chap03.doc

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Department
Supply Chain Management
Course
33:799:301
Professor
spiegel
Semester
Fall

Description
Chapter 3—Creating and Managing Supplier Relationships TRUE/FALSE 1. In order to maintain a shared vision, the buyer alone should establish the objectives of the partnership, which must then be fulfilled by the actions of the supplier. ANS: F PTS: 1 2. The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as TCO, which stands for total cost of ownership. ANS: T PTS: 1 3. The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as EMS, which stands for total cost of ownership. ANS: F PTS: 1 4. When evaluating a supplier it is not possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to inventory. ANS: F PTS: 1 5. When using a weighted-criteria evaluation system with five or more categories, vendors should be ranked based on their score in the two highest weighted categories, the others should be discarded. ANS: F PTS: 1 6. Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for suppliers to follow. ANS: T PTS: 1 7. ISO 14000 is a series of international standards for environmental management. ANS: T PTS: 1 8. Smoother processes, faster cycle times, reduced new product development, and improved time-to- market are possible benefits from the increased visibility that is offered by SRM software. ANS: T PTS: 1 9. In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to total more than 1.00 and less than 100. ANS: F PTS: 1 10. In a TCO system, certification and training of suppliers would be considered post-transaction costs. ANS: F PTS: 1 11. In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs. ANS: T PTS: 1 12. A comprehensive SRM strategy would likely include dedicated supplier managers, processes that would help in establishing standardized best practices, and the utilization of tools that would help gather and evaluate results. ANS: T PTS: 1 13. Smoother processes, faster cycle times, reduced new product development, and improved time-to- market are possible benefits from the increased visibility that is offered by TCO software. ANS: F PTS: 1 14. The Hormel company awards their Hormel Food Corporation's No. 1 Award to their top supplier, but only give out the award every five years. ANS: T PTS: 1 MULTIPLE CHOICE 1. Which of the following is important in developing successful relationships in a partnership? a. Commitment by top management b. Interpersonal relationships between employees of the companies c. Mutual/compatible needs that result in a win-win situation for the partners d. All of these ANS: D PTS: 1 2. Which of the following is NOT important in developing a successful strategic alliance? a. Developing performance metrics b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Investigating the capabilities and core competencies of the supplier d. Open lines of communication that both promote sharing and secure confidentiality ANS: B PTS: 1 3. Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these ANS: B PTS: 1 4. Which third party certification was adopted by the European Union in 1992 that has caused US suppliers wishing to stay competitive in European Union countries to get certified? a. ISO 14000 b. ISO 9000 c. European Supplier Certification Initiative (ESCI '92) d. EU Third Party Initiative ANS: B PTS: 1 5. Direct benefits of ISO 14000 include: a. Reduced defect rates b. Improved on-time delivery rates c. Reduction of pollution emission d. All of these ANS: C PTS: 1 6. The acronym SRM refers to: a. Supplier Requisition Monitoring b. Supplier Relationship Management c. Shipment Response Monitoring d. Supply chain Relationship Management ANS: B PTS: 1 7. SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these ANS: D PTS: 1 8. Which of the following is TRUE? a. SRM software modules are very affordable (less than $50,000) and can be implemented with a week. b. ISO 75000 is the supplier award given to the highest rated supplier in Japan. c. The key to successful partnerships is developing performance measures with weights greater than 3.50. d. Continuous improvement and change management are both keys to building successful partnerships. ANS: D PTS: 1 9. A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.20), Cost(0.50). The scores for each category are shown below. Which of the following companies has the highest total score? a. Company A: Quality(90), Delivery(80), Cost(60) b. Company C: Quality(70), Delivery(80), Cost(80) c. Company B: Quality(70), Delivery(90), Cost(80) d. All companies scored the same. ANS: C PTS: 1 10. A company using a weighted-criteria evaluation system has established these 5 categories and the appropriate weight in parentheses: Quality (0.30), Responsiveness (0.20), Delivery (0.20), Cost (0.20), Technology (0.10). Company X received the following ratings in each of the five categories: Quality(90), Responsiveness(80), Delivery(80), Cost(90), Technology(90). What is their total score? a. 87.0 b. 85.5 c. 86.0 d. 84.0 ANS: C PTS: 1 11. Costs associated with supplier certification, investigating alternative suppliers, and investigating alternative delivery options can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these ANS: A PTS: 1 12. According to the textbook, which of the following companies utilizes a supplier development program called Supplier Continuous Quality Improvement (SQDI) focused on improving the quality of the goods and services purchased and minimize the time needed to inspect incoming products? a. Target b. Boeing c. Intel d. General Motors ANS: C PTS: 1 13. According to the textbook, which of the following companies utilizes the Crown of Excellence Supplier Recognition Program which motivates its suppliers to constantly improve and in turn strengthens the relationship between supplier and buyer? The program rewards advancements in quality, cost, security & technology, and delivery & service. a. Phillip Morris b. General Motors c. Tesco d. Motorola ANS: D PTS: 1 14. A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.40), Cost(0.30). The scores for each category are shown bel
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