6/16/23, 4:20 PM SCM301m - Quiz 2

SCM301m - Quiz 2
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Quiz 2

Considering ethics in procurement, what is not an example of financial conflicts of

interest?

Direct financial interest in supplier company

Buying from family relatives

Buying from yourself

Taking advantage of insider knowledge

Taking advantage of research and market intelligence

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

To limit the suppliers in selection pool, procurement managers can do all of the
following except_____.

Kraljic matrix analysis

Evaluate supplier-provided information

Evaluate RFIs, RFPs, or RFQs

Financial risk analysis

Evaluate supplier performance

Clear selection

Your company is planning to purchase a piece of equipment from a contractor with

a cost plus incentive fee contract. The target cost to manufacture this machine is
$300,000 with the target fee $30,000.

The benefit/cost sharing ratio for cost overruns is 80% client/15% contractor, for
cost underruns is 60% client/40% contractor.

How much would the contractor earn if the actual cost of this machine is
$320,000? In this case, compared to a cost plus fixed-fee (10% fee), which contract
is more beneficial for your company - the buyer?

$22,000/cost plus fixed-fee contract

$22,000/cost plus incentive fee contract

$27,000/cost plus fixed-fee contract

$27,000/cost plus incentive fee contract

$33,000/cost plus incentive fee contract

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Your company needs to buy one container of furniture for your offices, which can
last for at least 5 years of use. What type of contract length is most appropriate?

Long-term contract

Short-term contract

Spot contract

All options are correct

All options are incorrect

Clear selection

Which of the following is not a form of sharp practice?

Willful use of misinformation.

Exaggerating problems.

Sharing information on competitive quotations.

Knowingly withholding information during a negotiation.

Taking unfair advantage of a supplier’s financial situation.

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

When evaluating a supplier's management capability, which question of the

following is not appropriate?

Has management committed the supplier to TQM and continuous improvement?

Is management customer focused?

What is the willingness of employees to contribute to improved operations?

Does management put a priority on supply chain management?

What is the history of labor/management relations?

Clear selection

What is MBNQA - Malcolm Baldrige National Quality Award?

An award to recognize the performance excellence at the highest level in the US

An award to certify supplier management system in the EU

An award to recognize the ethical management of a company in the US

An award to recognize the social responsibility of a company

An international award to certify the waste treatment process in production

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

What will procurement managers understand when using 5-forces methodology for
strategic sourcing?

The possibility of bargaining power of buyers or end user

The relative position towards the suppliers' markets

The downstream market

The technology advancement in shipment

All of the above

Clear selection

Continuous improvement in strategic sourcing includes all the following

except______.

Supplier relationship management

Competitive bidding

Tracking supplier performance

Post award audit and compliance

Contract management and administration

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

A/An _____ involves sending a preliminary survey to suppliers.

request for quotation

request for information

purchase order

order release

All of the above.

Clear selection

The _____ the term of the purchase agreement, the _____ firm fixed-price contracts
will be acceptable to the supplier.

shorter….less likely

longer….more likely

longer….less likely

longer….same likelihood that

There is no relationship between contract term and acceptability to the supplier.

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Which program is the formal process of verifying, usually through an intensive

cross-functional on-site audit, that a supplier’s processes and methods actually
produce consistent and conforming quality?

supplier selection and evaluation program

supplier certification/audit checklist

Six Sigma

process capability

zero defects

Clear selection

Which of the following the process of identifying potential negative events,

assessing the likelihood of their occurrence, heading off these events before they
occur or reducing the probability that they will occur, and making contingency plans
to mitigate the consequences if they do occur.

Supplier selection

Supplier evaluation

Supplier categorization

Global sourcing

Risk management

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

In a firm fixed price contract, if market prices _____ the stated contract price
because of outside factors such as competition, changes in technology, or raw
material prices, the _____ assumes the risk or financial loss.

rise above….purchaser

stay the same….seller

stay the same….purchaser

fall below….purchaser

None of the above.

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

A procurement manager is profiling the categories to prepare to source. What

should this manager do to properly complete category profile (not in a particular
order)?

1. Analyze spent-total company

2. Assess the overall industry dynamics

3. Sending suppliers emails with lists of items drafted by procurement department

to stakeholders to know what’s in and out of the category

4. Identify the current and possible suppliers of the company

5. Perform market analysis and explore category evolution to find out if there is any
technology-driven solutions to help the category

1234

2345

145

1245

1345

Clear selection

Which of the following is not a correct guideline to avoid perceived impropriety

according to ISM Code of conduct?

Discuss and actual or potential impropriety with management.

Select outside business and event venues with care to manage possible
misperceptions by the business community or others.

Encourage excessive discussion of personal matters.

Promote actions throughout the organization that alleviate the suspicion of

impropriety.

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Which of the following is not an example of entry criteria that suppliers must
achieve before continuing the next phase of the evaluation and selection process?

appropriate sales and marketing activities

financial strength

proven manufacturing or service capability

capable and supportive management

adequate facilities

Clear selection

Which of the following is not true concerning the risks of unethical behavior by a
purchasers?

The buyer pays too little for a purchased good or service.

Unethical behavior presents a personal risk to a buyer’s reputation.

Buyer who performs an unethical act runs the risk that the act is also illegal.

Sellers quickly become aware of buyers who are open to offers “on the side.”

A buyer who makes purchase decisions based on factors other than legitimate
business criteria risks the reputation of the entire firm.

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Supplier bears the highest risk in what kind of contract?

Firm-fixed price

Fixed-price with escalation

Fixed-price with incentives

Cost plus incentive fee

Time and materials

Clear selection

All of the following are criteria for assessment of supplier, except _____.

Supplier’s reputation

Quality of products or services provided

Price and payment method

Supplier’s financial risk

Supplier’s expansion strategy

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

In strategic sourcing, according to Kraljic matrix, for which item should managers
develop long-term relationships with suppliers and encourage collaboration and
innovation due to natural scarcity?

Non-critical items

Strategic items

Leverage items

Bottleneck items

Routine items

Clear selection

Which statement is not true?

Strategic sourcing is developing a proactive, holistic, and continuous evaluation and

re-evaluation to obtain the lowest possible cost

Strategic sourcing requires large investments in advanced technological platforms

and

Strategic sourcing aims for long-term procurement efficiency

Tactical sourcing doesn’t necessitate large investments in advanced technological

platforms and

Strategic sourcing includes analysis, supplier evaluation, supplier relationship

management, and detailed market research

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Which items have high complexity of risk impact?

Bottleneck and Routine

Routine and Leverage

Leverage and Strategic

Bottleneck and Leverage

Bottleneck and Strategic

Clear selection

When choosing or defining strategy going forward, all of the following are
appropriate except_____.

Define alternative strategies

Leveraging technology to obtain quotation

Incorporate new suppliers in the mix

Competitive hedging

Competitive bidding

Clear selection

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6/16/23, 4:20 PM SCM301m - Quiz 2

Which of the following is not a method used to further evaluate and select
suppliers once the initial evaluation has taken place?

Evaluation of supplier-provided information.

Supplier visits.

Use of preferred suppliers.

Trade journals.

External or third party information.

Clear selection

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