BUAD 331 EXAM 5 TEST PAPER 2026
QUESTIONS SOLUTIONS GRADED A+
◉ You are a supply manager at a large US bank and you are
responsible for buying marketing and creative services (advertising,
etc.). The marketing services category represents a substantial
amount of procurement spend and the suppliers that compete in
this industry tend to have very different capabilities. Consider the
Kraljic matrix and classify this purchase.
A. Leverage item.
B. Bottleneck item.
C. Strategic item.
D. Non-critical item.
E. None of these are the appropriate classification for this
component.. Answer: C. Strategic item.
◉ The purchasing function contributes to the type and bottom line
of an organization.
A. True
B. False. Answer: A. True
◉ Which of the following is generally NOT true about supply
management and the bottom line (net profit to the firm)?
,A. Purchased items account for a large percentage of the cost of
goods sold. Hence, a reduction in cost of purchased goods has a
major impact on the bottom line
B. A Euro increase in sales is equivalent to a Euro decrease in
materials cost in impacting the bottom line
C. Outsourcing can allow firms to focus on their core competencies,
possibly reducing waste, which then has the potential to improve the
bottom line
D. A dollar saved in materials cost is usually considered a dollar
increase in net income, which directly translates into bottom line
savings
E. All of the above are true.. Answer: B. A Euro increase in sales is
equivalent to a Euro decrease in materials cost in impacting the
bottom line
◉ As a category specialist, you need to develop expertise on which
of the following?
A. Price
B. Data retrieval
C. Puzzles
D. Availability
E. A and D only. Answer: E. A and D only
◉ Top line contributions by the purchasing function include which
of the following?
,A. Cost cutting
B. Supply base reduction
C. Leveraging
D. Involvement in new product development
E. All of the above. Answer: D. Involvement in new product
development
◉ _________ is part of the supply chain involved in managing the
forward and reverse flow and storage of goods, services, and related
information between the point of origin and the point of
consumption to meet customers' requirements.
A. Procurement
B. Logistics
C. Transportation
D. Negotiation. Answer: B. Logistics
◉ Which mode of transportation is best used to transport each of
the products listed below?
Heavy construction equipment:
Short distance consumer finished goods:
Long distance containerized goods:
High value good:
, Petroleum or mineral slurry:. Answer: Heavy construction
equipment: Rail
Short distance consumer finished goods: Motor
Long distance containerized goods: Water
High value good: Air
Petroleum or mineral slurry: Pipeline
◉ What invention by Malcolm McLean revolutionized how products
are shipped at reduced cost, considered a key facilitator of global
trade?
A. Drones
B. Driverless trucks
C. TARS from the movie Interstellar
D. Shipping containers
E. Forklifts. Answer: D. Shipping containers
◉ Based on similar cost and service characteristics, which mode of
transportation is the biggest competition for an inland water
transport?
A. Truck
B. Pipeline
C. Rail
D. Air
QUESTIONS SOLUTIONS GRADED A+
◉ You are a supply manager at a large US bank and you are
responsible for buying marketing and creative services (advertising,
etc.). The marketing services category represents a substantial
amount of procurement spend and the suppliers that compete in
this industry tend to have very different capabilities. Consider the
Kraljic matrix and classify this purchase.
A. Leverage item.
B. Bottleneck item.
C. Strategic item.
D. Non-critical item.
E. None of these are the appropriate classification for this
component.. Answer: C. Strategic item.
◉ The purchasing function contributes to the type and bottom line
of an organization.
A. True
B. False. Answer: A. True
◉ Which of the following is generally NOT true about supply
management and the bottom line (net profit to the firm)?
,A. Purchased items account for a large percentage of the cost of
goods sold. Hence, a reduction in cost of purchased goods has a
major impact on the bottom line
B. A Euro increase in sales is equivalent to a Euro decrease in
materials cost in impacting the bottom line
C. Outsourcing can allow firms to focus on their core competencies,
possibly reducing waste, which then has the potential to improve the
bottom line
D. A dollar saved in materials cost is usually considered a dollar
increase in net income, which directly translates into bottom line
savings
E. All of the above are true.. Answer: B. A Euro increase in sales is
equivalent to a Euro decrease in materials cost in impacting the
bottom line
◉ As a category specialist, you need to develop expertise on which
of the following?
A. Price
B. Data retrieval
C. Puzzles
D. Availability
E. A and D only. Answer: E. A and D only
◉ Top line contributions by the purchasing function include which
of the following?
,A. Cost cutting
B. Supply base reduction
C. Leveraging
D. Involvement in new product development
E. All of the above. Answer: D. Involvement in new product
development
◉ _________ is part of the supply chain involved in managing the
forward and reverse flow and storage of goods, services, and related
information between the point of origin and the point of
consumption to meet customers' requirements.
A. Procurement
B. Logistics
C. Transportation
D. Negotiation. Answer: B. Logistics
◉ Which mode of transportation is best used to transport each of
the products listed below?
Heavy construction equipment:
Short distance consumer finished goods:
Long distance containerized goods:
High value good:
, Petroleum or mineral slurry:. Answer: Heavy construction
equipment: Rail
Short distance consumer finished goods: Motor
Long distance containerized goods: Water
High value good: Air
Petroleum or mineral slurry: Pipeline
◉ What invention by Malcolm McLean revolutionized how products
are shipped at reduced cost, considered a key facilitator of global
trade?
A. Drones
B. Driverless trucks
C. TARS from the movie Interstellar
D. Shipping containers
E. Forklifts. Answer: D. Shipping containers
◉ Based on similar cost and service characteristics, which mode of
transportation is the biggest competition for an inland water
transport?
A. Truck
B. Pipeline
C. Rail
D. Air
