QUESTION 1

When determining reasons for contracting out,

	a.	cost saving is the only consideration.
	b.	a supplier that identifies trends and anticipates problems could be selected even if not the lowest cost.
	c.	a supplier that performs the organization's core competency for less due to substantial infrastructure investments could be selected.

QUESTION 2

What is the key efficiency improvement of a blanket purchase order over a basic purchase order?

	a.	Lower quantity discounts
	b.	Lower carrying costs
	c.	Lower ordering costs
	d.	Lower supplier switching costs

QUESTION 3

A motorcycle manufacturer redesigns a line of bikes to allow customers to put together a variety of gas tank styles, fenders, motors, and wheels to create models for different purposes. This exemplifies which of the following?

	a.	Integral design
	b.	Component commonality
	c.	Design for logistics
	d.	Mass customization

QUESTION 4

Supply plans should

	a.	defer discussion of risks until later planning stages.
	b.	measure costs and benefits over a base period plus costs to grow capacity over long horizon.
	c.	offer the lowest total cost solution and avoid allowing any changes that would raise costs.
	d.	prevent any level of autonomous local sourcing.

QUESTION 5

In the ideal supply chain, product design is best managed by the engineering department without input from other functions.

True

False

QUESTION 6

A manufacturer has worked extensively with a single supplier over the past 15 years, building high levels of trust. They fully share goals, strategies, and tactics with each other and attempt to reflect the partners plans in their own. Which type of relationship does this represent?

	a.	Ongoing relationship
	b.	Partnership
	c.	Collaboration/strategic alliance
	d.	Merger and acquisition

QUESTION 7

Which of the following design strategies offers streamlined production and lower purchasing costs, with a possible tradeoff between reduced design flexibility and lower quality?

	a.	Mass customization
	b.	Universality
	c.	Integral design
	d.	Component commonality

QUESTION 8

True or False? It's best to ignore the landed cost when comparing competing offshore and onshore suppliers.

True

False

QUESTION 9

A design team redesigns a line of men's footwear so that the styles and sizes are also appropriate for women. This is an example of which of the following?

		Modular design
		Component commonality
		Standardization (universality)
		Mass customization

QUESTION 10

Which of the following can an organization do if a need exists for a service with customers, the organization does not have it as a core competency, and it does not want to outsource the activity?

	a.	Develop it as a competency.
	b.	Buy on the open market.
	c.	Avoid the service.
	d.	Develop it as a non-core capacity.

QUESTION 11

Match the following four descriptions below to the appropriate supplier relationship type.

- a. b. c. d.	Long term relationship focused on the relationship itself. It may operate using blanket purchase orders. Competitors are shut out, and trust between buyer and supplier is established.
- a. b. c. d.	This type of relationship does not involve sharing extensive information and is primarily transaction based.
- a. b. c. d.	This type of relationship involves and account manager and medium-term contracts along with some information sharing.
- a. b. c. d.	In this type of relationship, suppliers are folded into the purchasing entity. Business goals are shared and competition has been eliminated.

a.	Strategic alliance
b.	Buy on the market
c.	Mergers and acquisitions
d.	Ongoing relationship

QUESTION 12

Which of the following types of components would be the most risky to outsource?

	a.	Modular
	b.	Commodity
	c.	Nonessential
	d.	Integral

QUESTION 13

All of the following are tradeoffs of mass customization, except?

	a.	the potential for quality issues if assemblers are poorly trained
	b.	costs of investing in equipment and training to allow distributors to assemble the product
	c.	less flexibility for designers
	d.	the potential for friction with distributors who don't want the added tasks associated with customization

QUESTION 14

How can a manufacturer in the plastics industry achieve lower prices via lower transaction costs when buying and selling with other companies in the plastics industry?

		By using a trading intermediary
		By using a stock exchange
		By using a vertical marketplace
		By using a horizontal marketplace

QUESTION 15

Which of the following is true of the total cost of ownership (TCO)?

	a.	TCO is primarily a tactical measurement tool.
	b.	TCO is used primarily to justify overseas outsourcing over local sourcing.
	c.	TCO compares the differences between incremental costs of alternatives.
	d.	TCO compares the costs that are the same between options.