Supply Organization

Answer the following Questions:

1. The activities handled by the supply function vary from firm to firm, but they are alike
within the same industry.
a. True b. False

2. One measure of professional involvement is the extent to which supply is expected to

take part in major corporate activities.
a. True b. False

3. Today's supply management activities are limited to the traditional buying activities.
a. True b. False

4. Supplier participation in cross-functional sourcing teams is highly required regardless of

the nature of the assignment.
a. True b. False

5. In some organizations, purchasing activities are limited to ………………….

a. Non Production items
b. Nontraditional items
c. Production related materials
d. Capital items
e. None of the above

6. …………………. Consist of personnel from multiple functions on a supply related task

a. Sourcing teams
b. New product development teams
c. Commodity management teams.
d. All of the above
e. None of the above

7. Sourcing teams are permanent teams that are formed when expenditures are high and
the commodity is complex and important to success.
a. True b. False

8. Rigid functional structures have been replaced by a greater dependence on

………………….
a. Centralized structure

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b. Decentralized structure
c. Cross functional teams
d. Hybrid structure
e. none of the above

9. Professional involvement means that parties outside the supply group are willing and
able to take supply considerations into account in managing their own areas of
responsibility
a. True b. False

10. Supply structure must be aligned with ………………….

a. Corporate structure
b. Corporate supply
c. Organization size
d. All of the above
e. None of the above

11. …………………. Means that authority and responsibility for most supply related functions
assigned to a central organization.
a. Centralization
b. Decentralization
c. Hybrid
d. All of the above
e. None of the above.

12. …………………. Means that authority for supply related functions dispersed throughout
the whole organization.
a. Centralization
b. Decentralization
c. Hybrid
d. All of the above
e. None of the above

13. Centralization refers to ………………….

a. Where spending decision are made
b. How decision are executed
c. Where the supply staff are located
d. All of the above
e. None of the above

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14. …………………. Means authority and responsibility shared between a central
organization and other functional areas.
a. Centralization
b. Decentralization
c. Hybrid
d. All of the above
d. None of the above

15. Easier communication and coordination is one of the supply centralized structure
advantages.
a. True b. False
16. …………………. Develop commodity strategies, identify potential supplier capabilities
and determine prices.
a. Sourcing and commodity management
b. Materials management
c. Supply research
d. Administration
e. None of the above

17. …………………. Group manages the contract after it is signed, directs the flow of
materials and services from the supplier and keeps track of the supplier's delivery and
quality commitment.
a. Sourcing and commodity management
b. Materials management
c. Supply research
d. Administration
e. None of the above

18. …………………. Are spend categories that have typically been managed outside of the
purchasing and supply management process
a. Nontraditional purchases
b. Traditional purchases
c. Purchasing research
d. Capital purchases
e. None of the above

19. The items acquired by the supply group vary from organization to organization and
items are added or deleted depending on circumstances in the buying organization.
a. True b. False

20. Example of supply involvement in major corporate activities ………………….

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a. Mergers and acquisitions
b. New facility planning
c. New product development
d. Cost reduction initiative
e. All of the above

21. …………………. Requires the supply function to act as recorder, sender of purchase
orders or receiver of bids.
a. Professional involvement
b. Meaningful involvement
c. Documentary involvement
d. No involvement
e. All of the above

22. Meaningful involvement implies that supply professionals have the opportunity to
exercise their expertise in important acquisition process stages
a. True b. False
23. One of the supply teams' critical success factors is ………………….
a. All functional areas involved in up-front planning, shared leadership roles, and role
flexibility.
b. Reducing total costs for the members through lower prices, higher quality, and better
services.
c. Eliminating and avoiding all real and perceived violations of antitrust regulations
d. All of the above
e. None of the above

24. …………………. Is a team that mainly focus on a wide range of projects including
developing cost reduction strategies, performing value analysis, identifying consolidation
requirement.
a. Sourcing team
b. Commodity management team
c. New product development team
d. Consortia
e. None of the above

25. …………………. Is a team that operate concurrently rather than sequentially and consist
of functional groups usually design, engineering, manufacturing, quality assurance
working all together simultaneously.
a. Teams with customers
b. Sourcing team

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c. Commodity management team
d. New product development team.
e. None of the above

26. Intellectual property issues and confidentiality are perhaps the biggest obstacles to
supplier participation when new product design is involved.
a. True b. False

27. Teams with customer participation may provide great opportunities to deliver the
greatest value in the shortest cycle time.
a. True b. False

28. …………………. develops and implements commodity strategies aimed at achieving the
lowest total cost of ownership (i.e. consolidation of requirements, supplier quality
certification, cost savings projects, and management of supplier relationships) and used
when expenditures are high and the product is critical to success.
a. Teams with customers
b. Sourcing team
c. Commodity management team
d. New product development team.
e. None of the above

29. Co-location of supply with internal customers leads to better understanding of the
goal, strategies and challenges of each group.
a. True b. False

30. Co-location of suppliers in the buying organization can improve ………………….

a. Buyer-seller communications and processes
b. Reduce administrative and sales costs
c. Absorb work typically done by the firm's employees
d. None of the above
e. All of the above

31. ……………… allow suppliers to be proactive participants in the supply management

activities at the buying firm.
a. Supply councils
b. Supplier councils
c. Teams with suppliers
d. Co-location of suppliers in the buying organization
e. None of the above

32. ……………… used as means of sharing information among decentralized units or in

coordinating activities.

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a. Purchasing councils
b. Supply councils
c. Co-location of supply with internal customers
d. Teams with customers.
e. None of the above

33. ……………… a form of collaborative purchasing used by public and private sector
organizations to a wider range of service at a lower cost.
a. Pooling
b. Consortia
c. Mergers
d. Acquisition
e. None of the above

34. ……………… one of consortia's barriers where collaboration might be viewed as

anticompetitive
a. Bureaucracy
b. Antitrust issues
c. Complexity
d. Confidentiality
e. None of the above

35. ……………… refers to the loss of control and reporting relationships were concerns
a. Equality
b. Uncertainty
c. Governance
d. Complexity
e. All of the above

36. Standardizing materials, capital and services bought and the processes used to procure
them can reduce cost, prices and inventories
a. True b. False

37. One of the supply management goals is to keep inventory investment and loss at
minimum
a. True b. False
38. Supply managers can accomplish their goals and objectives without effective
cooperation with the appropriate individuals in other functional areas.
a. True b. False

39. ……………… One of the supply chain activities that includes implementing and managing
key supplier relationships and partnerships as well as developing strategies that use the
supply network to provide value to end customers
a. Supply chain management

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b. Nontraditional purchases
c. Outsourcing and subcontracting
d. Inventory control
e. None of the above

40. ……………… a supply chain activity that includes evaluation of potential suppliers and
negotiating contracts.
a. Outsourcing and subcontracting
b. Inventory control
c. Purchasing / buying
d. Purchasing research
e. None of the above

41. ……………… a supply chain activity that includes creating contracts, supply agreements
and managing key purchasing processes related to supplier selection and evaluation
a. Purchasing/buying
b. Forecasting and planning
c. Disposal
d. Transportation
e. None of the above

42. ……………… include accounts payable, cost management, legal material management,
logistics, quality and supply budget management
a. Internally focused activities
b. Externally focused activities
c. Supplier focused activities
d. Customer focused activities
e. all of the above

43. ……………… include inbound logistics, supplier development, raw material procurement
for supplier.
a. Internally focused activities
b. Externally focused activities
c. Supplier focused activities
d. Customer focused activities
e. Competitor focused activities

44. ……………… include outbound logistics, involvement with new business development
and new product development and programs.
a. Internally focused activities
b. Externally focused activities
c. Supplier focused activities
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d. Customer focused activities
e. Competitor focused activities

Answers
Statement Answer Statement Answer Statement Answer
1 B 16 A 31 B
2 B 17 B 32 A
3 B 18 A 33 B
4 B 19 A 34 B
5 C 20 E 35 C
6 D 21 C 36 A
7 B 22 B 37 A
8 C 23 A 38 B
9 B 24 A 39 A
10 D 25 D 40 A
11 A 26 A 41 A
12 B 27 A 42 A
13 A 28 C 43 C
14 C 29 A 44 D
15 B 30 E