Question 1  In the discovery stage of the strategic sourcing plan given in the textbook, several analyses and approaches were presented to aid the decision. Which of the following was not one of those approaches?

•  Supplier surveys
•  Facility vsits
•  Trial and error
•  Third-party evaluators
•  Evaluation conference

Question 2  Which of the following is a typical consideration in favor of multiple sourcing?

•  When the technology path is uncertain
•  When just-in-time requirements require a single source
•  When significantly lower freight costs may result with a single source
•  When special tooling is required
•  When total system inventory will be reduced

Question 3  Which of the following is not a typical advantage of local buying?

•  Closer cooperation between buyer and seller is possible.
•  Shortages are less likely.
•  Delivery dates are more certain.
•  Lower prices can result from consolidated transportation and insurance.
•  Shorter lead times reduce inventory.

Question 4  If a supplier is unlikely to meet future requirements, the buying firm has several alternatives. Which is typically not one of the alternatives?

•  Assist with financing to help the supplier meet future requirements.
•  Negotiate a better price with the supplier for the current contract.
•  Assist with technological assistance to help the supplier meet future requirements.
•  Develop new sources to replace the supplier.
•  Develop the capability internally to replace the supplier.

Question 5  Which of the following is a typical consideration in favor of single sourcing?

•  To meet the customer's volume requirements
•  When special tooling is required
•  When the customer is a small player in the market for a specific item
•  To avoid complacency on the part of a supplier
•  When the technology path is uncertain

Question 6  Which of the following is not a potential problem with application of a learning curve?

•  Small payoffs compared to the work effort to include learning curves may make them unreasonable to include in an analysis.
•  The learning rates are incorrect.
•  Learning curves generally do not apply to established items.
•  Costs are more accurately forecasted.
•  Misleading data can result.

Question 7  Which of the following is not a common source of prices for a price analysis?

•  Catalog prices
•  Internet prices
•  Prices from an e–procurement system
•  Independent cost estimates
• The grapevine

Question 8  When recovering indirect costs, the textbook provides several recommendations. Which is not one of the recommendations?

•  A supply professional must understand how the supplier estimates and applies overhead.
•  Investigate whether the supplier uses outdated overhead allocation methods that no longer reflect the true costs of the products they produce and sell.
•  A small error in estimating and applying overhead can significantly affect the final cost, so look for even small errors.
• Force the supplier to use activity-based costing methods in estimating costs given in their proposals and bids.
•  A supply professional should motivate a selling firm with poor cost control to improve its system of collecting and applying costs to products.

Question 9  Which of the following is not true of direct costs?

•  Direct costs are normally the major portion of product or service costs.
•  Direct costs are usually easily traceable.
•  Direct costs generally serve as the basis for allocation of supplier overhead costs.
•  Direct costs can vary a great deal depending upon the overhead allocation basis.
•  A tiny reduction in direct costs is often worth more to the buying firm than a major reduction in the percentage of profit.

Question 10  Which of the following is not one of the six categories of cost presented in the textbook?

•  Price of goods
•  Variable manufacturing costs
•  Fixed manufacturing costs
•  Semivariable costs
•  Total production costs

Question 11  Which of the following is not a cost-type arrangement?

•  Cost reimbursement
•  Cost plus hidden charges
•  Cost plus fixed fee
•  Cost plus award fee
•  Cost without fee

Question 12  A supplier that is under an FFP contract may end up losing money and request relief. Why will the customer allow changing the price?

•  Customer did not contribute to the loss
•  Customer does not need the items
•  Customer assumes no other suppliers are available
•  Supplier has facilities that are not unique
•  Plenty of time to find a new supplier

Question 13  Which of the following is not true with respect to fixed-price redetermination (FPR) contracts?

•  An FFP is set for an initial period of the contract.
•  A redetermination (upward or downward) occurs at a stated time during the contract.
•  FPR prospective almost always occurs at the middle point in time of the contract.
•  FPR prospective is used where a fair and reasonable price can be developed for initial periods but not subsequent periods.
•  FPR retroactive is used when uncertainty exists as in the prospective, but the amount of the contract is small and the performance period is short.

Question 14  Which of the following is generally not a consideration that should impact the type of contract supply management decides to choose?

•  Unstable labor conditions
•  Enforcement problems
•  Unstable market conditions
•  Improvement in production required
•  Complexity of product or service

Question 15  Which of the following is not true of mediation?

•  If negotiation fails, the disputants can consider mediation,
•  Mediation involves introducing a third party into the discussion.
•  Mediation always results in the two parties ceasing all business dealings.
•  The mediator's role is to listen, sympathize, empathize, coax, cajole, and persuade.
•  One thing the mediator may not do is decide anything.