Supply Chain Management Exam 2 Latest Update Graded A+

Supply Chain Management Exam 2 Latest Update Graded A+ The Profit-Leverage Effect states that a decrease in purchasing expenditures will directly decrease profit False. The Profit-Leverage Effect states that a decrease in purchasing expenditures directly increases profit before taxes (assuming no decrease in quality or purchasing total cost). The purchasing function is one of the most value-enhancing functions in any organization, and therefore, it is not necessary to periodically monitor the purchasing function's performance against a set of standards or industry benchmarks. False. The purchasing function in an organization is frequently responsible for Supply Management and therefore plays a large part in the amount of inventory the company holds. Outsourcing allows a firm to concentrate on core capabilities and reduce staffing levels True A purchase order is legally binding once issued by the buyer False. It becomes a legally binding contract only when accepted by the supplier. Duties, taxes, or customs imposed by the host country for imported or exported goods, are known as Tariffs True What is the term that is often used for the acquisition of services? Contracting Which of the following are the primary goals of Purchasing? - Ensure the uninterrupted flow of materials and services at the lowest total cost - Improve the quality of the finished goods produced - Optimize customer satisfaction Benefits derived from implementing an e-procurement system include all of the following: - Time savings - Real time access - Trackability Which of the following would be a good reason to outsource (buy) versus make an item? A firm lacks the technology or expertise to produce an item The sum of all costs associated with every activity in the supply stream of a product, is referred to as? Total Cost of Ownership The concept of Distributive Negotiations refers to both sides work together to maximize the outcome or create a win-win result. False It refers to a process that leads to self-interested, one-sided outcome "Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network. True An outsourcing program can result in all of the following positive outcomes: - Reducing staffing levels - Cost reduction