All firms must have a purchasing department; otherwise the purchasing function cannot be performed. A. True 2. Purchasing is the managerial activity that goes beyond the simple act of buying, and which includes the planning and policy activities covering a wide range of related and implementers activities. . It is impossible for any organization to 4. In the multiple-type factory system of today, achieve its full potential without a any company generally uses two distinct successful purchasing activity. Sources of supply: inside manufacture and outside manufacture. The production b. False department is responsible for inside manufacture, including the authority to schedule production in economical quantities, and to do so far enough in advance to have materials available when needed. A. The above scenario describes: b. Purchasing as the manager of resources. Purchasing as the manager for inside manufacturing. D. Procurement as the manager of resources. E. Purchasing as the manager for outside 5. There are areas where friction may 6. Which one of the following factors does not develop between purchasing and other determine the long-run quality level off departments because of misunderstanding firm’s purchased materials. A. Creation of complete and appropriate over who should do the work. In many specifications for quality requirements. Companies the materials management form b.
Selection of suppliers having the f organization has been introduced to technical and production capability to do this friction and to the desired quality. Coordination among the c. Development of a realistic understanding materials departments. With suppliers of quality requirement and a. Minimize, improve creation of the motivation to perform b. Enhance, control accordingly. C. Maximize, deteriorate d. Monitoring a supplier’s quality/cost performance and exercise of inappropriate control. 8. The more highly standardized a firm’s 7.
The fundamental to any purchasing program is the determination of quality trials requirements are, the greater is the specification and the cost of achieving probability that materials will be readily those specifications. This is important available at a reasonable prices. Because: a. Otherwise we will not be able to determine specification. B. The purchasing program is more important than anything else. C. Quality specification and cost can affect profitability. 9. Sub-optimization happens when: 10. One company formerly used twenty-seven a.
Activities in a department made at the different kinds Of standard lubricating greases revenue of the whole. N the maintenance of its machinery. Analysis b. Activities in a department made at the showed that in some cases the same grease expense of the whole. Could be used for several different c. Activities in a department made at the applications, so they discovered that only six expense of another department. Kinds of greases were needed. The above is an d. Activities in a department made while example of: working towards a common objective. A. Finalization. B.
Simplification. C. Standardization. D. Normalization. 11. Is when you compete 12. The basic goal of any commercial activity is against the same companies you work the production and/or distribution of products cooperatively with, source from, and sell to that can be marketed at a profit. This goal is in Other venues. Achieved by the appropriate blending of what a. Cooperation. Many management authorities call the five b. Corporation. M’s: machines, men, materials, money, and c. Contemplation. Management. D. Cooperation. 13. Price is the only element of total cost. 14.
The importance of purchasing in any specific firm is determined largely by four factors, which of the following is not one of these actors? A. Availability of materials. B. Absolute pound volume Of purchases. C. Per cent of product cost misrepresented by materials. D. Types of materials purchased. 15. The classifications of work found in a 16. Which of the following is not Advantages of purchasing operation are: decentralization? A. Coordination, Buying, reorder, a. Easier coordination with operating Special research work, and Clerical departments. B. Management, Buying, Follow-up and b.
Speed of operation. Rushing, , and Clerical c. Effective use of local sources. C. Management, Buying, Follow-up and d. Plant dependence. Rushing, Special research work, and Clerical 2 17. In order for management to be able to 18. There is no difference between purchasing administer the purchasing and materials function and purchasing department. A) True management function in a professional, b) False cost-effective manner. It needs: a. Good interpersonal skills. B. Ability to identify bottlenecks. C. To acquire and develop highly competent personnel. D. Excellent computer system.