Purchasing and Supply Chain Management
Test Preparation
Course Introduction
Purchasing and Supply Chain Management explores the strategic and operational roles of purchasing, procurement, and supply management within an organization. This course provides an overview of sourcing strategies, supplier relationship management, contract negotiations, and the legal and ethical frameworks governing purchasing activities. Students will learn how supply chains are structured, coordinated, and optimized to enhance value, minimize costs, and deliver goods and services effectively in a global marketplace. The curriculum emphasizes real-world challenges such as risk management, sustainability, technology adoption, and performance measurement, equipping students with practical tools and analytical skills essential for successful careers in supply chain management.
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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Sample Questions
Q1) Which of the following are activities of the purchasing function?
A) Representing the company in legal matters.
B) Monitoring and controlling orders to secure supply.
C) Public relations.
D) Developing strategic corporate plans.
Answer: B
Q2) Procurement and supply chain management can contribute to improving the company's bottom line in which of the following ways?
A) Quantitative only.
B) Qualitative only.
C) Both quantitative and qualitative.
D) Neither quantitative nor qualitative.
Answer: C
Q3) Which of the following are not procurement activities?
A) Traffic and transportation
B) Inventory control
C) Incoming inspection
D) Quality control and quality assurance.
Answer: B
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Chapter 2: Industrial Buying Behavior: Decision-Making in Purchasing
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Q1) Which of the following are not key processes in the 'Extended Purchasing Model'?
A) Source
B) Purchase
C) Pay
D) Evaluation
Answer: D
Q2) Which of the following best explains 'Penalty clause'?
A) That part of the contract which will stipulate what will happen if a supplier does not meet its obligations.
B) That part of the contract which will stipulate what will happen if a supplier meets its obligations.
C) That part of the order which will stipulate what will happen if a supplier does not meet its obligations.
D) That part of the order which will stipulate what will happen if a supplier meets its obligations.
Answer: A
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Chapter 3: The Purchasing Management Process
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Sample Questions
Q1) Which of the following is a stage in the 'Purchasing and Supply Development Model'?
A) After Sales Service.
B) Pricing.
C) Coordination orientation.
D) Manufacture.
Answer: C
Q2) Which of the following explains 'Market Structure'?
A) The total set of conditions in which a company sells its products, with special attention to the number of parties in the market and the nature of the product being traded.
B) The number of suppliers.
C) The total set of conditions in which a company sells its products with special attention to the nature of the product being traded.
D) The total set of conditions in which a company sells its products with special attention to the number of parties in the market.
Answer: A
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Chapter 4: Buying Business Services
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Q1) Which of the following best explains 'Non-business-critical services'?
A) Unimportant services.
B) Less profitable services.
C) A service where the suppliers performance does not immediately affect end-customer satisfaction.
D) A service where the suppliers performance will immediately affect end-customer satisfaction.
Q2) Which of the following is a criterion in the purchasing portfolio approach (Kraljic Portfolio)?
A) Projected market share.
B) New product availability.
C) Supply risk.
D) Existing market share.
Q3) Which of the following characteristics is a quadrant in the purchasing portfolio approach (Kraljic Portfolio)?
A) Price.
B) Frequency of use.
C) Availability.
D) Leverage products.
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Chapter 5: Contract Management for Complex Projects
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Sample Questions
Q1) In the key elements of the contracting process which element comes before contract negotiation and closure and after basic design and engineering?
A) Sending out the invitation to tender.
B) Project execution.
C) Claims.
D) Testing and delivery.
Q2) Which of the following is an example of a large infrastructure project?
A) Highways.
B) An office redecoration.
C) A roof repair.
D) Re-surfacing the car park.
Q3) Which of the following is a dimension of contract management?
A) Information flow.
B) Tendering.
C) Contracting
D) Evaluating.
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Chapter 6: Public Procurement
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Sample Questions
Q1) Which of the following best comes before the 'contract notice'?
A) The contract awards notice.
B) The notification of unsuccessful bidders.
C) The contract evaluation.
D) The prior information notice.
Q2) Which of the following best explains 'mandatory exclusion criteria'?
A) Participation in politics.
B) Tenders from non-EU companies.
C) Did not submit bid by the deadline in the tender.
D) Participation in trafficking human beings.
Q3) Which of the following best explains public procurement 'design contest'?
A) Tendering organizations submit designs to be ranked by the purchasing organization.
B) Contracts are awarded prior to design being submitted.
C) Submitted designs are judged by a jury of professionals in fields complimentary to the nature of the design.
D) Designs are given to tendering organizations.
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Chapter 7: Purchasing and Business Strategy
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Sample Questions
Q1) Which of the following are characteristics of 'leverage products'?
A) They are bought in single volumes.
B) They are bought infrequently.
C) They are bought at large volumes.
D) They are bought at small volumes.
Q2) Which of the following is a characteristic of the 'Development segment' of the 'Dutch windmill'?
A) Buyer can easily switch from one supplier to another.
B) Supplier in a dominant position versus its customers.
C) Supplier in weak position needing to compete with other suppliers for orders.
D) Suitable for building long-term relationships.
Q3) Which of the following should be considered when assessing a company's competitive position?
A) Human resource management.
B) Direct competitors.
C) Legislation.
D) Marketing.
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9
Chapter 8: Outsourcing and Risk Management
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Q1) Which of the following is a tactical reason for 'outsourcing'?
A) To improve customer satisfaction.
B) To free up internal resources.
C) To develop partnerships.
D) To gain access to resources that are not available internally.
Q2) Which of the following is a disadvantage of outsourcing?
A) Freeing up cash.
B) The risk of leakage of confidential information.
C) Increased flexibility.
D) Optimising usage of experience of third party.
Q3) Which of the following should be a feature of an Outsourcing Agreement?
A) Term of the agreement.
B) Supply dates.
C) Quality assurances.
D) Independent evaluation.
Q4) Which of the following should be a feature of an Outsourcing Agreement?
A) Supply dates.
B) Quality assurances.
C) Rates, fees and incentives.
D) Independent evaluation.
Page 10
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Chapter 9: Category Sourcing: Developing Effective
Sourcing
Strategies
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Sample Questions
Q1) Which of the following best explains 'contract buying'?
A) Bought at last year's price.
B) Bought at possible future price.
C) Buying at current market prices.
D) Bought at previously agreed price.
Q2) Which of the following is a criterion in a category prioritization matrix?
A) Cost savings potential.
B) Scope of last tender.
C) Current profit levels.
D) Type and age of contract.
Q3) Which of the following would not be contained in the 'bid package'?
A) Buyer's purchasing requirements.
B) Recent financial projections.
C) A draft contract.
D) Bid submission instructions.
Q4) Which of the following should be addressed by a category resourcing strategy?
A) Single versus multiple sourcing.
B) Cost versus quality.
C) Competitor analysis.
D) Market share of supplier.
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Chapter 10: Purchasing Innovation and Quality Management
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Sample Questions
Q1) Which of the following best explains 'production planning stage'?
A) Production requirements are taken into account.
B) The product design is translated into a number of prototypes or laboratory models.
C) The conceptual design is translated into a technical design.
D) The new product idea is translated into a first conceptual design.
Q2) Which of the following is not a feature of 'the plan-do-check-act cycle'?
A) Added value.
B) Realization.
C) Verification.
D) Feedback.
Q3) Which of the following is not a stage in the prevention approach to supplier quality assurance?
A) Delivery of first and subsequent pre-production series.
B) Manufacture of first production series.
C) Payment of first invoice to supplier.
D) Quality agreement and certification.
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Chapter 11: Purchasing Logistics and Supply Chain Management
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Q1) Which of the following is a characteristic of 'master production scheduling (MPS)'?
A) Customer orders, the sales plan, the planned stocks of finished products, and the purchasing plans are linked together.
B) The resources needed are recorded in a document from which the required composition of manufacturing resources is derived.
C) This is a basis for computing the quantities of materials, semi-manufactured products and components which must be manufactured.
D) Priorities are derived directly from the master production schedule.
Q2) Which of the following is not a step in the process of setting up a production line?
A) Preparation.
B) Setting up.
C) Distributing.
D) Conversion.
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Chapter 12: Purchasing Organization
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Sample Questions
Q1) 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.
Q2) Which of the following are not disadvantages related to decentralized purchasing?
A) Dispersed purchasing power.
B) Direct responsibility for profit centres.
C) Scattered market research.
D) No uniform attitude towards suppliers.
Q3) Which fraction of purchasing respondents surveyed admitted to rarely or never changing suppliers?
A) 1/4.
B) 1/3.
C) 1/2.
D) 1/5.
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14
Chapter 13: Performance Measurement and Governance in Purchasing
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Sample Questions
Q1) Which of the following are potential benefits of critical or key performance indicators?
A) They facilitate discussions on how to improve service levels.
B) They improve performance.
C) KPIs should be subjective
D) KPIs should be not be 'cost-driven'.
Q2) In the automotive industry,which of the following percentages represent the yearly cost reductions targeted?
A) 5%.
B) 7%.
C) 8%.
D) 10%.
Q3) Which of the following best explains 'cost avoidance'?
A) The variance between the historical and the actual purchase price paid per unit.
B) The reduction on costs against planned costs.
C) The total purchasing budget savings.
D) The purchasing savings budget for each item.
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Page 15
Chapter 14: Cost Approaches and Techniques
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Q1) Which of the following is not a contributor to changes in the market structure?
A) Change in exchange rates.
B) Change in supply.
C) Change in supply side inventory.
D) Change in supplier capacity utilization.
Q2) Which of the following is not a supplier assessment level?
A) Company level.
B) Product level.
C) Process level.
D) Accreditation level.
Q3) Which of the following best explains mark-up pricing?
A) A particular profit margin is added to some costs, including the cost of sales.
B) A particular profit margin is added to all costs, including the cost of sales.
C) A fixed percentage mark-up is added to the cost price.
D) A 5% profit margin is added to the cost of sales.
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Chapter 15: Purchasing, Corporate Social Responsibility and Integrity
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Sample Questions
Q1) Which of the following is a reason why corporate social responsibility (CSR) has increased in importance in recent times?
A) Legislation.
B) Social media.
C) Outsourcing.
D) Globalisation.
Q2) Which of the following best explains 'a value chain focus on environmental issues'?
A) The focus is from the sourcing of raw materials to the way consumers utilize products
B) This includes all activities that are focused on an efficient use of natural resources of energy, raw materials and other natural resources.
C) The profit aspect provides guidelines for sustainable financial development of a company, measured over a longer period of time.
D) This includes all activities that are focused on providing good labour conditions for employees and a labour climate in which individual employees are able to develop their skills and competencies.
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