MGSC-487 Final Exam Questions With
Correct Answers
Fair Price - CORRECT ANSWER✔✔-the lowest price that assures
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continuous supply. Fair price to one seller may be higher than a fair
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price to another for an equal item
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Fair & Just Price - CORRECT ANSWER✔✔-Accuracy in making the
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judgment depends on: past experience, knowledge of production
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processes, costs of production processes, logistics costs.
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Continuous Supply - CORRECT ANSWER✔✔-Occurs over the long-run
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only if the supplier is making a reasonable profit.
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Meaning of Cost - CORRECT ANSWER✔✔-an amount that has to be paid
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or spent to buy or obtain something
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Approaches for Establishing Price - CORRECT ANSWER✔✔-Cost
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Approach, Market Approach | |
,Cost Approach - CORRECT ANSWER✔✔-Price is a certain amount over
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direct costs and allows contribution to cover indirect costs and some
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profit. Costs classified as: variable, semi-variable, fixed.
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Market Approach - CORRECT ANSWER✔✔-Prices are set in the
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marketplace and are expected to follow a supply and demand model:
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Supply High, Cost Low. Supply Low, Cost High. Options are to live with it
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or find a way around it:
| | | | | |
• Select suppliers who have other incentives.
| | | | | |
• Substitute "like" materials
| | |
• Outsource (or insource)
| | |
• Establish long-term contracts
| | |
Government Influence on Pricing - CORRECT ANSWER✔✔-Production
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and import quotas, Regulating buyer and seller behavior, Set prices for
| | | | | | | | | | |
government run organizations. | |
Contract Terminology - CORRECT ANSWER✔✔-- Firm Fixed Price (FFP)
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- Cost Plus Fixed Fee (CPFF)
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- Cost No Fee (CNF)
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- Cost Plus Incentive Fee (CPIF)
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, Difference Between Price and Cost - CORRECT ANSWER✔✔-Cost is the
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expense that a business incurs in bringing a product or service to
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market. Price is the amount a customer pays for that product or service.
| | | | | | | | | | | | |
The difference between the price that is paid and the cost that is
| | | | | | | | | | | | |
incurred is the profit the business makes when it sells the item.
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Internal Cost Management - CORRECT ANSWER✔✔-Process
| | | | | |
improvement, Supply chain efficiencies | | |
External Cost Management - CORRECT ANSWER✔✔-Negotiation,
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Strategic Cost Management | |
Tools for Strategic Cost Management - CORRECT ANSWER✔✔-ABC
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Analysis (Pareto Analysis), Portfolio Analysis (Quadrant Analysis)
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ABC Analysis (Pareto Analysis) - CORRECT ANSWER✔✔-Dividing Total
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Spend into broad categories. "A" = High $, "B" = Medium $, "C" = Low $.
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Portfolio Analysis (Quadrant Analysis) - CORRECT ANSWER✔✔-Category
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management planning tool
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Total Cost of Ownership Model - CORRECT ANSWER✔✔-- Admin
| | | | | | | |
- Follow-up
|
- Expediting
|
Correct Answers
Fair Price - CORRECT ANSWER✔✔-the lowest price that assures
| | | | | | | | |
continuous supply. Fair price to one seller may be higher than a fair
| | | | | | | | | | | | |
price to another for an equal item
| | | | | |
Fair & Just Price - CORRECT ANSWER✔✔-Accuracy in making the
| | | | | | | | | |
judgment depends on: past experience, knowledge of production
| | | | | | | |
processes, costs of production processes, logistics costs.
| | | | | |
Continuous Supply - CORRECT ANSWER✔✔-Occurs over the long-run
| | | | | | | |
only if the supplier is making a reasonable profit.
| | | | | | | |
Meaning of Cost - CORRECT ANSWER✔✔-an amount that has to be paid
| | | | | | | | | | |
or spent to buy or obtain something
| | | | | | |
Approaches for Establishing Price - CORRECT ANSWER✔✔-Cost
| | | | | | |
Approach, Market Approach | |
,Cost Approach - CORRECT ANSWER✔✔-Price is a certain amount over
| | | | | | | | | |
direct costs and allows contribution to cover indirect costs and some
| | | | | | | | | | |
profit. Costs classified as: variable, semi-variable, fixed.
| | | | | |
Market Approach - CORRECT ANSWER✔✔-Prices are set in the
| | | | | | | | |
marketplace and are expected to follow a supply and demand model:
| | | | | | | | | | |
Supply High, Cost Low. Supply Low, Cost High. Options are to live with it
| | | | | | | | | | | | | |
or find a way around it:
| | | | | |
• Select suppliers who have other incentives.
| | | | | |
• Substitute "like" materials
| | |
• Outsource (or insource)
| | |
• Establish long-term contracts
| | |
Government Influence on Pricing - CORRECT ANSWER✔✔-Production
| | | | | | |
and import quotas, Regulating buyer and seller behavior, Set prices for
| | | | | | | | | | |
government run organizations. | |
Contract Terminology - CORRECT ANSWER✔✔-- Firm Fixed Price (FFP)
| | | | | | | |
- Cost Plus Fixed Fee (CPFF)
| | | | |
- Cost No Fee (CNF)
| | | |
- Cost Plus Incentive Fee (CPIF)
| | | | |
, Difference Between Price and Cost - CORRECT ANSWER✔✔-Cost is the
| | | | | | | | | |
expense that a business incurs in bringing a product or service to
| | | | | | | | | | | |
market. Price is the amount a customer pays for that product or service.
| | | | | | | | | | | | |
The difference between the price that is paid and the cost that is
| | | | | | | | | | | | |
incurred is the profit the business makes when it sells the item.
| | | | | | | | | | |
Internal Cost Management - CORRECT ANSWER✔✔-Process
| | | | | |
improvement, Supply chain efficiencies | | |
External Cost Management - CORRECT ANSWER✔✔-Negotiation,
| | | | | |
Strategic Cost Management | |
Tools for Strategic Cost Management - CORRECT ANSWER✔✔-ABC
| | | | | | | |
Analysis (Pareto Analysis), Portfolio Analysis (Quadrant Analysis)
| | | | | |
ABC Analysis (Pareto Analysis) - CORRECT ANSWER✔✔-Dividing Total
| | | | | | | |
Spend into broad categories. "A" = High $, "B" = Medium $, "C" = Low $.
| | | | | | | | | | | | | | |
Portfolio Analysis (Quadrant Analysis) - CORRECT ANSWER✔✔-Category
| | | | | |
management planning tool
| | |
Total Cost of Ownership Model - CORRECT ANSWER✔✔-- Admin
| | | | | | | |
- Follow-up
|
- Expediting
|
