Inventory and Materials Management
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Course Introduction
This course provides an in-depth exploration of inventory and materials management within the context of supply chain operations. Students will learn the principles and techniques used to efficiently control inventory levels, manage stock, and ensure the timely procurement and distribution of materials. The course covers key topics such as demand forecasting, inventory control models, materials requirement planning (MRP), just-in-time systems, and the use of technology for tracking and management. Emphasis is placed on achieving balance between cost efficiency and service level requirements, reducing waste, and supporting organizational objectives through effective materials management strategies.
Recommended Textbook
Purchasing and Supply Chain Management 6th Edition by Robert M. Monczka
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20 Chapters
1518 Verified Questions
1518 Flashcards
Source URL: https://quizplus.com/study-set/1154 Page 2
Chapter 1: Introduction to Purchasing and Supply Chain Management
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46 Verified Questions
46 Flashcards
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Sample Questions
Q1) Which of the following is not one of the factors driving an emphasis on supply chain management?
A) An increasing emphasis on domestic sourcing due to the longer lead times and higher levels of pipeline inventories associated with global sourcing.
B) The cost and availability of information resources among entities in the supply chain that allow easy linkages that eliminate time delays in the network.
C) The level of competition in both domestic and international markets requires organizations to be fast, agile, and flexible.
D) Customer expectations and requirements that are becoming much more demanding.
E) The ability of an organization's supply chain to identify and mitigate risk minimizes disruptions in both supply and downstream product or services to mitigate the impact on lost sales.
Answer: A
Q2) Supply management is a broader concept than purchasing.
A)True
B)False
Answer: True
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Chapter 2: The Purchasing Process
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79 Flashcards
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Sample Questions
Q1) Which of the following is not an advantage of online ordering systems?
A) Immediate visibility to back-ordered items.
B) Longer order cycle time from input to delivery.
C) Faster order input time.
D) Reduced ordering errors.
E) Ability to batch multiple items from multiple users on a single order.
Answer: B
Q2) _____ is a process associated with defining the contract, defining roles and responsibilities of both parties, and advising when to modify and ensure appropriate escalation.
A) Spend analysis
B) Contract management
C) Cost management
D) Supplier selection
E) Category management
Answer: B
Q3) Almost all firms establish blanket purchase orders with their suppliers.
A)True
B)False
Answer: True
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Chapter 3: Purchasing Policy and Procedures
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) All of the following are examples of topics discussed in legal contract procedures except _____.
A) essential elements of the contract
B) execution and administration of agreements
C) compliance with contract terms and performance assessment
D) legal definitions
E) analysis of competitive quotations
Answer: E
Q2) It is only the supervisor's responsibility, and not the employee's, to ensure that the purchasing employee is familiar with and follows the procedures covering legal contracts.
A)True
B)False
Answer: False
Q3) Once written, policies do not have to be periodically reviewed for clarity and conformance.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Supply Management Integration for Competitive Advantage
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67 Verified Questions
67 Flashcards
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Sample Questions
Q1) Membership on a team can have negative effects on individuals.
A)True
B)False
Q2) The use of cross-functional sourcing teams guarantees a successful outcome to a project or assignment.
A)True
B)False
Q3) Using _____, the supplier is given blueprints and told to make the product from them.
A) black box design
B) gray box design
C) red box design
D) white box design
E) shadow box design
Q4) Early visibility to product requirements allows supply management to share critical information with suppliers that can help avoid delays.
A)True
B)False
Page 6
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Chapter 5: Purchasing and Supply Management Organization
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73 Flashcards
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Sample Questions
Q1) The trend today is to move away from a horizontal focus, where work and information are managed across groups and between organizations, toward a vertical focus, where work and information are managed up and down within functional groups.
A)True
B)False
Q2) The _____ group is responsible for developing the policies and procedures that purchasing personnel follow, administering and maintaining the purchasing information system and database, determining required staffing levels, developing department plans, organizing training and seminars for buyers, and developing measurement systems to evaluate purchasing performance.
A) administration and data management
B) tactical buying
C) sourcing, negotiation, and contract management
D) operational support and follow-up
E) market intelligence and research
Q3) Not all observers agree that the use of teams is a guarantee of greater effectiveness.
A)True
B)False
Page 7
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Chapter 6: Category Strategy Development
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80 Flashcards
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Sample Questions
Q1) The key to good market intelligence is to _____ data, which means to explore, compare, and contrast data from multiple sources before it can be validated.
A) triangulate
B) minimize
C) gather
D) collect
E) assemble
Q2) In the _____ of the process of supplier segmentation, the supplier views the buyer as an unimportant customer, and to make the situation worse, the volume the buyer has with this supplier is insignificant to the supplier.
A) NUISANCE segment
B) CORE segment
C) EXPLOIT segment
D) DEVELOP segment
E) None of the above.
Q3) Increasing revenues involves either raising prices or keeping prices stable and increasing volume.
A)True
B)False
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Page 8
Chapter 7: Supplier Evaluation and Selection
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following key financial ratios is calculated as Sales/Total assets?
A) Fixed asset turnover.
B) Total asset turnover.
C) Current ratio.
D) Return on assets.
E) Interest coverage.
Q2) Local suppliers are less responsive to the buying firm's changing needs and cannot economically make frequent smaller deliveries.
A)True
B)False
Q3) Suppliers seldom use trade journals to advertise their products or services.
A)True
B)False
Q4) The degree of effort associated with supplier selection is inversely related to the importance of the required good or service.
A)True
B)False
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Chapter 8: Supplier Quality Management
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94 Flashcards
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Sample Questions
Q1) ISO 9000:2008 follows a product-based approach to quality management that stresses planning, acting, analyzing results, and making improvements.
A)True
B)False
Q2) _____ occur before the product or service is provided to the customer.
A) Internal failure costs
B) Appraisal costs
C) External failure costs
D) Prevention costs
E) Total costs
Q3) An emphasis on finished product rather than process demands that a supplier provide evidence of its process capability to the buyer on an ongoing, regular basis.
A)True
B)False
Q4) A comprehensive supplier quality manual does not need to describe the supplier selection and evaluation processes.
A)True
B)False
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Chapter 9: Supplier Management and Development:
Creating a World-Class Supply Base
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84 Verified Questions
84 Flashcards
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Sample Questions
Q1) There is only one common approach to supply base rationalization and optimization.
A)True
B)False
Q2) All organizations need to pursue supplier development.
A)True
B)False
Q3) Many buyers have now concluded that, if they select suppliers carefully and develop close and collaborative working relationships with fewer suppliers, supply risk can actually decrease.
A)True
B)False
Q4) Buyers rarely rely on suppliers for cost-reduction assistance.
A)True
B)False
Q5) All buyers are encouraged to engage in currency hedging activities, regardless of their level of experience.
A)True
B)False
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Chapter 10: Worldwide Sourcing
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Sample Questions
Q1) All of the following are elements of total cost for worldwide sourcing except _____.
A) payment terms
B) customs brokers fees
C) additional fees or commissions
D) domestic income taxes
E) inventory carrying costs
Q2) _____ occurs when a firm physically builds a plant in another country or provides a service, equipment, or technology to support the plant; the firm then agrees to take a portion of the plant's output as payment.
A) Switch trading
B) Buy-back
C) Offset
D) Counterpurchase
E) Barter
Q3) What is an illegal activity in the United States is never an accepted business practice in many other regions.
A)True
B)False
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Chapter 11: Strategic Cost Management
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) _____ indicates whether a seller can lower its cost as a result of the repetitive production of an item.
A) Process capability analysis
B) Market analysis
C) Price analysis
D) Break-even analysis
E) Learning-curve analysis
Q2) As a product reaches its end of life, supply management cannot ignore the potential value of environmental initiatives to remanufacture, recycle, or refurbish products that are becoming obsolete.
A)True
B)False
Q3) In the _____, pricing is based on the assumption that long-run profitability depends on the market share obtained by the supplier.
A) price volume model
B) market-share model
C) open market model
D) target pricing model
E) market skimming model
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Page 13
Chapter 12: Purchasing and Supply Chain Analysis: Tools and Techniques
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Sample Questions
Q1) All processes or items can benefit from, or exhibit improvement from, learning.
A)True
B)False
Q2) Learning curves require the accurate collection of cost and labor data, particularly during the latter stages of production.
A)True
B)False
Q3) In a PERT network, a/an _____ is the earliest point in time an activity can begin.
A) late start
B) on time start
C) early finish
D) early start
E) late finish
Q4) The advantage of a Gantt chart is that for larger projects, it can be easy to use and keep up to date.
A)True
B)False
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Chapter 13: Negotiation and Conflict Management
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Sample Questions
Q1) _____ seeks to expand the value or resources of outcomes available to all parties through cooperative negotiation.
A) Win-win negotiation
B) Distributive bargaining
C) Competitive bargaining
D) Lose-lose negotiation
E) Open-table bargaining
Q2) A negotiator's _____ can be defined as his or her opening offer, which represents the optimistic (or ideal) value of the issue being negotiated.
A) interest
B) need
C) BATNA
D) position
E) want
Q3) Use of electronic media such as e-mail, texting, and instant messaging, has no measurable impact on the dynamics and effectiveness of a negotiation.
A)True
B)False
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Chapter 14: Contract Management
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109 Flashcards
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Sample Questions
Q1) As the total dollar value/unit cost of the contract decreases, purchasers must spend more effort creating effective pricing mechanisms.
A)True
B)False
Q2) The _____ clause of a contract identifies any free trade issues and benefits, and how to share the benefits.
A) assignment and contracting
B) free trade areas
C) key performance indicators and compensation
D) payment
E) scope of agreement
Q3) The most basic contractual pricing mechanism is called a/an _____ contract.
A) fixed price with escalation
B) cost plus incentive fee
C) firm fixed price
D) cost-sharing
E) fixed price with redetermination
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Chapter 15: Purchasing Law and Ethics
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Sample Questions
Q1) Purchasing managers cannot be held personally liable for their damaging and illegal activities even if they perform them with the authority of their firm.
A)True
B)False
Q2) Either buyers or sellers can arbitrarily cancel or default on their contracts with impunity.
A)True
B)False
Q3) When a non-agent, such as a maintenance supervisor, engineer, or finance analyst makes a commitment with a supplier, this is termed _____.
A) implied authority
B) actual authority
C) apparent authority
D) limited authority
E) None of the above.
Q4) Generally, honest mistakes by a single party to the contract will void the contract.
A)True
B)False
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Chapter 16: Lean Supply Chain Management
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Sample Questions
Q1) All of the following action support reduced order-cycle time with suppliers except
A) expanded global sourcing
B) expanded electronic capability
C) supplier development support
D) order-cycle time measurement
E) focus on second- and third-tier suppliers
Q2) When firms produce goods in response to a customer order, they are operating in a/an _____ environment.
A) make-to-order
B) make-to-stock
C) make-to-forecast
D) WIP
E) None of the above.
Q3) All of the following are categories of inventory except _____.
A) lean inventory
B) raw material and semifinished item inventory
C) work-in-process inventory
D) MRO supplies inventory
E) pipeline/in-transit inventory
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Chapter 17: Purchasing Services
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Sample Questions
Q1) More effective control of inbound shipment costs usually requires purchasing goods under a shipping designation of FOB destination.
A)True
B)False
Q2) As organizations continue to focus more and more on their internal core competencies and outsource non-core activities, they have come to recognize that many of their necessary transportation and logistics services can, and should be, outsourced to expert companies specializing in transportation and logistics services.
A)True
B)False
Q3) The importance of effectively managing an organization's indirect spend is decreasing.
A)True
B)False
Q4) A project's scope does not need to include any nondisclosure statements to protect the buying company's interests.
A)True
B)False
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Page 19
Chapter 18: Supply Chain Information Systems and Electronic Sourcing
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Sample Questions
Q1) Making information visible does not require a degree of collaboration between the parties.
A)True
B)False
Q2) A _____ system is often used to search for patterns or relationships in the data.
A) routine decision making
B) strategic decision making
C) transaction processing
D) decision support
E) None of the above.
Q3) A/An _____ system provides the means for tracking organizational resources, including people, processes, and technology.
A) MRP
B) ERP
C) EDI
D) legacy
E) decision support
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Page 20
Chapter 19: Performance Measurement and Evaluation
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Sample Questions
Q1) Cost avoidance figures almost always require manual calculation and are sometimes subject to exaggeration.
A)True
B)False
Q2) _____ is the continuous measuring of products, services, processes, activities, and practices against a firm's best competitors or those companies recognized as industry or functional leaders.
A) Benchmarking
B) TCO
C) TQM
D) Effectiveness
E) Efficiency
Q3) _____ is a process that the purchasing function follows when it performs benchmarking comparisons.
A) Strategic benchmarking
B) Support-activity benchmarking
C) Process capability
D) Operational benchmarking
E) Outsourcing
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Page 21
Chapter 20: Purchasing and Supply Strategy Trends
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Sample Questions
Q1) Which of the following is a question that companies will need to carefully establish their supply bases?
A) What current and future supplier capabilities are required?
B) How many suppliers are required to support company needs?
C) Should we establish/require specific suppliers at the Tier 2 and Tier 3 levels?
D) All of the above.
E) None of the above.
Q2) All of the following are examples of the future focus on supply chain performance except _____.
A) accelerating and obtaining more innovation from suppliers
B) focusing more and more on day-to-day tactical purchasing activities
C) leveraging supplier capabilities and know-how to establish new sources of revenue
D) identifying and mitigating supply risks of any kind to ensure business continuity
E) expanding the breadth and depth of cost management efforts
Q3) Firms, not supply chains, compete.
A)True
B)False
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