Business Logistics
Textbook Exam Questions
Course Introduction
Business Logistics focuses on the efficient management of the flow of goods, information, and resources throughout the supply chain, from raw material acquisition to product delivery to the end customer. This course examines key logistics functions such as transportation, inventory control, warehousing, order fulfillment, and procurement, highlighting their roles in achieving organizational objectives and customer satisfaction. Students will explore best practices, technologies, and strategies used by firms to minimize costs, improve service quality, and gain competitive advantage in both domestic and global markets. Real-world case studies and practical applications are incorporated to develop problem-solving skills relevant to logistics challenges in modern business environments.
Recommended Textbook
Purchasing and Supply Chain Management 7th Edition by van Weele
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Chapter 1: The Role of Purchasing in the Value Chain
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Q1) Which of the following is a definition of cross-functional buying teams?
A) Generalists from user departments and buyers are put together in teams to develop specific sourcing and commodity strategies and plans.
B) Specialists from user departments and buyers are put together in teams to develop specific sourcing and commodity strategies and plans.
C) Generalists from user departments only are put together in teams to develop specific sourcing and commodity strategies and plans.
D) Specialists from buyers only are put together in teams to develop specific sourcing and commodity strategies and plans.
Answer: B
Q2) Which term describes products which are not consumed immediately,but whose purchasing value is depreciated during its economic life cycle?
A) Just -in-Time supplies
B) Raw materials acquisition
C) Equipment
D) Investment goods
Answer: D
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Chapter 2: Industrial Buying Behavior: Decision-Making in Purchasing
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Q1) Which of the following better explains 'Buying Centre'?
A) A buying centre relates to all those individuals and groups who respond to the purchasing decision-making process.
B) A buying centre relates to all those individuals and groups who participate in the purchasing decision-making process.
C) A buying centre relates to all those individuals and groups who participate in the purchasing decision-making process, who share some common goals and the risks arising from the decisions.
D) A buying centre relates to all those individuals and groups who share some common goals and the risks arising from the decisions.
Answer: C
Q2) Which of the following best explains the standard legal and commercial conditions that will apply to every purchase order issued by the buyer?
A) General terms of purchase.
B) Specified terms of purchase.
C) Non-negotiable contractual terms.
D) Guarantees
Answer: A
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Chapter 3: The Purchasing Management Process
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Q1) Which of the following should be provided by purchasing management?
A) Periodical, detailed management reporting.
B) Increased market share.
C) New product development.
D) Risk assessments.
Answer: A
Q2) Which of the following explains 'Global Sourcing'?
A) Proactively integrating and co-ordinating common items and designs, technologies and suppliers across worldwide purchasing and operating locations.
B) Proactively integrating and co-ordinating common items and processes across worldwide purchasing and operating locations.
C) Proactively integrating and co-ordinating common items and materials, processes, designs, technologies and suppliers across worldwide purchasing and operating locations.
D) Proactively integrating and co-ordinating common items and materials across worldwide purchasing and operating locations.
Answer: C
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Chapter 4: Buying Business Services
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Q1) Which of the following processes is used to professionalize purchasing for purchasing excellence?
A) Supervisory management processes.
B) Operational management processes.
C) Tactical management processes.
D) Enabling process.
Q2) Which of the following were traditionally the most purchased services?
A) Security.
B) Human Resources.
C) Payroll.
D) Transport.
Q3) Which of the following is a criterion in the purchasing portfolio approach (Kraljic Portfolio)?
A) Financial impact.
B) Existing market share.
C) Projected market share.
D) New product availability.
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Chapter 5: Contract Management for Complex Projects
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Q1) In the key elements of the contracting process which element comes before subcontracting and procurement and after contract negotiation and closure?
A) Basic design and engineering.
B) Claims.
C) Detailed project engineering and planning.
D) Testing and delivery.
Q2) Which of the following best explains 'agent opportunism'?
A) Where the agent is flexible in terms of contract pricing.
B) Where the agent is flexible in relation to delivery dates.
C) Where the agent will act primarily out of self-interest.
D) Where the agent is fully compliant with the contractual requirements.
Q3) Which of the following is a cause of 'agency problem'?
A) Sub-contractors failure to perform due to poor quality performance.
B) Conflict of interest between buyer and seller due to information asymmetry.
C) Detailed project engineering and planning problems.
D) Sub-contractors failure to perform due to poor quality performance.
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Chapter 6: Public Procurement
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Q1) Which of the following disciplines is involved in public procurement?
A) Psychology.
B) Public administration.
C) Sociology.
D) Chemistry.
Q2) How many European Public Procurement Directives are there?
A) One.
B) Two.
C) Three.
D) Four.
Q3) Which of the following best explains 'a framework agreement'?
A) An agreement to establish contractual terms such as price.
B) A formal contract.
C) Purchaser rights.
D) Supplier obligations.
Q4) Which of the following best explains 'optional exclusion criteria'?
A) Participation in politics.
B) Tenders from non-EU companies.
C) Money laundering.
D) Bankruptcy.
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Chapter 7: Purchasing and Business Strategy
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Q1) Which of the following is not a generic strategy to sustain profitability?
A) Cost leadership.
B) Product differentiation.
C) Focus.
D) Cost cutting.
Q2) Which of the following is a potential route to growth as identified by Ansoff (1980)?
A) Partnership.
B) Divestment.
C) Market development.
D) Globalisation.
Q3) Which of the following best explains 'leveraging world class supply base management'?
A) Increase business with historical suppliers.
B) Increase business with local suppliers.
C) Increase business with the cheapest suppliers.
D) Increase business with suppliers who perform best.
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Chapter 8: Outsourcing and Risk Management
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Q1) Which of the following should be a feature of an Outsourcing Agreement?
A) Supply dates.
B) Termination plan.
C) Quality assurances.
D) Independent evaluation.
Q2) Which of the following best explains the concept of 'offshoring'?
A) Transferring activities that were previously conducted in-house, to a third party.
B) Transferring activities that were previously conducted in-house, to a provider in a low-cost country.
C) Transferring activities that were previously externally, to another third party.
D) Transferring activities from one section of the organization to another.
Q3) Which of the following best explains a 'performance risk'?
A) The potential for machinery to breakdown.
B) The extent to which the supplier has a history of success.
C) The chance that the supplier is not capable of doing the job it was hired for.
D) The extent to which the provider is trustworthy.
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Chapter 9: Category Sourcing: Developing Effective
Sourcing
Strategies
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Q1) Which of the following is an example of a customer relationship tactic?
A) Personal gifts and presents to decision-takers.
B) Supplier evaluations.
C) Competitive tendering.
D) Buy one get one free offer.
Q2) Which of the following is not an item of IT office supplies expenditure?
A) Paper.
B) Cleaning services.
C) Copier services.
D) Stationary.
Q3) Which of the following is not a potential consequence of category sourcing?
A) Material cost savings.
B) Increased profits.
C) Reduction of working capital.
D) Reduction of transaction costs.
Q4) Which of the following should be addressed by a contract strategy?
A) Profitability of suppliers.
B) Outsourcing potential.
C) Competitor analysis.
D) Buying on contract or buying on spot.
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Chapter 10: Purchasing Innovation and Quality Management
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Q1) Which of the following is not an example of a correction cost?
A) Conducting systematic product inspections.
B) Executing process controls.
C) Registration and processing of and reporting on the measuring data.
D) Educating, training and motivation of personnel on quality management.
Q2) Which of the following best explains 'systems audit'?
A) Using business consultants as auditors.
B) Provides an image of the degree to which a company succeeds in making everything run perfectly.
C) Assessing the internal quality and control system of an organization using a systems approach.
D) The systematic investigation of the extent to which the technical processes are capable of meeting the established standards in a predictable way.
Q3) Which of the following terms is a collaboration process?
A) How to assess inter-systems compatibility and operability.
B) Pre-selection of potential future technology partners.
C) Screening and selection of project partners.
D) Evaluating supplier development capabilities and performance.
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Chapter 11: Purchasing Logistics and Supply Chain Management
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Q1) Which of the following best explains the concept of 'outgoing materials flow'?
A) The activities needed to optimize the goods flow from suppliers to the point of consumption.
B) The way in which finished products are distributed by the company to its customers.
C) Includes the management of materials planning, the supply of raw materials and other purchased goods, internal transportation, storage and physical distribution.
D) The way in which materials processes are managed within a company.
Q2) Which of the following best explains the concept of 'logistics management'?
A) Identifying saving in direct and indirect activities.
B) Recycling packaging materials and surplus materials.
C) Includes the management of materials planning, the supply of raw materials and other purchased goods, internal transportation, storage and physical distribution.
D) The way in which materials processes are managed within a company.
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Chapter 12: Purchasing Organization
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Q1) Which of the following is not a tactical level purchasing decision?
A) Decisions to outsource activities which are currently executed by the company to outside suppliers.
B) Agreement on corporate or annual supplier framework agreements.
C) Adopting and conducting certification programmes (including audits) for suppliers.
D) Selection and contracting of suppliers.
Q2) Which of the following is a skill required of a chief procurement officer?
A) Leadership skills.
B) Project management skills.
C) Communication skills.
D) Reporting skills.
Q3) Which of the following is not a strategic level purchasing decision?
A) Decisions related to policies on reciprocal arrangements, countertrade and barter-deals.
B) Decisions relating to policies concerning transfer-pricing and inter-company supplies.
C) Developing routines for invoice handling and securing that proper payments are made to suppliers.
D) Major investment decisions.
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Chapter 13: Performance Measurement and Governance in Purchasing
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Q1) Which view of purchasing is described in the following statement??Management evaluates primarily on parameters such as backlog,number of orders issues and number of complaints.
A) Purchasing as an operational, administrative activity.
B) Purchasing as a commercial activity.
C) Purchasing as part of integrated logistics
D) Purchasing as a strategic business area.
Q2) Which of the following is not a key performance indicator (KPI) for assessing purchasing logistics performance in relation to payment?
A) Number of on-time deliveries.
B) Number of invoices processed.
C) Number of invoices per supplier.
D) Number of rush orders per month.
Q3) Which of the following is not a level of aggregation for measuring and evaluating the five dimensions of purchasing performance?
A) Per individual supplier level.
B) Per individual buyer.
C) Per line-item level.
D) Customer satisfaction.
Page 15
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Chapter 14: Cost Approaches and Techniques
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Q1) Which of the following is not a supplier assessment method?
A) Spreadsheets.
B) Qualitative assessments.
C) Vendor ratings.
D) Purchaser audits.
Q2) Which of the following is not element exposed by cost modelling?
A) Warranty costs.
B) The cost of use.
C) Actual acquisition costs that the company incurs in buying the materials.
D) Materials purchase prices.
Q3) Which of the following best explains 'value pricing'?
A) Price is based on what the market can bear.
B) Price is based on the amount of profit that should be realized.
C) Price is based on the importance of the customer to the supplier.
D) Fairly low prices for high quality offerings.
Q4) Which of the following is not a cost factor?
A) Labour costs.
B) Materials costs.
C) Energy costs.
D) Supplier capacity utilization.
Page 16
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Chapter 15: Purchasing, Corporate Social Responsibility and Integrity
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Q1) Which of the following is not a programme and method to drive sustainability in supply chain management in relation to 'external standards'?
A) Global reporting initiative.
B) Dow Jones sustainability Index.
C) Supplier development programmes.
D) ISO 20400.
Q2) Which of the following is not an approach to Corporate Social Responsibility (CSR)?
A) Passive.
B) Reactive.
C) Proactive.
D) Historical.
Q3) Which of the following are companies responsible to?
A) Shareholders.
B) Customers/Clients.
C) Employees.
D) All of the above.
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