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Purchasing and Supply Chain Management 3Rd Edition Benton Test Bank Full Chapter PDF
Purchasing and Supply Chain Management 3Rd Edition Benton Test Bank Full Chapter PDF
B A. Contingency planning
B. Risk mitigation
C. Loss prevention
D. Risk monitoring
E. Risk assessment
D A. Contingency planning
B. Risk mitigation
C. Loss prevention
D. Risk monitoring
E. Risk assessment
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
2
3. A commonly cited source of financial benefit from outsourcing is the vendor’s better
______________.
D A. quality
B. cost structure
C. expertise and knowledge
D. economies of scale
E. quality and technology
4. If a firm can generate nearly equal financial improvement through internal efforts as
would be realized with outsourcing, then the business case may need to be called into
question. According to a Deloitte study, many organizations could realize incremental
savings on the order of _________percent of direct labor from implementing innovative
programs such as lean production.
C A. 10 to 20
B. 30 to 50
C. 20 to 30
D. 35
E. 25
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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A A. innovate
B. advertise
C. expand
D. lower prices
E. improve quality
E A. values
B. beliefs
C. strategic plans
D. contingency plans
E. core capabilities
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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10. Only organizations that are diligent about understanding and avoiding the pitfalls of
_______________ outsourcing and that apply total business-outcome-focused
outsourcing will be successful.
C A. international
B. external
C. cost focused
D. quality focused
E. price reduction
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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12. Firms are increasingly considering more strategic “capabilities” for outsourcing, making
the strategic evaluation much more complex. They discourage firms from making
outsourcing decisions piecemeal, but rather encourage organizations to make them as
part of a __________________.
E A. contingency plan
B. strategic business plan
C. outsourcing plan
D. comprehensive production strategy
E. comprehensive sourcing strategy
13. The _____ step in the make-or-buy decision is to understand the strategic importance
(value) of the activity or system.
C A. second
B. fourth
C. first
D. fifth
E. third
B A. recruited / interviewed
B. identified / investigated
C. interviewed / selected
D. selected / qualified
E. qualified / available
15. In addition to the supplier profiles, the buying organization should clearly establish
expectations for the potential suppliers and discuss the __________ and the
_________________ for the outsourcing activity.
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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16. The success of the outsourcing initiative depends heavily on the ______________
beginning with the contract execution to the transfer of the agreed-upon activities and
resources.
17. The buying and selling organizations must follow the specific roles outlined in the
contract. The buying organization also must appoint a __________ manager. The
__________ manager and the suppliers must merge their independent plans into one
consensus plan.
B A. coordinating / coordinating
B. relationship / relationship
C. contract / contract
D. purchasing / purchasing
E. supply / supply
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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18. It is important to make sure that all ______________ feel as though their interests were
represented and considered in making the decision.
D A. employees
B. stockholders
C. managers
D. stakeholders
E. union members
19. It is crucial to treat _____________ (both survivors and those directly impacted) with
respect and dignity during the decision-making and implementation process.
B A. stakeholders
B. employees
C. managers
D. managers and employees
E. stockholders and stakeholders
20. Failing to appreciate the ___________ concerns and proactively manage them will have
an adverse impact on the outsourcing engagement.
D A. managers’
B. stockholders’
C. stakeholders’
D. employees’
E. bankers’
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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21. In order to effectively cultivate the relationship, the buying organization should be active
in _______________ performance and ____________________.
22. The ____________ establish (es) the performance measures, deliverables, due dates,
and the expected supplier requirements. Performance measurement is the cornerstone
of the buyer–supplier relationship. Without measurement there is no control. Without
control there can be no relationship to manage.
B A. negotiating team
B. original contract
C. buying organization
D. supplier
E. buyer and supplier jointly
23. Outsourcing risks include breaches in intellectual property, provider shirking, and
opportunistic renegotiation. The combination of contractual incompleteness, asset
specificity, and uncertainty gives rise to these risks when firms pursue external
sourcing. Outsourcing organizations must have a clear _____________________.
24. Traditional thinking about the most appropriate form of governance has cast the
decision as somewhat of a dichotomous choice between hierarchy (i.e., internal
sourcing) and market (i.e., external sources). Prior works have developed the image of
____________ governance as an arm’s length relationship between the customer and
the supplier organization.
E A. supplier
B. buyer
C. stakeholder
D. local
E. market
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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25. ____________ is the sum of the actual and potential resources embedded within,
available through, and derived from the network of relationships possessed by an
individual or social unit.
D A. Political capital
B. Operating capital
C. Total assets
D. Social capital
E. Cash flows
26. For long-term relationships to work, it initially requires _________________ from both
parties. Although these longer term relationships can bear significant benefits for the
customer and service provider, the road will not always be a smooth one.
A A. a strong commitment
B. a strong communications system
C. a good understanding of each other
D. a meeting of the minds
E. a pledge to work together
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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27. Equitable distribution of pain and gain will ultimately lead to __________ partnership
performance. Along with having a contract that defines performance incentives by
means of penalty and reward structures, the relationship also must be able to work
through unforeseen conditions in a productive manner.
B A. reduced
B. enhanced
C. lower
D. less
E. equal
29. It appears clear that effective buyer–supplier relationships should include a formalized
procedure for ______________ the buyer’s expectations and _____________ the
supplier’s performance.
A A. communicating / evaluating
B. setting / monitoring
C. establishing / evaluating
D. communicating / changing
E. establishing / changing
30. Outsourcing can be defined as the ___________ transfer of a business process that
has been traditionally ________________ internally to an independently owned
external service provider.
E A. date of implementation
B. agreement for the outsourcing
C. need to reduce the costs
D. desire to reduce the expenses
E. complete transfer
33. In a recent study, executives categorized their outsourcing activities. Table 9.1 in the
textbook illustrates the diverse set of outsourced activities that were reported on. Not
surprisingly, information technology outsourcing (ITO) represented the largest number
of responses at 25.8 percent. Approximately 35 percent of the responses represented
the outsourcing of some type of manufacturing activity, with the remainder being
_________________.
34. Outsourcing can be conceptualized as a _________ rather than simply an event. This
__________ begins with the development of a strategic and financial business case for
outsourcing.
C A. method / method
B. strategy / strategy
C. process / process
D. practice / practice
E. program / program
B A. plan
B. external sourcing model
C. contract
D. outsourcing model
E. internal sourcing model
36. Global business process outsourcing alone has surpassed the US$________ mark. A
recent Booz Allen report posits the expectation that U.S. business process outsourcing
will continue to grow at about _____ percent per year in the near term.
E A. 9 trillion / 12
B. 5 trillion / 9
C. 4 trillion / 11
D. 6 trillion / 8
E. 6 trillion / 10
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
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38. Another study reported similar findings from a Bain survey of large and medium-sized
firms. They found that only ____ percent of the firms were highly satisfied with the costs
they were saving, and nearly _____ percent failed to achieve cost savings expectations
D A. 5 / 44
B. 6 / 60
C. 10 / 75
D. 10 / 50
E. 12 / 50
39. a 2005 study reported that, based on the experience of the global consulting firm Booz
Allen Hamilton, they would estimate that approximately one in three outsourcing efforts
fails to achieve outsourcing expectations. These anecdotal findings suggest that there is
a troubling gap between expectations and reality; however, outsourcing is
____________.
A A. here to stay
B. being revised
C. being cut back
D. here for the next couple of years
E. fading out
D A. hidden costs
B. indirect costs
C. labor costs
D. direct operating costs
E. hidden operating costs
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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41. The cost reduction must be significantly lower than the current direct operating costs in
order for an outsourcing proposal to be attractive. The generic strategic benefits of
outsourcing are listed below with one exception. Which one is not one of the strategic
benefits?
A. True
B. False
43. While a contract is required to legally protect one’s interests, an extensive strategic
assessment and a true commitment to a cooperative relationship with the service
provider are both necessary to realize expected outsourcing benefits. These insights
offer valuable guidance to __________________ in terms of where and how
______________ should be applied.
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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44. Outsourcing initiatives must ___________. The type of management and relationship
skills and capabilities must be developed through training and/or recruitment within the
outsourcing organizations.
A A. create value
B. create profits
C. reduce costs
D. improve quality
E. create turnover
45. The cost of quality is an essential consideration in sourcing decisions. The costs
associated with ensuring quality are often categorized as:
.
E A. maintenance, innovation
B. preventative, appraisal
C. internal failure, external failure
D. All of the above
E. “B” and “C”
46. If sourcing internally, firms must estimate the costs of ________ prevention, the costs of
_____________, the cost of ___________, and the cost of ____________.
47. The buying firm will need to ensure that proper mechanisms are in place to make sure
that they are capable of detecting _____________ by an external source.
E A. delivery failures
B. quantity failures
C. safety failures
D. cost failures
E. quality failures
48. It has long been recognized in both the strategy and operations literature that the most
effective external sourcing relationships involve considerable _______________ and
____________.
C A. resources / time
B. commitment / communication
C. management time / coordination
D. management effort / two-way communications
E. management effort / relationship building
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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49. While internal coordination costs are unique to external sourcing alternatives, they must
be contrasted against the _______________ and ____________ associated with
internally sourcing a product or service.
50. In general, one can think of __________ coordination costs as those overhead
expenses incurred solely due to the decision to _________ source a product or service.
E A. internal / externally
B. external / internally
C. external / externally
D. management / internally
E. internal / internally
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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52. The relationship between higher levels of vertical integration and an increase in
bureaucratic costs has been noted in the extant academic literature. Some firms have
cast the decision to _____________ versus the decision to externally source as a
comparison between the costs of bureaucracy and the cost of _____________.
53. During the transition period, firms incur additional costs related to internal staff providing
_______________. There is usually lower efficiency and effectiveness at the beginning
of the contract.
C A. additional resources
B. advice and assistance
C. additional support and duplicate resources
D. duplicate services
E. training and advice
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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54. Moreover, Dunn and Bradstreet found that 20 to 25 percent of all outsourcing
relationships fail within __________ and nearly half fail within ____ years. This implies
that the likelihood of incurring these expenses again, or experiencing costs associated
with reinternalizing an outsourced activity, is ___________. Another critical financial
consideration with outsourcing is the impact on the ___________.
55. Some of the often “hidden costs” of outsourcing include training internal employees to
become relationship managers rather than technical managers. The hidden costs also
include ______________________________________ required to thwart labor
disputes.
56. One of the most influential factors in _______________ decisions is the coordination
requirements. Perhaps nowhere is this more evident than when considering new
product or service development.
D A. horizontal integration
B. strategic alliance
C. merger
D. vertical integration
E. acquisition
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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57. If considering international sourcing alternatives, it is important that the decision makers
develop a complete understanding of the costs involved with _____________________
____________________________________________________________.
58. Tariff rates in ______________ countries are typically less than 10 percent but can be
much higher for _________________ nations and for certain products such as
agriculture. These environmental parameters may be highly dynamic, requiring analysts
to be “on the ground” and well connected to develop a deep understanding of the
_______________.
Purchasing and Supply Chain Management, 3rd edition Copyright © 2013 W. C. Benton Jr., All rights
reserved
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59. A report by Cranfield University to the Department for Transport in England recognized
outsourcing as one of the key factors driving increased levels of ____________. The
idea of ______________ should underlie all of the previously discussed cost
categories.
60. Broadly, risk can be defined as a measure of the probability and severity of adverse
effects. One can divide risk management into four iterative phases. Which of the
following is not one of the iterative phases?
C A. contingency planning
B. risk mitigation
C. loss prevention
D. risk monitoring
E. risk assessment
61. ________________ involves answering three questions: (1) What adverse events could
happen? (2) What is the probability of these events happening? and (3) What is the
financial impact if these events occur?
E A. Contingency planning
B. Risk mitigation
C. Loss prevention
D. Risk monitoring
E. Risk assessment
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reserved
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