IDIS 424 EXAM 1 QUESTIONS WITH VERIFIED
ANSWERS
If the order lead time is highly variable, then your safety stock should be bare minimum.
T/F - Answers - False
Supplier stratification is a process involving the identification of strategic suppliers
based on relevant importance. T/F - Answers - true
Which of the following is not one of the four enablers of purchasing and supply chain
management?
Sufficient cash flow and large on-hand cash deposits
Capable human resources
Proper organizational design
Right measures and measurement systems. - Answers - Sufficient cash flow and large
on-hand cash deposits
In purchasing, RFQ stands for - Answers - Request For Quotation
The variability of the lead time demand depends on
a. the variability of the lead time
b. the variability of the demand
c. both a & b
d. nothing - Answers - a & b
The purchasing cycle begins with the:
selection of an appropriate supplier
issuance of a purchase order
receipt of a supplier's acknowledgement
identification of a need. - Answers - identification of a need
In the manufacturing sector, the percentage of purchase costs to sales averages 55
percent. T/F - Answers - True
Bill of Lading protects the third party logistics (3PL) providers against wrongful
allegations of damage or loss during the shipment. T/F - Answers - True
Negotiation is preferred over competitive bidding for functional items. - Answers - False,
competitive bidding is used for functional items
Inventory Position (on-hand inventory + on order inventory - back order inventory) for
which of the following remains constant?
MRO items
, Raw Materials
Semifinished products
Production support items - Answers - MRO items remain constant because they are
assistive items and won't be final products
If the order arrives on time such that 100% of the contents ordered meet the required
specifications, then it is called the:
Right order
Fixed order
Perfect order
Best order - Answers - perfect order
Variability undermines the performance of a system in any organization. T/F - Answers -
True
The demand of a functional item has a higher coefficient of variation (CV) as compared
to CV of an innovative item. - Answers - False, innovative items have a higher CoV
A lean strategy reduces costs and waste from the supply chain, but also reduces supply
chain resilience. T/F - Answers - True
Fill rate refers to the percentage of customer orders satisfied from stock at hand. T/F -
Answers - True
Purchasing is a broader concept than supply chain. T/F - Answers - False
RFI, RFP and RFQ are primarily used by the buyers to evaluate new as well as existing
suppliers. - Answers - False
All of the following are objectives of a world-class purchasing organization except:
- develop integrated supply strategies that support business goals and objectives
- supplier performance management
- manage the sourcing process efficiently and effectively
- ensure that all hard copies of purchase orders and other paper documents are filed
correctly in a secure area. - Answers - ensure that all hard copies of purchase orders
and other paper documents are filed correctly in a secure area.
Competitive bidding can be used when the buyer does not have a preferred supplier.
T/F - Answers - True
Within the downstream portion of a supply chain, who is responsible for the actual
movement of materials between locations?
Buyer
Logistics Manager
Purchasing Manager
Supplier - Answers - Logistics manager
ANSWERS
If the order lead time is highly variable, then your safety stock should be bare minimum.
T/F - Answers - False
Supplier stratification is a process involving the identification of strategic suppliers
based on relevant importance. T/F - Answers - true
Which of the following is not one of the four enablers of purchasing and supply chain
management?
Sufficient cash flow and large on-hand cash deposits
Capable human resources
Proper organizational design
Right measures and measurement systems. - Answers - Sufficient cash flow and large
on-hand cash deposits
In purchasing, RFQ stands for - Answers - Request For Quotation
The variability of the lead time demand depends on
a. the variability of the lead time
b. the variability of the demand
c. both a & b
d. nothing - Answers - a & b
The purchasing cycle begins with the:
selection of an appropriate supplier
issuance of a purchase order
receipt of a supplier's acknowledgement
identification of a need. - Answers - identification of a need
In the manufacturing sector, the percentage of purchase costs to sales averages 55
percent. T/F - Answers - True
Bill of Lading protects the third party logistics (3PL) providers against wrongful
allegations of damage or loss during the shipment. T/F - Answers - True
Negotiation is preferred over competitive bidding for functional items. - Answers - False,
competitive bidding is used for functional items
Inventory Position (on-hand inventory + on order inventory - back order inventory) for
which of the following remains constant?
MRO items
, Raw Materials
Semifinished products
Production support items - Answers - MRO items remain constant because they are
assistive items and won't be final products
If the order arrives on time such that 100% of the contents ordered meet the required
specifications, then it is called the:
Right order
Fixed order
Perfect order
Best order - Answers - perfect order
Variability undermines the performance of a system in any organization. T/F - Answers -
True
The demand of a functional item has a higher coefficient of variation (CV) as compared
to CV of an innovative item. - Answers - False, innovative items have a higher CoV
A lean strategy reduces costs and waste from the supply chain, but also reduces supply
chain resilience. T/F - Answers - True
Fill rate refers to the percentage of customer orders satisfied from stock at hand. T/F -
Answers - True
Purchasing is a broader concept than supply chain. T/F - Answers - False
RFI, RFP and RFQ are primarily used by the buyers to evaluate new as well as existing
suppliers. - Answers - False
All of the following are objectives of a world-class purchasing organization except:
- develop integrated supply strategies that support business goals and objectives
- supplier performance management
- manage the sourcing process efficiently and effectively
- ensure that all hard copies of purchase orders and other paper documents are filed
correctly in a secure area. - Answers - ensure that all hard copies of purchase orders
and other paper documents are filed correctly in a secure area.
Competitive bidding can be used when the buyer does not have a preferred supplier.
T/F - Answers - True
Within the downstream portion of a supply chain, who is responsible for the actual
movement of materials between locations?
Buyer
Logistics Manager
Purchasing Manager
Supplier - Answers - Logistics manager
