WEEK 12 TRUE OR FALSE

1. TRUECustomers are now demanding to be treated as individuals, and requiring their supply partners to
provide them with configurable, solutions-oriented bundles of products, services, and information custom
designed and priced to meet a specific want or need.

2. TRUEToday’s customer is simply demanding more control over the buying experience; easy to use order
management tools that empower them to design their own solutions and flawless and speedy fulfillment.

3. FALSE/DOWNSTREAM Integrators stand at a pivotal point in the supply chain and, depending on channel
strategies, sell to several types of upstream buyers.

4. FALSE/INTERNAL The demand on the supplying integrator from an external customer is accorded the same
level of importance as demand from an internal customer.

5. FALSE/LARGE Distributors normally acquires products in small lot sizes in a finished or semi-finished state
from either an integrator or another intermediary higher up in the supply channel.

6. TRUE The function of retailing is to acquire and deliver finished products and services directly to the end-
customer for their personal, non-business use.

7. TRUE In hybrid selling, the producer selectively performs some of the customer management functions
while surrendering control of the remaining activities to sell-side channel partners.

8. TRUE Regardless of the channel system that emerges, companies need to be very clear as to who is the
targeted customer or customer group.

9. FALSE/LOWEST COST What customers want from their suppliers are complete solutions to their wants and
needs that create superior value at the highest cost attained with the maximum in effort and time expended.

10. TRUE One of the central goals of customer management today is to convert the top and as many of the
second tier of customers as possible into lifetime customers.

11. TRUE the greater the proportion of lifetime customers, the less the long-term total costs of marketing and
sales.

12. FALSE/EASIER the longer customers do business with a supplier, the harder it is for marketers to create
unique product, pricing, discounting, and other offerings targeted at retaining and enriching their relationships
with their best customers.

13. TRUE As customer-supplier relationships grow, marketers can expect lifetime customers to increase their
purchase of company products and services.

14. TRUE a profitable customer as a person, household, or company that over time yields a revenue stream
that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing that
customer.

15. TRUE When customers have a good experience with suppliers they are likely to buy from those suppliers
again and again.
16. TRUE Companies must focus on increasing value to the customer, by viewing the business and its offerings
through the wants and needs of the customer.

17. FALSE/INITIAL COST Customers receive economic value when they leverage a product or service to
generate additional value beyond the total cost.

18. TRUE Intangible factors have a significant effect on customers’ perception of product or service value.

19. TRUE Customers have come to measure value based, not only on the products and services, but equally on
the experiences they receive when they interact with a supplier.

20. TRUE Customers want suppliers to provide them with a complete solution to their problems. A partial
solution is no solution.

21. FALSE/DISCONNECTED Suppliers need to provide a complete solution where the customer expects to find
it without having to merge connected sources.

22. TRUE Customer-focused management requires nimble supply chains that quickly adapt to provide unique
product and service solutions that are low-cost and capable of rapid change.

23. TRUE Understanding the customer is fundamental to a customer-centric focus.

24. TRUE An effective customer management program should be tireless in the search for opportunities for
enhancing customer experiences.

25. FALSE/MUTUAL the goal of relationship building is to develop customer loyalty or even exclusive
dependence that results in the emergence of a lifetime customer.

26. TRUE Marketing automation is a module within CRM that enables companies to compile, search, and utilize
customer databases to define and segment who the customer is.

27. TRUE The demand for additional ways of using modern technology to expand customer relationships is
driving refreshed or expanded integration and usage of all areas of CRM software.

28. TRUE The goal of CRM is the development of lifetime customers by enabling the organization to optimize
each customer’s experience at each supply channel interaction point.

29. TRUE Customers are won by personalizing the communication between seller and buyer.

30. TRUE Service performance must also be measured by the satisfaction of the internal customer.
Week 13

1. TRUE Purchasing is defined as the body of integrated activities that focuses on the
purchasing of materials, supplies, and services needed to reach organizational goals.

2. FALSE/PRODUCT FLOW Service flow is accelerating the physical movement of goods from
the supply source to the point of consumption.

3. FALSE/SERVICE FLOW Product flow is increasing value-added services that improve

productivity and eliminate costs such as Internet order placement, advanced shipping
notices, order status tracking, electronic transfer of payables and receivables, bar coding,
packaging, and delivery

4. FALSE/ PROJECT OR PRODUCT the purchasing organization is structured around

three general approaches: commodity or function, supplier management and matrix.

5. FALSE/ DECENTRALIZED APPROACH A centralized approach to purchasing is more

effective if an enterprise offers a wide range of products but segregates them by
geographical region.

6. FALSE/INCREASES As the total value of purchasing decreases, pursuit of total inbound

transportation and carrying cost economies of scale dictate that purchasing functions be
located centrally.

7. TRUE By centralizing purchasing, buyers obtain larger discounts and cheaper inbound
transportation.

8. TRUE The need to develop an effective enterprise procurement strategy is testament to

the impact purchasing has on the business’s competitive positioning.

9. FALSE/LOW Items in the Generics quadrant are characterized as of high strategic

value and high cost to the organization.

10. FALSE/LOW Products classified as commodities are possessing high acquisition cost, but
are often important for the production of assemblies and finished goods.

11. TRUE Products in the critical quadrant are items that are of high risk and high value.

12. TRUE The goal of business reviews is to integrate the long-range business plans and
supply chain requirements of buyer and supplier.

13. TRUE Strategic sourcing involves finding and building ongoing relationships with supply
partners that
account for the majority of an organization’s purchasing spend.
14. FALSE/SRM CRM enables buyers to lock in those suppliers that provide the business’s
critical components and finished goods.
15. FALSE/ PRICE ANALYSIS The pricing decision contains three elements: value
analysis, cost analysis, and total cost of ownership.

16. TRUE Negotiation is the process by which a buyer and a supplier agree upon the conditions
surrounding the purchase of an item.

17. FALSE/PRICE IS QUALITY An important objective beyond quality is price.

18. FALSE/ SPECULATIVE BUYING In forward buying, buyers purchase goods and services
beyond current requirements.

19. FALSE/FORWARD BUYING Speculative buying utilizes medium to long-term inventory planning
to purchase goods and services in excess of current requirements.

20. TRUE Effective B2B enables the delineation of the parameters determining the
dependencies that exist between a series of procurement process steps.

21. TRUE By partnering with suppliers, companies gain access to resources and skills necessary to
make their businesses grow

22. TRUE Close supplier relationships lead to better advertising and increased access to
new market channels.

23. TRUE Effective sourcing seeks to increases the availability of high quality materials and
components by working closely with suppliers’ production and delivery processes.

24. FALSE/LONG-TERM Effective sourcing seeks the establishment of short-term contracts with
suppliers locking in price and transportation costs.

25. TRUE TCO is defined as the present value of all costs associated with a product,
service, or capital equipment that are incurred over its expected life.
MULTIPLE CHOICE

1. Four types of purchasing EXCEPT

A. Goods purchased for consumption or conversion
B. Goods purchased for resale
C. Maintenance, Repair, and Operating (MRO) inventories and services
D. Customer equipment and services
2. All are true about goods purchased for consumption EXCEPT
A. goods in this category are the concern of industrial buyers
B. consist of raw materials, semi-finished, and finished components
C. goods are often sold to customers
D. critical to this category are quality, cost and delivery objectives
3. All are false about goods purchased for resale EXCEPT
A. In this category buyers determine what goods their customers want
B. Products are specially designed to meet specific needs
C. Items in this category include general supplies
D. Goods purchased in this category are purchased only once or periodically
4. All are false about MRO inventories and services EXCEPT
A. Include items as wood, metals, coal and petroleum
B. Goods in this category require additional processing
C. These are specialty items and services
 D. Goods in this category are used for general operating activities
5. This high value-added activity is concerned with matching purchasing requirements
with sources of supply, ensuring continuity of supply.
A. Value analysis
B. Sourcing
C. Purchasing and Receiving
D. Contracting
6. Purchasing responsibilities does NOT include
A. Materials management
B. Sourcing
C. Supplier development
D. External integration
7. Three critical flows of the supply channel EXCEPT
A. Product flow
B. Information flow
C. Service flow
D. Cash flow
8. The functions of the traditional purchasing department are divided into following
distinct activities EXCEPT
A. Clerical
B. Buying
C. Status reporting and expediting
D. Sourcing
9. Identifying less expensive goods and services used as substitutes at comparable quality
and value is an example of
A. Sourcing
B. Value analysis
C. Purchasing
D. Cost management
10. All are true about cost management EXCEPT
A. Continuous search for ways to reduce administrative costs while increasing
value
B. Improvement includes purchase cost reduction program
C. Stockless purchasing contracts
11. All are Purchasing key objectives EXCEPT
A. Providing an uninterrupted flow of materials and services
B. Purchasing products competitively
C. Provide consistent, quality purchased materials and services
D. Developing people resources and information tools for product optimization
12. Buyer role EXCEPT
A. Negotiate supplier agreements
B. Execute changes to Negotiation when pricing volume is significant issue
C. supplier agreements
 D. Negotiates quality agreements
E. Manages inventory investment
13. Planner role EXCEPT
A. Executes day-to-day buying
B. Reduces order and transportation cost
C. Plans new product introduction
D. Performs value analysis
14. All are NOT buyer role EXCEPT
A. Communicates requirement schedule
B. Explores alternative sourcing
C. Work daily with suppliers
D. Reviews receiving quality rejects
15. All are true about centralized purchasing EXCEPT
A. buyers obtain larger discounts and cheaper inbound transportation
B. remove duplication in buying
C. better coordinate purchasing requirements through the application of
computerized software
D. greater speed in item replenishment

16. All are true about decentralized purchasing

EXCEPT
A. Increased responsiveness to the customer
B. Use and development of local sources
C. efficiently utilize scarce resources among competing facilities
D. supplier visibility to special product features, services, or transportation needs
17. The objective of this step is to provide purchasing management with a complete
understanding of how they are to support the business’s and, by extension, the supply
chain’s competitive strategy
A. Strategic Mapping
B. Environmental Scanning
C. External evaluation
D. Strategic evaluation
18. The goal of this activity is to reveal the content of such work elements as the
sophistication of existing purchasing controls and technologies used in order
management
A. Strategic Mapping
B. Environmental Scanning
C. Inventory strategy
D. Strategic evaluation
19. . The goal of this activity is to quantify costs, purchasing staff effort, and requirements for
new technologies
A. Strategic Mapping
B. Environmental Scanning
C. Inventory strategy
 D. Strategic evaluation
20. NOT a condition impacting make/buy decisions
A. Degree of operational change
B. Production improvement control
C. Risk management
D. Quality
21. Purchased items in this quadrant are characterized as of low strategic value and low cost
to the organization
A. Generics
B. Commodities
C. Distinctives
D. Critical
22. When used in production, these components often provide competitive distinctiveness to
the finished product and cannot be easily substituted for or omitted from the final
product configuration.
A. Generics
B. Commodities
C. Distinctives
D. Critical
23. These products are also increasingly being sourced through the Internet to attain low
cost while ensuring timely delivery
A. Generics
B. Commodities
C. Distinctives
D. Critical
24. Products in this quadrant are normally of high risk to competitive strategy, but are
low in the value they provide to finished goods
A. Generics
B. Commodities
C. Distinctives
D. Critical
25. Products in this quadrant are classified as possessing low acquisition cost, but are
often important for the production of assemblies and finished goods
A. Generics
B. Commodities
C. Distinctives
D. Critical
26. Activities in developing the purchasing technology strategy EXCEPT
A. Determine level of current technologies
B. Explore technologies that link product development and supplier capabilities
C. Real-time communication of designs and specifications.
D. Establish real-time analytics and scoreboards
27. This activity centers on broadening buyer and supplier collaboration EXCEPT
A. Collaborative sharing of information
B. Mutual responsibility for total quality management.
C. Computerized networking for design and enterprise planning
D. Development of supplier contracts focused on long-term quality and mutual
benefits.
28. The objective of continuous improvement and performance measurement techniques are
realized by the following EXCEPT
A. Purchasing and producing defect free products and materials: Quality
B. Managing the inherent disruptions in the supply chain: Risk Management
C. Reducing product, process, and channel costs: Productive Improvement
D. Exploiting time to create competitive advantage: Technology
29. Strategic sourcing enables the purchasing organization to pursue the following objectives
EXCEPT
A. Ensure reliable quality and delivery of materials
B. Reduce supply risk
C. Establish a smaller, more flexible, more responsive supplier base
D. Closely integrate supplier output to product development and innovation

30. This level of relationship is characteristic of traditional purchasing.

A. Transactional
B. Ongoing relationship
C. Partnership type relations
D. Strategic alliances
31. All are true about Strategic alliances EXCEPT
A. long-term arrangement between buyer and seller that is driven more by
agreements than by contracts
B. entail common goals and long-term purchasing plans
C. level of trust is high, and both parties are sincerely involved in fostering mutual
success
D. buyer and supplier seek to coordinate their business plans with each other to
gain mutual competitive
32. All are false about partnership type relations EXCEPT
A. content of the relation is specified in a long-term contract which normally contains
a significant commitment to exclusivity
B. Buyers and suppliers normally seek to solidify the relationship by negotiating
medium- term contracts
C. joint investment in research and development
D. entail common goals and long-term purchasing plans
33. NO ANSWER LAHAT TAMA Strategic alliances provide the following benefits EXCEPT
A. Adds value to the organization
B. Enables strategic growth
C. Enables strategic growth
D. Strengthens operations
34. Mr. Marlon Adriano an appliance component manufacturer specializing in household
kitchen appliances team up with Mr. Arthur Cruz a manufacturer of kitchen appliances to
gain access to new market segments. This is an example of
A. Increasing market share
B. Strengthening operations
C. Increasing organizational expertise
D. Enhancing financial strength
35. The pricing decision contains three elements EXCEPT
A. Price analysis
B. Cost analysis
C. Total cost of ownership
D. Financial analysis
36. A price analysis usually involves examination of a supplier’s price bid by comparing it
with reasonable price benchmarks, techniques include the following EXCEPT
A. Comparison with multiple, qualified bids attained independently from
suppliers whereby the lowest offer does not enjoy an unfair advantage over
the competition.
B. Comparison of bids with prices set by law or regulation, catalog, or the current
market.
C. Comparison with systematic quotes and prices for the same or similar
product or service.
D. Comparison with an independent cost estimate that is fair and reasonable.
37. Common forms of supplier discounts EXCEPT
A. Sales promotion
B. Quantity discounts
C. Volume discount
D. Cash discount
38. This form of discount is given to the buyer to compensate for performing various
marketing functions for the seller
A. Trade promotion
B. Quantity discounts
C. Volume discounts
D. Seasonal Discounts
39. This form of discount results in price reductions based on the size of the order
quantity and monetary value of the items purchased at one time
A. Trade promotion
B. Quantity discounts
C. Volume discounts
D. Seasonal Discounts
40. This form of discount is based on cost reduction resulting from economies of scale in
production
A. Trade promotion
B. Quantity discounts
C. Volume discounts
 D. Seasonal Discounts
41. This type of discount is determined by negotiations relating to the terms of buyer
payment
A. Trade promotion
B. Quantity discounts
C. Volume discounts
D. Cash Discounts
42. This form of discount is based on the seasonal nature of goods or services. The buyer
may be able to get a reduced price on the item by purchasing it when it is off-season
A. Trade promotion
B. Quantity discounts
C. Volume discounts
D. Seasonal Discounts
43. Companies using e-commerce procurement have realized the following benefits EXCEPT
A. Increased market supply and demand visibility.
B. Price benefits from increased sales
C. Enhanced customer management
D. Synchronized supply chain networks

44. Companies using e-commerce procurement have realized the following benefits EXCEPT
A. Increased operational efficiencies
B. Efficient payment transfer
C. Improved supply chain collaboration
D. Impact on profit
45. B & D These types of digital marketplaces act as hubs servicing a single industry
A. Buyer-driven e-marketplaces
B. Vertical exchanges
C. Horizontal exchanges
D. Vertical exchanges
46. All are true with buyer driven e-marketplaces EXCEPT
A. These exchanges work by aggregating a variety of industry-specific product
B. Enable companies to facilitate internal procurement by linking, through Internet
tools
C. Requisitions are automatically routed for approval
D. Orders are placed and tracked through the Web portal
47. B2B applications require the following technology support services EXCEPT
A. Web Processing
B. Platform
C. Member Services
D. Content Search and management
st
48. 1 statement: e-Procurement focuses on leveraging Web applications to reduce tactical
costs and increase efficiencies and is primarily focused on non-strategic, indirect
materials. 2nd statement: e-sourcing is focused on supplier sourcing, contracts and
RFQs, and supplier
 partnership management driven by real-time Internet networking focused
primarily on strategic production and distribution inventories.
A. Both statements are correct
B. Both statements are wrong
C. 1st statement is correct, 2nd statement is wrong
D. 1st statement is wrong, 2nd statement is correct
49. Transport mode performance characteristics that drive transportation selection
decision EXCEPT
A. Dependability
B. Capability
C. Frequency
D. Flexibility
50. This characteristic refers to the ability of the transport mode to move inventory
from one location to another without the use of other modes
A. Completeness
B. Dependability
C. Capability
D. Speed