance, reducing costs, improving customer satisfaction, and leveraging technology for competitive advantage. Practical case studies and real-world examples are used to illustrate contemporary challenges and solutions in the dynamic field of business logistics.
Recommended Textbook
Purchasing and Supply Chain Management 7th Edition by van Weele
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15 Chapters
909 Verified Questions
909 Flashcards
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Chapter 1: The Role of Purchasing in the Value Chain
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Sample Questions
Q1) What is expediting?
A) Following up on a purchase order to cancel it.
B) Following up on a purchase order to change the delivery date.
C) Following up on a purchase order to make sure that the supplier is being paid.
D) Following up on a purchase order to make sure that the supplier is going to perform as it has confirmed through the purchase order confirmation.
Answer: D
Q2) Which of the following activities is not part of sourcing strategy?
A) Identifies for a certain category from how many suppliers to buy, what type of relationship to pursue, and type of contract to negotiate for.
B) Identifies for a certain category whether to source locally, regionally or globally.
C) Competitor analysis.
D) Identifies for a certain category from how many suppliers to buy, what type of relationship to pursue, and contract duration
Answer: C
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3
Chapter 2: Industrial Buying Behavior: Decision-Making in Purchasing
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58 Flashcards
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Sample Questions
Q1) Which of the following best explains a 'Purchase order confirmation'?
A) A document that is used by the buyer in which they agree to perform according to the order.
B) A document that is used by the supplier in which they agree to perform according to the buyer's purchase order.
C) A document that is used by the buyer in which they agree to perform according to the supplier's contract.
D) A document that is used by the supplier in which they agree to receive payment according to the buyer's purchase order.
Answer: B
Q2) Which of the following better explains 'Competitive Bidding'?
A) This is a situation where a supplier asks for orders from different buyers.
B) This is a situation where a buyer asks for bids from different suppliers.
C) This is a situation where a buyer asks for information from one supplier.
D) This is a situation where a buyer asks for bids from different suppliers, creating a level playing field.
Answer: D
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Page 4
Chapter 3: The Purchasing Management Process
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Sample Questions
Q1) Which of the following dimensions are aspects of materials cost policy?
A) Control of cost of uniforms.
B) The cost of energy consumption.
C) Reduction of logistics and transportation cost.
D) The reputational costs.
Answer: C
Q2) Which one of the following best describes what investments are made by the company in terms of new products and technology,and what products will be taken out of the market for the years to come?
A) Planning phase
B) Business alignment strategy
C) Operational phase
D) Implementation phase
Answer: B
Q3) Which of the following is the prime source of the purchasing objectives?
A) Operational plans.
B) Customer evaluations.
C) Company strategies.
D) Tactical plans.
Answer: C
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Chapter 4: Buying Business Services
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Sample Questions
Q1) Which of the following are not possible under the terms of a Service Level Agreement (SLA)?
A) Specific rates plus a bonus.
B) Clear performance targets.
C) Guaranteed bonuses.
D) Specific rates minus a penalty.
Q2) Which of the following could be a consequence of competence problems and friction between the buyer and other departments?
A) Outsourcing.
B) A lack of transparency in purchasing decisions.
C) Overspending on supplies.
D) Internal departments may prefer to deal directly with the supplier.
Q3) Which of the following internal activities,once outsourced,could commonly result in service provider staff working within the purchaser organization?
A) Finance activities.
B) Security services.
C) Market research.
D) Sales.
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Chapter 5: Contract Management for Complex Projects
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Sample Questions
Q1) Which of the following best explains 'bank guarantee'?
A) Guarantee issue by supplier.
B) Guarantee issued by the bank of the supplier.
C) Guarantee issued by the purchaser.
D) Guarantee issued by the bank of the purchaser.
Q2) Which of the following is an example of a large infrastructure project?
A) Refurbishing the toilets.
B) Bridge construction.
C) A roof repair.
D) Re-surfacing the car park.
Q3) Complex construction projects require which of the following?
A) Suppliers.
B) Budgets.
C) Professional procurement.
D) Materials.
Q4) Which of the following best explains 'milestone payments'?
A) Payments for wages and salaries of key managers and workers.
B) Payments made based on deliveries made for each project planning stage.
C) Monthly payments
D) Weekly payments.
Page 7
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Chapter 6: Public Procurement
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Sample Questions
Q1) Which of the following is a principle of public procurement?
A) Value for money.
B) Transparency.
C) Efficiency.
D) Competitive tendering.
Q2) Which of the following is a European Directives public procurement procedure?
A) Negotiated procedure with or without prior publication.
B) Notification to unsuccessful bidders.
C) The contract closing date notice.
D) The prior information notice.
Q3) Which of the following best explains 'value for money' in procurement?
A) Buying a product that is fit for purpose, taking account of the whole-life cost.
B) Buying a product at the cheapest price.
C) Buying a product efficiently.
D) Buying a product effectively.
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Chapter 7: Purchasing and Business Strategy
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Sample Questions
Q1) Which of the following is generic strategy to sustain profitability?
A) High pricing.
B) Product differentiation.
C) Cost cutting.
D) Mergers.
Q2) Which of the following are enabling processes following the view of Monczka?
A) Establish customer lists.
B) Establish timescales.
C) The identification of premises requirements.
D) Establish human resource development and training.
Q3) Which of the following best explains 'resource-dependency theory'?
A) Business success is primarily achieved through deploying a company's external resources.
B) Business success is primarily achieved through deploying a company's internal resources.
C) Business success is primarily achieved through efficiency gains.
D) Business success is primarily achieved through deploying a company's external and internal resources.
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Chapter 8: Outsourcing and Risk Management
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Sample Questions
Q1) Which of the following should be a feature of an Outsourcing Service Level Agreement (SLA)?
A) It should never be updated.
B) It should reflect the overall business goals.
C) It should allow for the supplier to make changes to the SLA.
D) It should not contain details on actions if service levels are not achieved.
Q2) Which of the following is not an element in the identification and assessment stage of outsourcing?
A) Market research.
B) Competitive tendering.
C) Preliminary assessment.
D) Potential supplier list.
Q3) Which of the following is a distinct phase of the outsourcing process?
A) The planning phase.
B) The operation phase.
C) The evaluation phase.
D) The withdrawal phase.
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10
Chapter 9: Category Sourcing: Developing Effective
Sourcing Strategies
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Sample Questions
Q1) Which of the following is not an element in a category sourcing plan?
A) Summary of expected results and costs.
B) Business strategy and business issues.
C) Analysis of historical data.
D) Current market share of suppliers.
Q2) Which of the following is not an activity required when conducting a feasibility study?
A) Definition of categories and sub-categories.
B) Carry out an overview of current and future purchasing spend.
C) Most important stakeholders and actors involved.
D) Sourcing strategy for a certain category.
Q3) Which of the following should be addressed by a category resourcing strategy?
A) Profitability of suppliers.
B) Outsourcing potential.
C) Competitor analysis.
D) Partnership or competitive relationship.
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Chapter 10: Purchasing Innovation and Quality Management
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Sample Questions
Q1) Which of the following is not an example of an internal error cost?
A) Losses due to product downgrading.
B) Costs of corrective measures.
C) Losses due to a reduced speed of production caused by quality deviations in materials or components.
D) Loss of 'goodwill'.
Q2) Which of the following best explains 'supplier quality assurance'?
A) All activities conducted by a company to arrive at a zero-defects quality performance in its relationship with suppliers.
B) Some activities conducted by a company to arrive at zero-defects quality performance in its relationship with suppliers.
C) All activities conducted by a company to arrive at improved quality performance in its relationship with suppliers.
D) All activities conducted by a company to arrive at a zero-defects quality control system.
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Chapter 11: Purchasing Logistics and Supply Chain Management
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Sample Questions
Q1) Which of the following best explains 'customer order decoupling point (CODP)'?
A) The point in the supply chain where a production order becomes customer specific.
B) Activities are planned based upon customer order.
C) Orders are ready for distribution.
D) Activities are planned based upon forecast.
Q2) Which of the following is not an aspiration of logistics management?
A) Achieving the highest delivery reliability.
B) Achieving the best order fulfilment.
C) Achieving the shortest delivery time.
D) Relationship management.
Q3) Which of the following are not logistic activities?
A) Physical distribution.
B) Recycling packaging materials.
C) Recycling surplus materials.
D) Customer feedback.
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13
Chapter 12: Purchasing Organization
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Sample Questions
Q1) Which of the following key factors determine the way in which corporations should leverage their purchasing and supplier strategies?
A) Savings potential.
B) Customer demands.
C) Price fluctuations.
D) Corporate cohesion.
Q2) Which of the following is not a tactical level purchasing decision?
A) Introducing a cross-functional, cross-business category sourcing structure in the company.
B) Agreement on corporate or annual supplier framework agreements.
C) Troubleshooting: solving daily problems on quality, supply and payment in the relationship with the supplier.
D) Selection and contracting of suppliers.
Q3) Which of the following is not an operational level purchasing decision?
A) The ordering process.
B) Agreement on corporate or annual supplier framework agreements.
C) All expediting activities related to released orders.
D) The monitoring and evaluation of supplier performance.
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Chapter 13: Performance Measurement and Governance in Purchasing
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Sample Questions
Q1) Which of the following best explains 'purchasing's strategic contribution'?
A) The extent to which, by choosing a certain course of action, a previously established goal or standard is met.
B) This refers to the relationship between planned and actual costs.
C) The savings made against budget allocation.
D) The building of superior relationships with best-in-class suppliers across the company's value chain.
Q2) Which of the following best explains 'purchasing materials budget'?
A) The volume of planned purchases.
B) The volume per product item which is expected to be purchased for the next planning period and the expected price level for that specific product.
C) The total purchasing budget.
D) The purchasing budget for each item.
Q3) Which of the following is not an example of supplier relationship measures?
A) Price versus targeted price.
B) Supplier quality.
C) Supplier complaints.
D) Supplier invoice processing.
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Chapter 14: Cost Approaches and Techniques
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Sample Questions
Q1) Which of the following is not a financial indicator for assessing a supplier's financial position in relation to equity/debt relationship?
A) Cash flow/investments.
B) Long term debt/fixed assets.
C) Equity/total assets.
D) Earning before tax.
Q2) Which of the following is not a factor influencing the fixing of the selling price?
A) Expected demand.
B) Number of competitors in the market.
C) The customer's order volume.
D) Exchange rates.
Q3) Which of the following is not an internal factor influencing the purchase price?
A) Technological.
B) Logistics.
C) Technical.
D) Organizational.
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16
Chapter 15: Purchasing, Corporate Social Responsibility and Integrity
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Sample Questions
Q1) Which of the following are acceptable in relationships between purchasers and suppliers?
A) Accepting gifts from a supplier.
B) Extending a deadline for a competitive bid to one of your suppliers.
C) Engaging in a personal friendship with a supplier sales representative.
D) Accepting invitations to purchase tickets to a charity dinner.
Q2) Which of the following does not explain 'open competition'?
A) Potential suppliers have equal opportunities in bidding for an order.
B) Suppliers are selected on the basis of objective criteria.
C) Preventing exclusive dealings.
D) Collusion between purchaser and supplier.
Q3) Which of the following is not a programme and method to drive sustainability in supply chain management in relation to 'supply chain sustainability measures'?
A) Supplier code of conduct violations.
B) Percentage of sustainable suppliers.
C) Supply chain carbon dashboard.
D) ISO 20400.
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Page 17