Test Bank for Purchasing and Supply Chain Management, 8th Edition by Handfield, Monczka

Chap 01 8e

Indicate whether the statement is true or false.
1. According to Michael Porter, a firm’s value chain is composed of primary and support activities that, when
configured properly, can lead to competitive advantage.
a. True
b. False

ANSWER: True

2. Today’s emphasis on supplier quality has focused on preventing defects early in the materials-sourcing process
rather than detecting defects at the time of receipt.
a. True
b. False

ANSWER: True
3. The increase in volatility, uncertainty, complexity, and ambiguity associated with long supply chains has led to an
interest in reshoring and nearshoring.
a. True
b. False

ANSWER: True
4. Well-trained, highly-skilled employees are essential for any company’s success.
a. True
b. False

ANSWER: True
5. Supply chain management rarely requires coordination of activities that extend across organizational boundaries.
a. True
b. False

ANSWER: False
6. A firm’s supply chain is only as strong as its least-competitive supplier.
a. True
b. False

ANSWER: True
7. One of purchasing’s responsibilities is sourcing indirect goods and services required by internal groups.
a. True
b. False

ANSWER: True




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Chap 01 8e

8. Supply chain software can be grouped into two general categories: planning and execution.
a. True
b. False

ANSWER: True
9. On average, in the manufacturing sector, more than half of every sales revenue dollar goes back to suppliers.
a. True
b. False

ANSWER: True
10. During the Quiet Years (1947-Mid-1960s) of purchasing and supply chain management evolution, firms faced
stable competition and had access to abundant material. These conditions diminished the overall importance of
purchasing.
a. True
b. False

ANSWER: True
11. Strategic purchasing practices are essential for helping companies maintain their competitive positions in rapidly
changing business environments.
a. True
b. False

ANSWER: True
12. Supply management involves activities not found in traditional purchasing.
a. True
b. False

ANSWER: True
13. Few of the product features that become part of a firm’s final products originate with suppliers.
a. True
b. False

ANSWER: False
14. The formal organization chart portrays the entirety of the workings of an organization.
a. True
b. False

ANSWER: False




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Chap 01 8e

15. Today’s consumers are used to enjoying variety of product offerings, low prices, and customized services.
a. True
b. False

ANSWER: True
16. Purchasing and supply management have a major impact on product and service quality.
a. True
b. False

ANSWER: True
17. The routine ordering and follow-up of basic operational supplies is a strategic responsibility.
a. True
b. False

ANSWER: False
18. Today’s customers are very resistant to price increases and, in fact, often demand discounts.
a. True
b. False

ANSWER: True
19. D A distribution manager would be responsible for addressing product damage that occurred in handling materials
at the receiving dock.
a. True
b. False

ANSWER: False
20. For most US firms, offshoring is the most reliable source of manufactured components which consistently meet
high quality standards.
a. True
b. False

ANSWER: False
21. If a firm can’t easily raise the price of its products , maintaining long-term profits requires actively managing
costs.
a. True
b. False

ANSWER: True




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Chap 01 8e

22. The traditional approach to purchasing and supply management is to build relationships with suppliers and work
jointly to reduce costs and improve quality.
a. True
b. False

ANSWER: False
23. There are a definitive and prescriptive set of supply chain measures that provide one best way to measure supply
chain performance.
a. True
b. False

ANSWER: False
Indicate the answer choice that best completes the statement or answers the question.
24. Which of the following is an example of a purchased indirect item for a manufacturing firm?
a. Parts and components
b. Employee healthcare contracts
c. Raw materials
d. Sub-assemblies

ANSWER: b

25. For which of the of the following indices does a rating over 50 indicate economic expansion?
a. Consumer Price Index
b. Producer Price Index
c. Inflation Rate
d. Purchasing Manager’s Index

ANSWER: d
26. Which of the following technologies seeks to improve forecast accuracy, optimize production scheduling, reduce
working capital costs, shorten cycle times, cut transportation costs, and improve customer service?
a. Statistical process control software
b. Cost analysis software
c. Planning software
d. Scheduling software

ANSWER: c




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