1) What is considered to be a fair price in purchasing?

	a	A fair price must agree with the total costs of ownership
	b	A fair price must satisfy the target costing
	c	A fair price must be the lowest price on the supply market
	d	A fair price must include a reasonable profit for the supplier

2) Which one of the following is an argument for multiple sourcing?

a) Resources required for supplier relationship management

b) JIT, stockless buying or systems contracting

c) Easier to schedule deliveries

d) Avoid supplier dependence on one customer

3) Which one of the following is a major risk of outsourcing -

a Increase in costs

b Loss of intellectual property

c Loss of control

d Deterioration in customer service

4) Which one of the following negative measures a supplier can apply to a buyer to improve satisfaction?

a) Unilateral price increases without notice

b) Refusal to send invoice

c) Sharing operational information

d) Refusal to accept shipments

5) Which one of the following is a valid way to discharge a contract -

Assignment

Consideration

Substitution

Duress

6) A purchase order becomes a legally binding contract when -

The supplier accepts the purchase order

The supplier accepts the Incoterms

The supplier accepts the quality specifications

The supplier accepts the purchasing price

7) In a cost sharing contract, the buyer agrees to -

Share some production costs in exchange for supplier to produce more volume

Share some production costs in exchange for supplier to produce less volume

Share some material costs in exchange for supplier to produce more volume

Share some material costs in exchange for supplier to produce less volume

8) Which of the following is NOT considered an unethical practice -

Requesting bids from unqualified suppliers solely to drive down prices from qualified suppliers

Not compensating a supplier for design or other work

Use of misinformation and exaggerating problems

Receiving an award from supplier for innovation

9) Which one of the following is a condition for successful competitive bidding?

		Bidders can work together to agree on a bid price
		Bidders must determine the specifications
		It must be a sellers market
		There must be sufficient number of qualified bidders