SCM 421 EXAM 1 (CH.1-6) EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.1.3 What are retail chains big enough to buy directly from manufacturers called? - (answer)National
accounts
CH.1.3 What are the six processes of the SCOR model? - (answer)Plan, Source, Make, Deliver, Return,
Enable
CH.1.3 Which one of the seven "rights" of purchasing is the most important? - (answer)Purchasing the
RIGHT supplier
CH.1.3 (T/F) Your goal as a purchasing professional should always be to get the lowest possible price? -
(answer)FALSE
CH.1.3 What is the total cost of buying, using, and disposing of an item called? - (answer)Total Cost of
Ownership
CH1.4 (T/F) Purchasing has always been considered a strategic, value-added function. - (answer)FALSE
CH.1.4 During WWII, there was an increased emphasis on purchasing's importance due to what? -
(answer)Material shortages
CH.1.4 What is one trend that has helped to make purchasing more strategic? - (answer)Outsourcing
CH.1.4 What does to mean to say "organizational boundaries are blurred" from a purchasing
perspective? - (answer)Suppliers provide innovation, not just goods and services
CH.1.5 Purchase inputs make up about what % of COGS? - (answer)Purchased inputs are about 60-80%
of COGS
CH.1.5 (T/F) Purchased goods and services are typically a firm's largest cost category. - (answer)TRUE
,SCM 421 EXAM 1 (CH.1-6) EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.1.6 (T/F) A dollar saved in purchasing nearly always has a greater impact on profit than an additional
dollar of sales revenue. - (answer)TRUE
CH.1.6 What does the profit-leverage effect measure? - (answer)It measures the amount of sales needed
to have the equivalent profit impact as a dollar of costs savings.
CH.1.6 If costs are 80% of sales (and profit is 20%), what is the amount of extra sales needed to equal
$1,500 in profit from purchasing cost savings efforts? - (answer)$7,500 ( .2 = 7500 )
CH.1.6 Where does every dollar saved in purchasing go straight to? - (answer)Net Profit
CH.1.6 What do purchasing cost reduction efforts tend to reduce? - (answer)COGS
CH.1.7 What is the return on assets (ROA) formula? - (answer)Profit Margin x Asset Turnover
CH.1.7 What is ROA if profit margin is 5% and asset turnover is 1.7? - (answer)8.5 ( 1.7 x 5 = 8.5 )
CH.1.7 (T/F) On the strategic profit model, purchasing can only impact operating costs and taxes. -
(answer)FALSE
CH.1.7 (T/F) Sales personnel have no ability to impact the strategic profit model. - (answer)FALSE
CH.1.7 What is purchasing's primary impact on the income statement (upper) portion of the strategic
profit model? - (answer)COGS
CH.1.11 Purchasers need to pay close attention to the price and quality of which purchased inputs? -
(answer)Those inputs that directly affect the customer's experience
, SCM 421 EXAM 1 (CH.1-6) EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.2.3 (T/F) Not all buys are created equal; you should spend more time and effort on some purchases
than others. - (answer)TRUE
CH.2.3 Category is of high importance but low market complexity. - (answer)Leverage
CH.2.3 Category is of low importance but high market complexity. - (answer)Bottleneck
CH.2.3 (T/F) As a purchasing professional you should spend a lot of time managing routine buys. -
(answer)FALSE
CH.2.4 (T/F) Capital goods are small, frequently purchased, low-dollar buys. - (answer)FALSE
CH.2.4 Why should purchasing personnel pay better attention to MRO purchases? - (answer)When
combined, MRO purchases often represent a large dollar spend.
CH.2.4 What is one challenge in buying capital goods? - (answer)You often need to speak "engineering"
to understand complex specifications
CH.2.4 Why can services be challenging to buy? - (answer)They are intangible,
It's hard to evaluate quality,
They are hard to classify - can be direct or indirect
CH.2.5 What is unauthorized buying by non-purchasing personnel called? - (answer)Maverick spending
CH.2.5 (T/F) Buying a larger quantity than you need to get a price break might cause additional problems,
so do this with caution. - (answer)TRUE
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.1.3 What are retail chains big enough to buy directly from manufacturers called? - (answer)National
accounts
CH.1.3 What are the six processes of the SCOR model? - (answer)Plan, Source, Make, Deliver, Return,
Enable
CH.1.3 Which one of the seven "rights" of purchasing is the most important? - (answer)Purchasing the
RIGHT supplier
CH.1.3 (T/F) Your goal as a purchasing professional should always be to get the lowest possible price? -
(answer)FALSE
CH.1.3 What is the total cost of buying, using, and disposing of an item called? - (answer)Total Cost of
Ownership
CH1.4 (T/F) Purchasing has always been considered a strategic, value-added function. - (answer)FALSE
CH.1.4 During WWII, there was an increased emphasis on purchasing's importance due to what? -
(answer)Material shortages
CH.1.4 What is one trend that has helped to make purchasing more strategic? - (answer)Outsourcing
CH.1.4 What does to mean to say "organizational boundaries are blurred" from a purchasing
perspective? - (answer)Suppliers provide innovation, not just goods and services
CH.1.5 Purchase inputs make up about what % of COGS? - (answer)Purchased inputs are about 60-80%
of COGS
CH.1.5 (T/F) Purchased goods and services are typically a firm's largest cost category. - (answer)TRUE
,SCM 421 EXAM 1 (CH.1-6) EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.1.6 (T/F) A dollar saved in purchasing nearly always has a greater impact on profit than an additional
dollar of sales revenue. - (answer)TRUE
CH.1.6 What does the profit-leverage effect measure? - (answer)It measures the amount of sales needed
to have the equivalent profit impact as a dollar of costs savings.
CH.1.6 If costs are 80% of sales (and profit is 20%), what is the amount of extra sales needed to equal
$1,500 in profit from purchasing cost savings efforts? - (answer)$7,500 ( .2 = 7500 )
CH.1.6 Where does every dollar saved in purchasing go straight to? - (answer)Net Profit
CH.1.6 What do purchasing cost reduction efforts tend to reduce? - (answer)COGS
CH.1.7 What is the return on assets (ROA) formula? - (answer)Profit Margin x Asset Turnover
CH.1.7 What is ROA if profit margin is 5% and asset turnover is 1.7? - (answer)8.5 ( 1.7 x 5 = 8.5 )
CH.1.7 (T/F) On the strategic profit model, purchasing can only impact operating costs and taxes. -
(answer)FALSE
CH.1.7 (T/F) Sales personnel have no ability to impact the strategic profit model. - (answer)FALSE
CH.1.7 What is purchasing's primary impact on the income statement (upper) portion of the strategic
profit model? - (answer)COGS
CH.1.11 Purchasers need to pay close attention to the price and quality of which purchased inputs? -
(answer)Those inputs that directly affect the customer's experience
, SCM 421 EXAM 1 (CH.1-6) EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
CH.2.3 (T/F) Not all buys are created equal; you should spend more time and effort on some purchases
than others. - (answer)TRUE
CH.2.3 Category is of high importance but low market complexity. - (answer)Leverage
CH.2.3 Category is of low importance but high market complexity. - (answer)Bottleneck
CH.2.3 (T/F) As a purchasing professional you should spend a lot of time managing routine buys. -
(answer)FALSE
CH.2.4 (T/F) Capital goods are small, frequently purchased, low-dollar buys. - (answer)FALSE
CH.2.4 Why should purchasing personnel pay better attention to MRO purchases? - (answer)When
combined, MRO purchases often represent a large dollar spend.
CH.2.4 What is one challenge in buying capital goods? - (answer)You often need to speak "engineering"
to understand complex specifications
CH.2.4 Why can services be challenging to buy? - (answer)They are intangible,
It's hard to evaluate quality,
They are hard to classify - can be direct or indirect
CH.2.5 What is unauthorized buying by non-purchasing personnel called? - (answer)Maverick spending
CH.2.5 (T/F) Buying a larger quantity than you need to get a price break might cause additional problems,
so do this with caution. - (answer)TRUE
