MGSC 487 EXAM 1 – GAFFNEY EXAM MOST RECENT 2026 WITH
CORRECT ACTUAL QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+
In today's "sourcing sandbox" _________ are at the center - CORRECT ANSWER-
customers
In a supply chain, information flows __________ from the customers to the suppliers/raw
materials, and materials and products flow ____________ from the materials stage to the
customers - CORRECT ANSWER-backward; forward
Supply Chain: - CORRECT ANSWER-the integration of sequentially related firms' inbound
and outbound logistics, together with operations (manufacturing and service), and
supporting information systems
Profit Leverage Effect - CORRECT ANSWER-the increase in corporate profit obtained by
decreasing purchase spend; measured by determining the increase in profit obtained by
a decrease in purchase spend (ex. in the book shows that in order to achieve increased
revenue of $6mil, the company could either increase sales by 75% or decrease purchase
spend by 10%); more realistic in firms that have neglected supply and given sales a lot of
attention already
better to dec spending than inc sales
Return on Assets (ROA) - CORRECT ANSWER-displayed as a percentage; an indicator of
how profitable a company is relative to its total assets - gives an idea as to how efficient
management is at using its assets to generate earnings (higher is better, in terms of
attractiveness to investors)
__________________________ as a percentage of total revenues is a good indicator of
supply's financial impact - CORRECT ANSWER-dollars spent with suppliers
,Increased ______________ over the last decade has increased sourcing spend
significantly - CORRECT ANSWER-outsourcing
In almost all manufacturing organizations, the __________ area represents by far the
largest single category of spend, ranging from about _____________ of revenue -
CORRECT ANSWER-supply; 50-80%
Collectively, private and public organizations in North America spend at least
________________ with suppliers - CORRECT ANSWER-$29 trillion (about 1.5 the
combined GDPs)
Evolution of the Supply Function: Early 1900s - CORRECT ANSWER-clerical and tactical,
focused on policies and procedures
key challenges: availability of supply and cost management
Evolution of the Supply Function: Early 21st Century - CORRECT ANSWER-strategy
orientation, global supply chains, executive level leadership
key challenges: sustainability, security, globalization, risk management
Supply in railroads in the 1900s: clerical - CORRECT ANSWER-recognized as an important
function, regarded by most firms as primarily a clerical activity (ADMINISTRATIVE)
Supply in WWII factories: market unlimited - CORRECT ANSWER-market was pretty much
unlimited.. not dependent on sales, so ability to obtain materials, supplies, and services
from suppliers became the key determinant of organizational success; attention was
given to the organization, policies, and procedures of the supply function; emerged as a
recognized managerial activity (TRANSPORTATION)
Supply in the 1970s: supply shortages - CORRECT ANSWER-organizations faced an
international shortage of almost all basic raw materials and a rate of price increase far
above the norm; Middle East oil embargo in 1973 intensified these issues.. put the
spotlight on supply because their ability to obtain necessary items at realistic prices
determined success or failure (NEGOTIATION)
, Supply in the 1990s: low cost labor - CORRECT ANSWER-became clear that companies
must have efficient and effective supply chain to compete in the global marketplace
(ORGANIZATIONAL STRATEGY)
Supply today: ethics, sustainability & risk - CORRECT ANSWER-the early 21st century has
brought new challenges in areas such as sustainability, supply chain security, and risk
management (BUSINESS LEADERSHIP)
Spending in the Supply Chain - CORRECT ANSWER-lead times are usually in months,
value add times as very small percentages
The ________________ case study illustrates the logistics considerations of supplying
multiple locations - CORRECT ANSWER-Qmont Mining
The 3 major perspectives on how supply contributes to organizational goals and
strategies - CORRECT ANSWER-1. operational vs. strategic
2. direct & indirect
3. negative, neutral, & positive
Operational (troubleshooter) context of supply - CORRECT ANSWER-the most familiar
context - characterized as trouble avoidance; focuses on existing current tasks as
designed (transactional, day-to-day, quality, quantity, delivery)
Strategic (opportunist) context of supply - CORRECT ANSWER-future oriented, searches
for opportunities to provide competitive advantage, strategic side focuses on new and
better solutions to organizational/supply challenges (better, faster, cheaper)
Supply savings, the profit leverage effect, and the ROA effect demonstrate the ________
contribution that supply can make to a company's financial statements - CORRECT
ANSWER-direct
Direct supply contributions: - CORRECT ANSWER-are tangible (profit leverage, higher
ROA, inventory space, headcount)
CORRECT ACTUAL QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+
In today's "sourcing sandbox" _________ are at the center - CORRECT ANSWER-
customers
In a supply chain, information flows __________ from the customers to the suppliers/raw
materials, and materials and products flow ____________ from the materials stage to the
customers - CORRECT ANSWER-backward; forward
Supply Chain: - CORRECT ANSWER-the integration of sequentially related firms' inbound
and outbound logistics, together with operations (manufacturing and service), and
supporting information systems
Profit Leverage Effect - CORRECT ANSWER-the increase in corporate profit obtained by
decreasing purchase spend; measured by determining the increase in profit obtained by
a decrease in purchase spend (ex. in the book shows that in order to achieve increased
revenue of $6mil, the company could either increase sales by 75% or decrease purchase
spend by 10%); more realistic in firms that have neglected supply and given sales a lot of
attention already
better to dec spending than inc sales
Return on Assets (ROA) - CORRECT ANSWER-displayed as a percentage; an indicator of
how profitable a company is relative to its total assets - gives an idea as to how efficient
management is at using its assets to generate earnings (higher is better, in terms of
attractiveness to investors)
__________________________ as a percentage of total revenues is a good indicator of
supply's financial impact - CORRECT ANSWER-dollars spent with suppliers
,Increased ______________ over the last decade has increased sourcing spend
significantly - CORRECT ANSWER-outsourcing
In almost all manufacturing organizations, the __________ area represents by far the
largest single category of spend, ranging from about _____________ of revenue -
CORRECT ANSWER-supply; 50-80%
Collectively, private and public organizations in North America spend at least
________________ with suppliers - CORRECT ANSWER-$29 trillion (about 1.5 the
combined GDPs)
Evolution of the Supply Function: Early 1900s - CORRECT ANSWER-clerical and tactical,
focused on policies and procedures
key challenges: availability of supply and cost management
Evolution of the Supply Function: Early 21st Century - CORRECT ANSWER-strategy
orientation, global supply chains, executive level leadership
key challenges: sustainability, security, globalization, risk management
Supply in railroads in the 1900s: clerical - CORRECT ANSWER-recognized as an important
function, regarded by most firms as primarily a clerical activity (ADMINISTRATIVE)
Supply in WWII factories: market unlimited - CORRECT ANSWER-market was pretty much
unlimited.. not dependent on sales, so ability to obtain materials, supplies, and services
from suppliers became the key determinant of organizational success; attention was
given to the organization, policies, and procedures of the supply function; emerged as a
recognized managerial activity (TRANSPORTATION)
Supply in the 1970s: supply shortages - CORRECT ANSWER-organizations faced an
international shortage of almost all basic raw materials and a rate of price increase far
above the norm; Middle East oil embargo in 1973 intensified these issues.. put the
spotlight on supply because their ability to obtain necessary items at realistic prices
determined success or failure (NEGOTIATION)
, Supply in the 1990s: low cost labor - CORRECT ANSWER-became clear that companies
must have efficient and effective supply chain to compete in the global marketplace
(ORGANIZATIONAL STRATEGY)
Supply today: ethics, sustainability & risk - CORRECT ANSWER-the early 21st century has
brought new challenges in areas such as sustainability, supply chain security, and risk
management (BUSINESS LEADERSHIP)
Spending in the Supply Chain - CORRECT ANSWER-lead times are usually in months,
value add times as very small percentages
The ________________ case study illustrates the logistics considerations of supplying
multiple locations - CORRECT ANSWER-Qmont Mining
The 3 major perspectives on how supply contributes to organizational goals and
strategies - CORRECT ANSWER-1. operational vs. strategic
2. direct & indirect
3. negative, neutral, & positive
Operational (troubleshooter) context of supply - CORRECT ANSWER-the most familiar
context - characterized as trouble avoidance; focuses on existing current tasks as
designed (transactional, day-to-day, quality, quantity, delivery)
Strategic (opportunist) context of supply - CORRECT ANSWER-future oriented, searches
for opportunities to provide competitive advantage, strategic side focuses on new and
better solutions to organizational/supply challenges (better, faster, cheaper)
Supply savings, the profit leverage effect, and the ROA effect demonstrate the ________
contribution that supply can make to a company's financial statements - CORRECT
ANSWER-direct
Direct supply contributions: - CORRECT ANSWER-are tangible (profit leverage, higher
ROA, inventory space, headcount)
