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QUESTION NO:20
In a manufacturing stockless inventory program, the purchased raw material physically enters purchased goods inventory at which of the following times?
A. Five days before it is needed
B. One day before it is needed
C. At the time of delivery
D. Never, since it becomes work in progress or goods shipped
Answer: D
QUESTION NO:19
In an environment where time to market is critical, it is MOST beneficial to do which of the following?
A. Computerize the quotation system via EDI
B. Have selected suppliers use on-site consignment warehousing
C. Develop two suppliers for every part to assure availability
D. Work jointly with a supplier on the design
Answer: D
QUESTION NO:4
Purchasing should clearly understand the intended use of an item in order to determine if the description given in the purchase request is adequate and accurate. If there is any question, purchasing management should
A. solicit a better description from the user
B. revise the description to conform to market terminology
C. substitute a comparable item
D. refuse to process the request
Answer: A
QUESTION NO:16
To source a part presently made in-house, which of the following actions would be LEAST appropriate?
A. Soliciting manufacturing\’s approval to ensure future cooperation
B. Obtaining accurate specifications for the item to be purchased
C. Developing a good understanding of present true internal costs
D. Developing a list of potential sources from which to solicit
Answer: A
QUESTION NO:21
Which of the following is MOST suitable for an item that is: 1) used continuously at varying rates; 2) used by only one department within the organization; and 3) a low-cost, high-volume item that is requisitioned frequently?
A. Bill of material
B. Purchase order
C. EDI
D. Systems contract
Answer: D
QUESTION NO:25
A request for bids using an approved products list is an example of what type of solicitation?
A. Two-step bidding
B. Restricted competition
C. Alternate proposals
D. Competitive proposals
Answer: B
QUESTION NO:34
Of the following, the MOST meaningful indicator of an individual firm\’s trend of profitability is the
A. change in after-tax return on average invested capital
B. change in average profit margin on the product line
C. period-to-period change in cost of goods sold
D. earnings per share of common stock
Answer: A
QUESTION NO:14
Which of the following is LEAST likely to be a driver of purchases of standard materials that are common and in repetitive use?
A. Bill of material
B. Commitment of funds
C. Production plan
D. Internal customer order
Answer: B
QUESTION NO:31
Which of the following factors generally has NO bearing in a supplier performance rating system?
A. Quality
B. Delivery
C. Past price
D. Service
Answer: C
QUESTION NO:10
Which of the following is NOT a solution to the “classic” small order problem?
A. The electronic transmission of orders
B. Competitive bidding
C. Blanket orders
D. Purchase order drafts
Answer: B
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