Supply Chain Management
Question Bank
Course Introduction
Supply Chain Management explores the integrated approach to the planning, coordination, and control of business processes across the entire supply chain, from raw material suppliers to end consumers. This course covers key topics such as procurement, production, distribution, logistics, demand forecasting, inventory management, and supply chain analytics. Students will learn how strategic decisions and operational efficiency impact the flow of goods, services, information, and finances, and how technology and globalization are transforming supply networks in a competitive marketplace. Real-world case studies and practical applications are used to develop problem-solving skills essential for effective supply chain management.
Recommended Textbook
Purchasing and Supply Chain Management 5th Edition by Robert M. Monczka
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Chapter 1: Introduction to Purchasing and Supply Chain Management
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Sample Questions
Q1) Sophisticated customers,both industrial and consumer,no longer talk about price increases; they demand price reductions.
A)True
B)False
Answer: True
Q2) A ____ is a set of three or more organizations linked directly by one or more of the upstream or downstream flows of products,services,finances,and information from a source to a customer.
A) process
B) cost savings chain
C) value chain
D) social media chain
E) supply chain
Answer: E
Q3) Processes usually move across functional boundaries.
A)True
B)False
Answer: True
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Chapter 2: The Purchasing Process
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Sample Questions
Q1) Effective supply market intelligence involves all of the following except ____.
A) monitoring supply markets and trends
B) ensuring that purchasing does not exceed its annual budget
C) identifying critical materials and services
D) developing supply options and contingency plans
E) supporting the organization's need for a diverse and globally competitive supply base
Answer: B
Q2) ____ is the end-to-end process of managing a supplier through the entire sourcing life cycle.
A) P2P
B) CRM
C) Outsourcing
D) Negotiation
E) SRM
Answer: E
Q3) Material discrepancies usually result from incorrect quantity shipments.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Purchasing Policy and Procedures
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Sample Questions
Q1) ____ refer(s)to the set of purposes,principles,and rules of action that guide an organization.
A) Government regulations
B) Procedures
C) Guidelines
D) Work rules
E) Policy
Answer: E
Q2) All of the following are examples of elements that must be part of an environmental management system required by the ISO 14000 certification process except ____.
A) create an environmental policy
B) set appropriate environmental goals and objectives
C) provide evidence of financial stability
D) help design and implement a program aimed at achieving environmental goals and objectives
E) monitor and measure the effectiveness of general environmental management activities within the firm
Answer: C
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Chapter 4: Supply Management Integration for Competitive Advantage
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Sample Questions
Q1) Which of the following is not an example of an appropriate use of a cross-functional team?
A) New product development.
B) Preparing a RFQ for a routine commodity product.
C) Locating a new production or distribution facility.
D) Developing a commodity or purchase family strategy.
E) Establishing a new business unit.
Q2) If positive work is never recognized or reinforced through rewards,the positive effort will likely be extinguished.
A)True
B)False
Q3) Perhaps the greatest benefit of team interaction is that once a team makes a decision,implementing the decision often becomes easier due to group buy-in.
A)True
B)False
Q4) The use of cross-functional sourcing guarantees a successful outcome to a project or assignment.
A)True
B)False
Chapter 5: Purchasing and Supply Management Organization
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Sample Questions
Q1) Decentralized purchasing personnel should gain a greater understanding and appreciation of local operating requirements.
A)True
B)False
Q2) Which of the following is not one of the features of the ideal procurement organizational model in the twenty-first century?
A) A flattened hierarchy for faster decision making and freer flow of ideas.
B) Requirement of having cost accounting personnel present on all cross-functional teams.
C) Increased use of center-led structures that enable consolidation of common purchases.
D) Co-location of purchasing personnel with internal customers.
E) Rotation of business managers across business units and functional groups.
Q3) If purchases are very different across business units,an argument could be made for decentralization.
A)True
B)False
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Page 7
Chapter 6: Supply Management and Commodity Strategy Development
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Q1) Which of the following is not one of the primary ways that companies create shareholder value?
A) Increase volume.
B) Reduce cost of employees (downsize).
C) Reduce cost of process and waste.
D) Reduce cost of goods and services.
E) Lower prices.
Q2) All of the following are goals for sourcing a strategic commodity except ____.
A) develop a competitive advantage
B) support and leverage the supplier's core competencies
C) develop best-in-class suppliers
D) support the company's overall strategy
E) simplification of the procurement process using electronic tools
Q3) A longer-term relationship should never include joint product development with shared development costs and intellectual property.
A)True
B)False
Q4) The strategic sourcing process ends when a contract is signed with a supplier.
A)True
B)False
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Chapter 7: Supplier Evaluation and Selection
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Sample Questions
Q1) A buyer has no greater influence even though it has a relative size advantage over the supplier or represents a larger share of the supplier's total business.
A)True
B)False
Q2) ____ are more responsive to the buying firm's changing needs and can economically make frequent smaller deliveries.
A) Local suppliers
B) International suppliers
C) Preferred suppliers
D) National suppliers
E) There is no relationship with the location of the supplier and customer responsiveness.
Q3) Suppliers seldom use trade journals to advertise their products or services.
A)True
B)False
Q4) Financial ratios can provide quick and valuable insights into a supplier's financial health.
A)True
B)False
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Chapter 8: Supplier Quality Management
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Sample Questions
Q1) Performance appraisal systems create barriers to pride in workmanship in that they promote competitive behavior and quantity over quality.
A)True
B)False
Q2) Supply management does not merely buy parts of services from suppliers; it buys (and sometimes must help manage)supplier capabilities that result in quality products and services.
A)True
B)False
Q3) The concept of ____ consists of rework and disposal efforts.
A) the hidden factory
B) Six Sigma
C) continuous improvement
D) zero defects
E) kaizen
Q4) Part of supply management's role in supplier quality management involves being a good customer to its suppliers.
A)True
B)False
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Chapter 9: Supplier Management and Development:
Creating a World-Class Supply Base
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Sample Questions
Q1) In ____,a buyer selects or develops suppliers with multiple or redundant capabilities.
A) single sourcing
B) cross-sourcing
C) global sourcing
D) strategic sourcing
E) sole sourcing
Q2) Which of the following is a disadvantage of a categorical supplier evaluation system?
A) Least reliable.
B) Cost accounting system required.
C) Less frequent generation of evaluations.
D) Most subjective.
E) Usually manual.
Q3) The administrative cost of maintaining 5,000 suppliers will be dramatically lower than the cost of maintaining a core group of 500 highly qualified suppliers.
A)True
B)False
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Page 11
Chapter 10: Worldwide Sourcing
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Q1) A major complaint about Americans is our ignorance of other cultures.
A)True
B)False
Q2) All of the following are examples of the reliable and timely information required for successful global sourcing except ____.
A) listing of existing contracts and suppliers
B) reports on supplier capabilities and performance
C) worldwide volumes by purchase type and location
D) information about potential new suppliers
E) truck traffic patterns around the supplier's facility
Q3) Countries lacking foreign exchange for payment but rich in natural resources cannot benefit from buy-back or compensation trading.
A)True
B)False
Q4) There is no dollar threshold on the Foreign Corrupt Practices Act,making it illegal to offer even a dollar as a bribe.
A)True
B)False
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Chapter 11: Strategic Cost Management
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Sample Questions
Q1) In the case of a service,____ include all costs associated with the performance of the service that are not included in the purchase price.
A) invoice costs
B) usage costs
C) acquisition costs
D) end of life costs
E) interest costs
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) Although a quantity discount has a positive effect on the purchase price,a buyer need not be cautious about the net impact on the total cost of an item.
A)True
B)False
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Chapter 12: Purchasing and Supply Chain Analysis: Tools and Techniques
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Q1) The work force factor of the learning curve refers to the ability of the worker on the job to learn and improve through repetitive effort and increased efficiency but not the effort by management to pursue productivity gains.
A)True
B)False
Q2) Each activity in PERT has three time estimates: (1)most likely,(2)pessimistic,and (3)optimistic.
A)True
B)False
Q3) In a PERT network,the difference between the ____ and the ____ is slack.
A) late finish....early finish
B) late start....late finish
C) early finish....late start
D) early start....early finish
E) None of these choices.
Q4) The primary objective of value analysis is to increase the value of an item or service at the lowest cost without sacrificing quality.
A)True
B)False
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Chapter 13: Negotiation and Conflict Management
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Q1) Before actual negotiations begin,the parties need to believe realistically that they can reach an agreement.
A)True
B)False
Q2) The purchasing cycle begins with identifying or anticipating a material need or purchase requirement for a component,raw material,subassembly,service,piece of equipment,or finished product to be sourced to support organizational operations.
A)True
B)False
Q3) A win-lose negotiation approach works best for items or services that are important to the buyer's products or business or when the item involves high-dollar items or services where cost control is critical.
A)True
B)False
Q4) E-negotiators generally ask more questions and tend to make fewer assumptions during the negotiation.
A)True
B)False
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Chapter 14: Contract Management
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Sample Questions
Q1) Long-term contracts should be written to avoid incentive or cost-sharing arrangements.
A)True
B)False
Q2) The ____ clause in a contract provides specific details on how the supplier's performance will be measured and if any compensation will be awarded by the supplier to the buyer if these certain defined levels of performance are not maintained.
A) key performance indicators and compensation
B) liability
C) notices
D) third-party rights
E) assignment and contracting
Q3) A carefully worded and prepared contract is not subject to any form of dispute or disagreement.
A)True
B)False
Q4) Escalation clauses allow only increases in the base price.
A)True
B)False
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Chapter 15: Purchasing Law and Ethics
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Q1) ____ refers to the supplier's guarantee that the goods being exchanged do not illegally violate another party's patent protection.
A) Warranty of title
B) Express warranty
C) Warranty of infringement
D) Implied warranty of fitness for use
E) Implied warranty of merchantability
Q2) Copyright law requires a formal application,as does patent law.
A)True
B)False
Q3) A purchase order can be an offer,acceptance,or counteroffer,depending on the circumstances.
A)True
B)False
Q4) In most cases,the sales representative is a general agent who can solicit orders and change price,terms,or conditions as well.
A)True
B)False
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Chapter 16: Lean Supply Chain Management
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Q1) Continuous improvement involves small,daily improvements that ensure that the process in moving forward.
A)True
B)False
Q2) ____ involves frequent deliveries of smaller quantities directly to the point of use at the buyer.
A) Lean supply
B) Lean transportation
C) Lean warehousing
D) Lean ordering
E) None of these choices.
Q3) WIP is incomplete - it has not yet been transformed to a saleable finished good.
A)True
B)False
Q4) The ability to plan material requirements accurately increases as order-cycle time lengthens.
A)True
B)False
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Chapter 17: Purchasing Services
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Sample Questions
Q1) Which of the following is not one of the disadvantages of water carrier over other modes of transportation?
A) Limited flexibility.
B) Seasonal availability.
C) Very long lead times.
D) Poor reliability.
E) Cannot be used for large volumes.
Q2) In general,supply management should provide and manage suppliers' e-catalogs.
A)True
B)False
Q3) Which of the following is not a disadvantage of using a 3PL?
A) Relinquish control, ownership, and expertise.
B) Loss of integration between sales and supply.
C) Loss of dedicated in-house managed staff.
D) Concentrate on core business activities.
E) Sacrifice key business service differentiation.
Q4) Traditional cost accounting systems are designed to systematically track and consolidate indirect spend across an organization.
A)True
B)False
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Chapter 18: Supply Chain Information Systems and Electronic Sourcing
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Q1) Before ERP,every functional area had its own set of software applications,often running on completely different systems.
A)True
B)False
Q2) Contract management and compliance provides oversight of the front end of the sourcing process.
A)True
B)False
Q3) ____ is the determination of the dollar amount and volume of expenditures that an organization makes to provide its products and services and support its operations.
A) TCO
B) Kanban
C) Price forecasting
D) Spend analysis
E) Market analysis
Q4) In ERP,all processes use unique databases,and information is captured multiple times.
A)True
B)False
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Chapter 19: Performance Measurement and Evaluation
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Q1) Because firms are increasingly focusing on cost versus price,price performance measures are no long popular.
A)True
B)False
Q2) Measurement seldom motivates and directs behavior toward desired end results.
A)True
B)False
Q3) Which of the following is not one of the benefits of benchmarking?
A) Helps identify the best business or functional practices to include in a firm's business plans.
B) Determines internal customer needs and wants.
C) Breaks down a reluctance to change.
D) Serves as a source of market intelligence.
E) Uncovers previously unrecognized technological breakthroughs.
Q4) All aspects of performance lend themselves to quantitative measurement. A)True
B)False
Q5) Measurement is virtually free.
A)True
B)False
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Chapter 20: Purchasing and Supply Strategy Trends
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Q1) The currently dominant center-led model for supply management will no longer continue be a key strategy over the next decade.
A)True
B)False
Q2) Companies are seeking suppliers with discrete capabilities that can add new types of value,and they are leveraging untapped competencies and knowledge already in the supply base for an existing category.
A)True
B)False
Q3) Lack of availability or a quality problem at a Tier 2 supplier seldom creates significant end-customer performance problems.
A)True
B)False
Q4) Overall,future purchasing and supply mission and goals will be narrower and less aligned with the strategic objectives of the firm.
A)True
B)False
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