Texas A&M University (TAMU) IDIS 424 Purchasing Applications in Distribution Exam 1 Practice Test

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• What is the purpose of post-purchase performance evaluation?
• Relatively small cost reductions gained in the acquisition of materials can have a _______ impact on profits than ________ improvements in other cost-sales areas of the organization.
• What ethical considerations arise in vendor selection and avoidance of conflicts of interest?
• You can have a greater impact on profit by a small decrease in COGS compared to an increase in sales because of ________.
• How should procurement handle supplier disputes and contract enforcement?
• Information flows in a supply chain occur in which directions?
• What is a key benefit of e-procurement systems?
• MRO stands for?
• NOT a classification of Goods and Services?
• What is the primary aim of managing the purchasing process efficiently and effectively?
• According to the Leverage Principle, small cost reductions gained in the acquisition of materials can have a greater impact on profits than equal improvements in which areas of the organization?
• Dispute resolution in collaborative relationships is characterized by?
• A purchase requisition involves dealing with a purchasing department and which internal party?
• Which of the following is not a valid way to decrease purchasing costs?
• What is Purchasing Integration?
• Which statement describes a common drawback of Just in Time systems?
• Which procurement practice helps manage risk through supplier diversification and scenario planning?
• Which of the following is NOT a reason suppliers offer quantity discounts?
• Which statement best describes Pull Supply Chain Management?
• Economic Order Quantity (EOQ) is primarily used to balance which two costs?
• What does regression/forecasting in procurement data analytics do?
• Cost of Goods refers to which amount?
• Element identifying cost center on requisition?
• Which objective focuses on maintaining a continuous supply chain and reliable sources?
• How do supplier payment terms and early payment discounts impact cash flow?
• Total cost of ownership (TCO) typically includes which of the following costs?
• Which statement best describes demand sensing?
• Blanket Purchase Order is used for
• Which of the following is a benefit of a blanket purchase order?
• What is the primary purpose of safety stock in inventory management?
• The statement 'I should use the purchase requisitions form to get information from suppliers' is true or false.
• Which flow deals with monetary transfers in the supply chain?
• Which option describes two-way communication with suppliers focused on problem solving?
• What is the largest and most important asset in a company?
• RFI stands for
• What is single sourcing risk and how can it be mitigated?
• Purchasing is a significant player in which type of management?
• What is a supplier development program and its objectives?
• Which step follows evaluating potential suppliers?
• What concept represents the cost of the next best alternative and should be included in total cost of ownership analysis?
• All of the following describe collaborative buyer-seller relationships EXCEPT:
• Which is NOT a typical element of Buyer-Seller Relationships?
• Which of the following is a characteristic of buyer-seller relationships?
• Which statement describes a drawback of Just in Time?
• Which factor is a core consideration in a make vs buy decision in distribution?
• Which of the following is not one of the supply chain's four flows?
• High inventory holding costs generally impact a company's total cost of ownership by causing what?
• Which activity is listed under the purchasing functional responsibilities related to supplier interactions?
• Which of the following is NOT a drawback of Just-In-Time inventory management?
• Which statement best differentiates 3PL and 4PL in distribution outsourcing?
• RFQ process is typically used to solicit quotes from new suppliers.
• What is the definition of total cost of ownership?
• In supplier selection criteria, which factor is commonly considered?
• Define Total Cost of Ownership (TCO) in procurement.
• What is the aim of supplier quality management in relation to the cost of quality?
• Which scenario is least aligned with the Newsvendor model?
• In Incoterms, which term indicates risk transfers at the port of shipment?
• Which discount type applies only to units ordered above a specific price tier?
• Which statement best describes Push Supply Chain Management?
• Which statement reflects the effect of JIT on supplier relationships?
• Which is not a 5 right?
• Which cost is typically included in total cost of ownership but not in the simple purchase price?
• What is the purpose of cycle counting in inventory management?
• Product flows from which entity to which entity?
• True or false: Opportunity cost is included in the total cost of ownership.
• Which option is included as one of the supply chain's four flows?
• Competitive bidding is preferred when which condition applies?
• Total Cost of Ownership is defined as which of the following?
• How do collaborative relationships handle marketplace adjustments?
• Which statement best describes evaluation criteria in RFP vs RFQ?
• Under EOQ assumptions, which condition makes EOQ most cost-effective?
• Competitive bidding would be a preferred option when a purchaser is buying a luxury car from a specific brand.
• Which statement describes inventory characteristics under Just in Time?
• Holding costs are typically a function of which factor?
• Which of the following is true about Just-in-Time scheduling regarding information sharing?
• Which term describes the costs of bringing production to the buyer's location, including sourcing, administration, freight, and taxes?
• Which option best describes the relationship described by Just-In-Time supply?
• Obstacles that inhibit collaboration include which of the following?
• RFP stands for
• What is the first step in the purchasing process?
• Which practice supports reliable supplier performance through risk monitoring and contingency planning?
• Which of the following are characteristics of Just-In-Time supply?
• The EOQ formula balances which two cost components?
• Which of the following does not describe a pull system?
• Which of these is not a reason suppliers offer quantity discounts?
• In collaborative relationships, how is quality typically ensured?
• Which is NOT an inventory related cost?
• Which item is not typically included in Total Cost of Ownership calculations?
• Update supplier performance scorecard purpose
• What describes communication in collaborative relationships?
• Which factor would cause the EOQ model to be less accurate?
• Which statement best describes Lean SCM?
• Which of the following is not a usage cost?
• Purchasing is moving toward which role?
• In ABC analysis, items are classified by annual consumption value. Which statement is most accurate?
• Which statement best describes the primary purpose of evaluating total cost of ownership?
• Which statement best describes how ABC analysis informs stocking decisions?
• Which term describes the net salvage value after subtracting obsolescence, disposal, cleanup, and project termination costs?
• A quantity discount allows a buyer to do which of the following?
• Which items are included in the Services category?
• Which statement distinguishes RFP from RFQ?
• Which statement about blanket purchase orders is not true?
• Which supply chain concept best matches the idea of 'Make all we can just in case'?
• What is the primary purpose of a purchase order?
• Which option correctly describes information sharing in Just in Time?
• Which principle explains that small reductions in COGS can have a larger effect on profits?
• Which statement best describes the standard assumptions of the EOQ model?
• Which description best characterizes reverse logistics handling?
• Strong relationships with other functional departments are built through which approach?
• Which of the following is NOT a procurement KPI?
• Which of the following is an example of Capital Equipment?
• Which activity is part of the purchasing functional responsibilities?
• How do blanket orders relate to release schedules and planned quantities?
• Develop Supply Base Management aims to...
• In supplier selection, which factor best aligns with reducing overall procurement costs?
• What is Vendor Managed Inventory (VMI)?
• Which of the following is not a drawback of Just-in-Time supply schedule?
• What are common types of quantity discounts and how do you decide to leverage them?
• What are benefits and challenges of using e-procurement systems?
• What is the purpose of spend analysis?
• Which SCM approach minimizes waste by producing only what is needed when it is needed?
• Safety stock using service level approach formula?
• Which sequence correctly represents the lifecycle of a purchase order from creation to payment?
• Which ethical consideration is emphasized in procurement practices?
• Which of the following is not traditionally considered one of the five rights in purchasing?
• Which statement best describes how EOQ treats price discounts?
• Distinguish between price analysis and cost analysis in supplier negotiations.
• Which item is included in import/export compliance documentation?
• End-of-Life salvage accounting considers net salvage value after accounting for which costs?
• What is the purpose of a procurement card (P-card) and what controls are typically needed?
• What are the four flows of supply chain management?
• Which of the following is a key step in the distribution procurement process?
• Which procurement practice best mitigates supply chain risk by using multiple suppliers and contingency planning?
• Which discount type applies to every unit in the order?
• A blanket order is best described as?
• Bidding is a way to decrease purchasing cost.
• Which statement correctly describes the direction of product flow?
• A Request for Quotation would typically be sent to new suppliers.
• What is SKU rationalization and why is it important in distribution?
• Which responsibility involves determining the method of awarding purchase contracts?
• Push SCM is associated with which mindset?
• Why is purchasing important?
• Which statement about purchasing is correct?
• Which of the following is not a major task of the purchasing process?
• Element specifying when material is needed?
• In a basic total cost of ownership model, which item is typically not included?
• Which scenario would most likely increase total cost of ownership for a purchased item?
• Which item is NOT typically included in a supplier scorecard?
• Which statement best describes how purchasing should relate to organizational strategy?
• Raw Materials example
• Which element is included in a purchase requisition?
• Which statement about life-cycle cost estimation is true?
• Which ranking method is commonly used for cycle counting accuracy assessment?
• Which statement is true about using EOQ in procurement?
• Competitive bidding is preferred when:
• In Collaborative Buy-Seller Relationships, the evolution of Joint Improvement Efforts moves from what to what?
• It is uncommon to modify the purchase order to reflect a new price or discount.
• Capital Equipment includes which of the following?
• To minimize the cost impact of expediting, which approach is recommended?
• For continuous review, how is reorder point calculated?
• Blanket Purchase Order
• Which of the following is not a purchasing objective?
• Which statement best describes Economic Order Quantity (EOQ)?
• What costs are included in the cost of quality in procurement?
• In collaborative relationships, what describes the outcome of cost savings?
• Which costs are considered inventory related costs?
• Opportunity cost is the cost of the next best alternative.
• What are common strategies for lead time reduction (LTR) in purchasing?
• Which statement is NOT an assumption of the EOQ model?
• What is a key risk associated with Just-In-Time inventory management when supply is disrupted?
• Which supplier selection factor is most directly tied to total cost of ownership?
• What best defines Supply Chain Management?
• Which of the following is a risk of VMI for a buyer?
• Which statement about total cost of ownership (TCO) is most accurate?
• Which statement about opportunity costs is true?
• Which of the following is not a drawback of Just-In-Time inventory management?
• How is a supply chain defined?
• What is BATNA in negotiation?
• What is a weighted scoring model used for?
• In a blanket purchase order, the delivery date is typically open.
• Supply chain management is a ______ management of 2 way movement and coordination of goods, services information and funds from raw material through the end user.
• In the reorder point formula, what does Demand rate represent?
• You must choose between 3 suppliers. Which factor will help determine which supplier to buy from?
• When evaluating suppliers for sustainability, which factor is least relevant?
• All of the following characterize Just-in-Time supply scheduling EXCEPT:
• Which of the following is NOT one of the five rights of purchasing?
• What is purchasing?
• When would you use the Newsvendor model in procurement?
• Which of the following is NOT one of the obstacles to building closer buyer-seller relationships?
• Which costs are part of total cost of ownership?
• Which formula represents the order cost?
• In Incoterms, which term places the buyer bears all costs after the seller's location?
• Which of the following is not a factor to be considered in total cost of ownership?
• Which flow is not among the four flows of supply chain management?
• Negotiation is preferred when:
• Which is a characteristic of Just in Time supply scheduling?
• In Collaborative Buy-Seller Relationships, which statement describes open exchange of information?
• In total cost of ownership analysis, which cost category tends to dominate for products with long lifecycles and high maintenance requirements?
• Which of the following is NOT a consideration in global sourcing?
• What do Incoterms define?
• Bidding is a way to decrease Purchasing Cost.
• Which items are classified as Production Support Items?
• Which cost would be considered a holding cost in inventory management?
• Process flows move from which to which?
• Which activity is a core purchasing function and must be performed with suppliers?
• Information flows occur between which entities?
• What is a functional responsibility of purchasing?
• Acquisition costs include which of the following costs?
• Usage Costs include which items?
• How does demand variability affect EOQ cost benefits?
• What data analytics techniques are useful in procurement?
• Which term describes a discount that is applied due to a tiered purchase quantity?
• What is demand sensing and how does it differ from forecasting?
• Opportunity costs should be included in TCO analysis because they represent which of the following?
• Which statement best describes a collaborative buyer-seller relationship?
• Holding cost is best described as which of the following?
• In safety stock calculation, what does the z-score represent?
• Which of the following is NOT typically included in a supplier scorecard?
• Which factor is considered in transportation mode selection?
• Which of the following is NOT a listed way to decrease purchasing costs?
• Which is not one of the responsibilities of the purchasing department?
• Which of the following is one of the five rights of purchasing?
• What is the main difference between supplier lead time and order cycle time?
• Production Support Items classification
• Which statement is true about integrated purchasing strategies?
• Which KPI best captures a supplier's ability to deliver components on schedule?
• Which component is included in a supplier development program?
• What is the lead time reduction strategy that involves the supplier managing inventory?
• Which of the following is not a carrying (holding) cost component?
• Explain Incoterms and give examples of FOB and CIF responsibilities.
• Which term describes the goal of an uninterrupted flow of high-quality materials to support internal customer requirements?
• Which of the following is a characteristic of Just-in-Time scheduling?
• Which flow involves the movement of information in the supply chain?
• Which risk is primarily associated with global sourcing and often mitigated through hedging?
• What best describes the interaction between demand forecasting and procurement?
• Which of the following best describes why total cost of ownership is used in purchasing decisions?
• Which statement describes Just in Time Scheduling?
• The statement 'To increase profits you must decrease cost of goods sold' is true or false.
• Subassemblies and semi-finished products are categorized under which term?