SCM 421 TOPIC 2: PURCHASING PROCESS
Not all buys are created equal; you should spend more time and effort on some
purchases than others. (T/F) - Answer -True
Which of the following is characteristic of a high importance buying category? - Answer
-You spend a lot of money on this purchased input and The input has a large impact on
the customer
Which category is high-importance, but low market complexity? - Answer -Leverage
As a purchasing professional, you should spend a lot of time managing routine buys. -
Answer -False
Which of the following would suggest a highly complex buying market? - Answer -The
technology of the purchased input is constantly changing
Capital goods are small, frequently purchased, low-dollar buys (T/F) - Answer -False
Which of the following is a direct material? - Answer -a. Cardboard for cereal boxes
What is purchase price variance? - Answer -The price difference between the amount
that you pay a supplier to buy a product and the budgeted price for the product
How does purchasing add value to operations? - Answer -Lowers costs by choosing
suppliers with reasonable prices and high quality
What happens in sales & operations planning? - Answer -Diverse functions come
together to forecast how much the company will sell, and how much it needs to make
What are the 4 steps in processing? - Answer -- Need communication
- Supplier selection
- Transaction management
- Relationship management
How do internal customers formally communicate their needs to purchasing? - Answer
-Purchase requisition
Which documents must agree for the triple-match? - Answer -PO
Invoice
Receiving report
What PO is used for recurring purchases and covering a longer period of time? -
Answer -Blanket PO
Not all buys are created equal; you should spend more time and effort on some
purchases than others. (T/F) - Answer -True
Which of the following is characteristic of a high importance buying category? - Answer
-You spend a lot of money on this purchased input and The input has a large impact on
the customer
Which category is high-importance, but low market complexity? - Answer -Leverage
As a purchasing professional, you should spend a lot of time managing routine buys. -
Answer -False
Which of the following would suggest a highly complex buying market? - Answer -The
technology of the purchased input is constantly changing
Capital goods are small, frequently purchased, low-dollar buys (T/F) - Answer -False
Which of the following is a direct material? - Answer -a. Cardboard for cereal boxes
What is purchase price variance? - Answer -The price difference between the amount
that you pay a supplier to buy a product and the budgeted price for the product
How does purchasing add value to operations? - Answer -Lowers costs by choosing
suppliers with reasonable prices and high quality
What happens in sales & operations planning? - Answer -Diverse functions come
together to forecast how much the company will sell, and how much it needs to make
What are the 4 steps in processing? - Answer -- Need communication
- Supplier selection
- Transaction management
- Relationship management
How do internal customers formally communicate their needs to purchasing? - Answer
-Purchase requisition
Which documents must agree for the triple-match? - Answer -PO
Invoice
Receiving report
What PO is used for recurring purchases and covering a longer period of time? -
Answer -Blanket PO
