Procurement and Contract Management Test Questions
Course Introduction
Procurement and Contract Management explores the principles, processes, and strategies involved in acquiring goods and services within organizations. The course covers key topics such as procurement planning, supplier selection, negotiation techniques, contract formulation, and legal and ethical considerations in procurement activities. Students will learn how to manage and administer contracts throughout their life cycle, mitigate risks, ensure compliance, and foster collaborative relationships with suppliers. Through case studies and practical exercises, the course equips students with the skills necessary to effectively manage procurement operations and contribute to organizational success.
Recommended Textbook
Purchasing and Supply Chain Management 6th Edition by Robert
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20 Chapters
1518 Verified Questions
1518 Flashcards
Source URL: https://quizplus.com/study-set/1154
Page 2
M. Monczka
Chapter 1: Introduction to Purchasing and Supply Chain Management
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46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/22659
Sample Questions
Q1) In the manufacturing sector, the percentage of purchases to sales averages 55 percent.
A)True
B)False
Answer: True
Q2) All of the following are roadblocks between measurement and improved performance except _____.
A) up-to-date information technology
B) too many metrics
C) debate over the correct metrics
D) constantly changing metrics
E) old data
Answer: A
Q3) Supply management is a broader concept than purchasing.
A)True
B)False
Answer: True
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Page 3
Chapter 2: The Purchasing Process
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79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/22660
Sample Questions
Q1) For routine, off-the-shelf items, the purchase requisition may contain all the information that purchasing requires.
A)True
B)False
Answer: True
Q2) Almost all firms establish blanket purchase orders with their suppliers.
A)True
B)False
Answer: True
Q3) _____ include anything that does not go directly into an organization's product.
A) MRO items
B) Raw materials
C) Production support items
D) Services
E) Semifinished products and components
Answer: A
Q4) The dollar value of the items covered by procurement cards is relatively high.
A)True
B)False
Answer: False
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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) Although there is a trend toward less reliance on competitive bids and more on negotiated longer-term agreements, many contracts are still awarded through the competitive bid process.
A)True
B)False
Answer: True
Q2) Which of the following is not a disadvantage of written and implied policies?
A) Personnel only follow policies to ingratiate themselves with executive management.
B) Employees may view policies as a substitute for effective management.
C) Policies are not a set of how-to instructions designed to provide specific answers for every business decision.
D) Policy development can restrict innovation and flexibility.
E) Policies are often difficult to communicate throughout large organizations. Answer: A
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) Organizations should use teams selectively due to limited resource availability.
A)True
B)False
Q2) Because the links between operations and supply management have been so close, it is not unusual for supply management to report directly to operations.
A)True
B)False
Q3) Supplier selection should never occur before a new part is actually designed or reaches production.
A)True
B)False
Q4) Successfully using teams does not require extensive planning before a team should be allowed to pursue an assignment.
A)True
B)False
Q5) External relationship management begins with internal relationship management: internal alignment is key.
A)True
B)False
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Chapter 5: Purchasing and Supply Management Organization
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73 Verified Questions
73 Flashcards
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Sample Questions
Q1) The preparation and transfer of material releases to suppliers is part of the operational support process.
A)True
B)False
Q2) Increasingly, purchasing is becoming more involved with expediting and inventory control.
A)True
B)False
Q3) All of the following should be included in detailed short- and long-term purchasing plans except _____.
A) historical and projected future usage of the purchased item
B) purchase objectives
C) assignment of the proper cost accounting code
D) assessment of the supply market
E) cost/price analysis
Q4) If the organization's strategy is to be responsive to individual customers in different markets, then a more centralized approach is likely.
A)True
B)False
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Chapter 6: Category Strategy Development
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) Total cost of ownership typically includes costs associated with late delivery, poor quality, or other forms of supplier nonperformance.
A)True
B)False
Q2) A _____ specifies how supply management will (1) support the desired competitive business-level strategy and (2) complement other functional strategies.
A) supply management strategy
B) corporate strategy
C) marketing strategy
D) category strategy
E) business unit strategy
Q3) The RFI constitutes a binding agreement by both the supplier and the purchaser.
A)True
B)False
Q4) A supplier catalog allows users to order directly through the Internet using a company procurement card (just like a credit card) with the delivery made directly to the site the next day.
A)True B)False
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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 is not a risk of selecting a supplier in poor financial condition?
A) The supplier is unwilling to share its technical expertise with the purchaser.
B) The supplier will go out of business.
C) The supplier may not have the resources to invest in plant, equipment, or research that is necessary for longer-term technological or other performance improvements.
D) The supplier may become too financially dependent on the purchaser.
E) Financial weakness is usually an indication of other underlying problems.
Q2) _____ is defined as the continual monitoring of the strength of suppliers' financial condition to ensure their ability to meet the purchaser's performance requirements for products or services.
A) Operational risk management
B) Sole sourcing
C) Financial risk management
D) Multiple sourcing
E) None of the above.
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9
Chapter 8: Supplier Quality Management
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94 Verified Questions
94 Flashcards
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Sample Questions
Q1) A _____ program is the formal process of verifying, usually through an intensive cross-functional on-site audit, that a supplier's processes and methods actually produce consistent and conforming quality.
A) supplier selection and evaluation program
B) supplier certification
C) Six Sigma
D) process capability
E) zero defects
Q2) Slogans, signs, and posters are highly effective in changing worker behavior because they assume that most, if not all, quality problems are due to human behavior.
A)True
B)False
Q3) The extensive use of corrective action requests supports prevention of nonconforming defects.
A)True
B)False
Q4) Inconsistency is the enemy of total quality.
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) A buyer should delay reporting a supplier's poor performance until the next annual performance review.
A)True
B)False
Q2) All of the following are possible risks of maintaining fewer suppliers except _____.
A) supplier dependency
B) supply disruption
C) overaggressive supply reduction
D) maintaining an all-foreign supply base
E) absence of competition
Q3) The categorical approach to supplier evaluation is commonly used by smaller organizations because it is both easy and relatively inexpensive to implement.
A)True
B)False
Q4) If a supplier's product or service is deemed routine to the buyer, it should then be considered for supplier development.
A)True
B)False
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Chapter 10: Worldwide Sourcing
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) _____ is the sum of the understandings that govern human interaction in a society.
A) Values
B) Beliefs
C) Language
D) Behavior
E) Culture
Q2) _____ agreements require the seller to purchase some agreed-uponpercentage of goods from a country over a specified period but allow a company to fulfill its countertrade requirement with any company or industry in the country.
A) Offset
B) Compensation trading
C) Switch trading
D) Buy-back
E) Barter
Q3) Always assume that an offshore company can automatically satisfy a buyer's performance requirements or expectations.
A)True
B)False
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12
Chapter 11: Strategic Cost Management
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) In _____, a purchaser may have to use internal engineering estimates about what it costs to produce an item, rely on historical experience and judgment to estimate costs, or review public financial documents to identify key cost data about the seller.
A) reverse price analysis
B) TCO analysis
C) penetration pricing
D) using the PPI
E) competition pricing
Q2) All of the following are examples of broad total cost of ownership categories except _____.
A) purchase price
B) acquisition costs
C) sales, general, and administrative overhead costs
D) usage costs
E) end-of-life costs
Q3) Price analysis focuses simply on a seller's price with little or no consideration given to the actual cost of production.
A)True
B)False
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Page 13
Chapter 12: Purchasing and Supply Chain Analysis: Tools and Techniques
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67 Verified Questions
67 Flashcards
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Sample Questions
Q1) Historically, the term _____ applies to the reduced direct-labor requirement per unit of output because of the effects of learning, while the term _____ refers to the longer-term factors of production that systematically reduce production costs.
A) learning curve .experience curve
B) learning curve .infinity curve
C) experience curve .Boeing curve
D) experience curve .learning curve
E) None of the above.
Q2) Most processes do not cross functional boundaries.
A)True
B)False
Q3) Value analysis traditionally applies to tangible products, and there are many reasons why companies cannot VA techniques to services.
A)True
B)False
Q4) The longest path (in time) through a PERT network is the critical path.
A)True
B)False
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Chapter 13: Negotiation and Conflict Management
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98 Verified Questions
98 Flashcards
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Sample Questions
Q1) Step 3 of Triangle Talk is _____.
A) apply tactics to win the negotiation
B) know exactly what you want
C) use power to get what you want
D) propose action in a way they can accept
E) know exactly what they want
Q2) A/An _____ is also known as the negotiator's bottom line or reservation point, that is, that point in the negotiation where it is most advantageous for the negotiator to walk away from the table and implement his or her next-best option.
A) BATNA
B) position
C) interest
D) need
E) want
Q3) The caveat to the best and final offer tactic is that the person making the best and final offer must be prepared to actually end the negotiation if the other party does not accept the offer.
A)True
B)False
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Page 15
Chapter 14: Contract Management
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) In a systems outsourcing situation, acceptance test criteria can only be determined after issuing the contract as actual operating conditions cannot be specified until the system is fully operational.
A)True
B)False
Q2) [A/An] _____ is an intervention between conflicting parties to promote reconciliation, settlement, or compromise.
A) mediation
B) arbitration
C) litigation
D) mini trial
E) rent-a-judge
Q3) In a firm fixed price contract, if the supplier increases its contract price in anticipation of rising costs, and the anticipated conditions do not occur, then the purchaser has paid too high a price for the good or service.
A)True
B)False
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Chapter 15: Purchasing Law and Ethics
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) If the carrier has refused to pay a freight claim, then the claimant has _____ from the time the claim was disallowed to file for legal relief in the courts.
A) 10 days
B) 1 month
C) 2 years
D) 10 years
E) There is no time limit for pursuing freight claims in the courts.
Q2) _____ indicates that the purchaser is responsible for payment of transportation costs and assumes title of the goods at the supplier's shipping dock.
A) F.O.B. origin
B) F.O.B. delivered
C) F.O.B. carrier
D) F.O.B. intermediate storage point
E) F.O.B. destination
Q3) The costs and penalties for patent infringement are so mild that most standard purchasing agreements do not contain an appropriate patent indemnification clause.
A)True
B)False
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Chapter 16: Lean Supply Chain Management
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Sample Questions
Q1) The downside of poor forecasting includes all of the following except _____.
A) higher inventory volumes
B) poor customer service as inventory is misallocated across locations and products
C) higher inventory carrying charges
D) excessive safety stock levels
E) decreased customer service costs
Q2) _____ means that customer orders start the work process, which ripples down through the supply chain.
A) Make-to-stock
B) Push
C) MRP
D) DRP
E) Pull
Q3) Lean is an easy approach to implement.
A)True
B)False
Q4) Purchasers should not accept any of the blame for delivery uncertainty.
A)True
B)False
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Chapter 17: Purchasing Services
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98 Verified Questions
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Sample Questions
Q1) The most significant advantage of a motor carrier is its relatively lower variable cost.
A)True
B)False
Q2) Virtually all of indirect spend is normally purchased throughthe organization's formal sourcing function or using well-established supply management processes.
A)True
B)False
Q3) Which of the following is not one of the advantages of water carrier over other modes of transportation?
A) Good for bulk commodities (inland).
B) High flexibility.
C) Good for heavy, large items (international).
D) Can handle most types of freight.
E) Low cost.
Q4) The importance of effectively managing an organization's indirect spend is decreasing.
A)True
B)False
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Chapter 18: Supply Chain Information Systems and Electronic Sourcing
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Sample Questions
Q1) _____ refers to the process of downloading all data buckets into the main system on a regularly scheduled basis.
A) DRP
B) Batch updating
C) DSS
D) Real-time updating
E) None of the above.
Q2) Because MRP and DRP systems are primarily external, an additional electronic linkage to suppliers and customers is not needed.
A)True
B)False
Q3) Web-based EDI is a much less expensive system than traditional EDI and presents fewer standards issues.
A)True
B)False
Q4) In ERP, visibility of specific transactions taking place in each business process is accessible to everyone in the organization.
A)True
B)False
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Chapter 19: Performance Measurement and Evaluation
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Sample Questions
Q1) The _____ measure expresses a maximum number (in absolute or percentage terms) of level of defects allowable for any particular product, assembly, or service.
A) Effectiveness
B) Efficiency
C) TQM
D) Cost avoidance
E) PPM
Q2) According to Kaplan and Norton, a balanced scorecard includes all of the following key performance measurement areas except the _____.
A) customer satisfaction perspective
B) operational excellence perspective
C) innovation perspective
D) human resource perspective
E) financial perspective
Q3) Although this sounds difficult, it is often easy to develop measures that direct behavior or activity exactly as intended.
A)True
B)False
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Chapter 20: Purchasing and Supply Strategy Trends
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Sample Questions
Q1) The supply base will be viewed not only as tier one suppliers but also as supply networks that extend beyond the tier one suppliers.
A)True
B)False
Q2) 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.
Q3) Time-related capabilities will drive the next generation of order winners in the eyes of the customer.
A)True
B)False
Q4) Firms, not supply chains, compete.
A)True
B)False
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