1) Which one of the following is a major reason for insourcing -

a)Customer service improvement

b) The need to reduce logistics costs

c) The purchase of a sole source by a competitor

d)The need to reduce inventory investment

2. A flexible or option contract is one where -

a) Buyer pre-pays the partial amount of committed volume at the agreed price in exchange for seller commits to reserve the entire full capacity

b) Buyer pre-pays the full amount of committed volume at the agreed price in exchange for seller commits to reserve the entire full capacity

c) Buyer pre-pays a relatively small fraction of the product price in exchange for seller commits to reserve a certain level of capacity

d) Buyer pre-pays the full amount of committed volume at the agreed price in exchange for seller commits to reserve a certain level of capacity

3. Which one of the following is NOT a type of study in supply research:

a) Supply processes

b) Target costing

c) Value analysis

d) Commodity studies

4. Which one of the following factors makes the supplier strategically important to the organization?

a) Capacity and flexibility to meet demand

b) Engineering and technical strengths

c) Impacts the organization's ability to achieve its strategic goals

d) Quality systems and performance

5) Which one of the following positive measures a buyer can apply to a supplier to enhance satisfaction?

a) Sharing internal information on forecasts, problems, and opportunities to invite a mutual search for alternatives

b) Willingness and ability to make rapid price, delivery, and quality adjustments in response to purchase requests without a major hassle

c) Giving notice substantially in advance of pending changes in price, lead times, and availability to allow the purchaser maximum time to plan ahead

d) Invitation to the purchaser to discuss mutual problems and opportunities

6) The major challenge of buy back contract is -

a)Reverse logistics capability and costs

b) Supply volume and variability

c)Demand volume and variability

d)Revenue sharing agreement

7) Which one of the following is an appropriate strategy for leverage materials?

a) Develop strong relationship with suppliers

b) Secure long term supply contracts

c) Reduce logistics risks with suppliers

d) Drive cost reduction by competition between suppliers

8. Which one of the following is an argument for single sourcing?

a) Long lead times

b) Stable market prices

c) Cost of duplication prohibitive

d)Large order quantities