Purchasing and Supply Management, 17e Fraser Johnson (Test Bank All Chapters, 100% original verified, A+ Grade)
Test Bank Answers At The End Of Each Chapter
Chapter 1
Student name:__________
1) Supply decisions can affect ________.
A) the balance sheet
B) the income statement
C) neither the income statement nor the balance sheet
D) the income statement and the balance sheet
E) none of the financial metrics
2) On average, the dollars spent with suppliers as a percent of revenues ________.
A) is about equal in service and manufacturing organizations
B) is greater in manufacturing organizations than in service organizations
C) is greater in service organizations than in manufacturing organizations
D) depends on the type of manufacturing process
E) depends on the type of service delivery system
3) The role of supply management is best captured by the following question:
A) How can supply and suppliers help decrease costs and increase revenues?
B) How can supply help suppliers decrease costs?
C) How can supply and suppliers help decrease costs?
D) How can supply help decrease costs and increase revenues?
E) How can supply help decrease costs?
4) To contribute to organizational strategy, the supply department should ________.
A) seek opportunities to provide competitive advantage
B) set realistic expectations for internal customers
C) execute tasks as designed
D) standardize and automate transactions
E) streamline business processes
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,Chapter 1
5) The impact of supply management actions on the balance sheet is measured by the
________.
A) return on investment effect
B) return on inventory effect
C) inventory turnover effect
D) profit-leverage effect
E) return-on-assets effect
6) Evaluation of the supply function’s contribution to organizational goals and strategies can be
viewed in the context of ________.
A) operational and strategic
B) direct and indirect
C) strategic and transactional
D) both operational and strategic and direct and indirect
E) both operational and strategic and strategic and transactional
7) The profit-leverage effect of supply savings means that ________.
A) the buyer gains leverage over suppliers when purchases are increased
B) effective price negotiations with a supplier will lower the supplier’s profits
C) a reduction in purchase spend increases profit more than an equivalent increase in
sales
D) efficient supply management processes will increase profits
E) a reduction in money tied up in inventory improves profits
8) As supply chains have become more global, the risk of supply disruptions has ________.
A) increased because emerging economies lack the business ethics of developed nations
B) increased because of financial and exchange rate fluctuations
C) stayed the same because the issues are similar wherever suppliers are located
D) decreased because risk is spread among suppliers all over the world
E) decreased because there are global standards for labor and safety
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,Chapter 1
9) Supply management may indirectly contribute to the organization’s competitive advantage by
________.
A) reducing prices paid to suppliers
B) reducing annual spend
C) improving customer satisfaction
D) improving supplier lead times
E) process standardization
10) For an organization with annual sales of $500 million, purchases of $300 million, and profit
of $50 million, a 5 percent reduction in the cost of purchases would result in a profit-leverage
effect of ________.
A) 10 percent (sales increase of 10 percent would be required to achieve the same
percentage increase in profit)
B) 15 percent (sales increase of 15 percent would be required to achieve the same
percentage increase in profit)
C) 30 percent (sales increase of 30 percent would be required to achieve the same
percentage increase in profit)
D) 60 percent (sales increase of 60 percent would be required to achieve the same
percentage increase in profit)
E) 75 percent (sales increase of 75 percent would be required to achieve the same
percentage increase in profit)
11) The supply function in public sector organizations can differ from those in private sector
organizations in the following area ________.
A) Size of total spend
B) Percentage of total spend
C) Regulatory requirements regarding the acquisition process and policies
D) Supplier lead times
E) There are no differences
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, Chapter 1
12) A systems approach to managing the flow of information, materials, and services from tiers
of suppliers through the buying organization to tiers of customers is ________.
A) strategic sourcing
B) materials management
C) procurement management
D) supply chain management
E) inventory management
13) The use of purchasing, procurement, supply, and supply chain management concepts will
vary from organization to organization depending on ________.
A) the organization’s stage of development and/or sophistication
B) the industry in which they operate
C) the organization’s competitive position
D) the organization’s stage of development and/or sophistication, the industry in which
they operate, and the organization’s competitive position
E) the organization’s stage of development and/or sophistication and the industry in
which they operate
14) Evidence of supply function growth and influence in an organization includes ________.
A) activities under the management or span of control of supply
B) number of purchase orders issued annually
C) involvement in corporate activities
D) both activities under the management or span of control of supply and number of
purchase orders issued annually
E) both activities under the management or span of control of supply and involvement in
corporate activities
15) Lean supply management principles can be applied to organizations in the ________.
A) manufacturing sector only
B) services sector only
C) manufacturing and services sectors only
D) manufacturing, services, and public sectors
E) none of the choices are correct
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Test Bank Answers At The End Of Each Chapter
Chapter 1
Student name:__________
1) Supply decisions can affect ________.
A) the balance sheet
B) the income statement
C) neither the income statement nor the balance sheet
D) the income statement and the balance sheet
E) none of the financial metrics
2) On average, the dollars spent with suppliers as a percent of revenues ________.
A) is about equal in service and manufacturing organizations
B) is greater in manufacturing organizations than in service organizations
C) is greater in service organizations than in manufacturing organizations
D) depends on the type of manufacturing process
E) depends on the type of service delivery system
3) The role of supply management is best captured by the following question:
A) How can supply and suppliers help decrease costs and increase revenues?
B) How can supply help suppliers decrease costs?
C) How can supply and suppliers help decrease costs?
D) How can supply help decrease costs and increase revenues?
E) How can supply help decrease costs?
4) To contribute to organizational strategy, the supply department should ________.
A) seek opportunities to provide competitive advantage
B) set realistic expectations for internal customers
C) execute tasks as designed
D) standardize and automate transactions
E) streamline business processes
Version 1 1
,Chapter 1
5) The impact of supply management actions on the balance sheet is measured by the
________.
A) return on investment effect
B) return on inventory effect
C) inventory turnover effect
D) profit-leverage effect
E) return-on-assets effect
6) Evaluation of the supply function’s contribution to organizational goals and strategies can be
viewed in the context of ________.
A) operational and strategic
B) direct and indirect
C) strategic and transactional
D) both operational and strategic and direct and indirect
E) both operational and strategic and strategic and transactional
7) The profit-leverage effect of supply savings means that ________.
A) the buyer gains leverage over suppliers when purchases are increased
B) effective price negotiations with a supplier will lower the supplier’s profits
C) a reduction in purchase spend increases profit more than an equivalent increase in
sales
D) efficient supply management processes will increase profits
E) a reduction in money tied up in inventory improves profits
8) As supply chains have become more global, the risk of supply disruptions has ________.
A) increased because emerging economies lack the business ethics of developed nations
B) increased because of financial and exchange rate fluctuations
C) stayed the same because the issues are similar wherever suppliers are located
D) decreased because risk is spread among suppliers all over the world
E) decreased because there are global standards for labor and safety
Version 1 2
,Chapter 1
9) Supply management may indirectly contribute to the organization’s competitive advantage by
________.
A) reducing prices paid to suppliers
B) reducing annual spend
C) improving customer satisfaction
D) improving supplier lead times
E) process standardization
10) For an organization with annual sales of $500 million, purchases of $300 million, and profit
of $50 million, a 5 percent reduction in the cost of purchases would result in a profit-leverage
effect of ________.
A) 10 percent (sales increase of 10 percent would be required to achieve the same
percentage increase in profit)
B) 15 percent (sales increase of 15 percent would be required to achieve the same
percentage increase in profit)
C) 30 percent (sales increase of 30 percent would be required to achieve the same
percentage increase in profit)
D) 60 percent (sales increase of 60 percent would be required to achieve the same
percentage increase in profit)
E) 75 percent (sales increase of 75 percent would be required to achieve the same
percentage increase in profit)
11) The supply function in public sector organizations can differ from those in private sector
organizations in the following area ________.
A) Size of total spend
B) Percentage of total spend
C) Regulatory requirements regarding the acquisition process and policies
D) Supplier lead times
E) There are no differences
Version 1 3
, Chapter 1
12) A systems approach to managing the flow of information, materials, and services from tiers
of suppliers through the buying organization to tiers of customers is ________.
A) strategic sourcing
B) materials management
C) procurement management
D) supply chain management
E) inventory management
13) The use of purchasing, procurement, supply, and supply chain management concepts will
vary from organization to organization depending on ________.
A) the organization’s stage of development and/or sophistication
B) the industry in which they operate
C) the organization’s competitive position
D) the organization’s stage of development and/or sophistication, the industry in which
they operate, and the organization’s competitive position
E) the organization’s stage of development and/or sophistication and the industry in
which they operate
14) Evidence of supply function growth and influence in an organization includes ________.
A) activities under the management or span of control of supply
B) number of purchase orders issued annually
C) involvement in corporate activities
D) both activities under the management or span of control of supply and number of
purchase orders issued annually
E) both activities under the management or span of control of supply and involvement in
corporate activities
15) Lean supply management principles can be applied to organizations in the ________.
A) manufacturing sector only
B) services sector only
C) manufacturing and services sectors only
D) manufacturing, services, and public sectors
E) none of the choices are correct
Version 1 4
