

Strategic Sourcing and Procurement
Exam Solutions
Course Introduction
This course explores the principles and practices of strategic sourcing and procurement within modern organizations. Students will learn to evaluate supplier markets, develop sourcing strategies, and manage supplier relationships to achieve cost savings, quality improvements, and innovation. Emphasis will be placed on the procurement process, negotiation techniques, contract management, risk assessment, and the impact of technology and globalization on sourcing decisions. Real-world case studies and analytical tools will be used to illustrate how effective sourcing and procurement contribute to an organizations overall competitive advantage.
Recommended Textbook Operations Management Managing Global Supply Chains 1st Edition by Ray R. Venkataraman
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29 Chapters
2890 Verified Questions
2890 Flashcards
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Page 2

Chapter 1: Introduction to Managing Global Operations and Supply Chains
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Sample Questions
Q1) If we look back in history and reflect on the great civilizations,we can find early examples of production accomplishments in ______.
A)China
B)the United States of America
C)Austria
D)Bangladesh
Answer: A
Q2) Contracting with a third party or an external company to manufacture a good or deliver a service is known as ______.
A)offshoring
B)outsourcing
C)domestic production
D)internalization
Answer: B
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Chapter 2: Operations and Supply Chain Strategies
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Sample Questions
Q1) In 2011,an earthquake and subsequent tsunami shut down the Fukushima Dai-ichi nuclear power plant in Fukushima,Japan,for months.This is an example of ______.
A)an unforeseen event that can disrupt operational and supply chain activities
B)the success of contingency planning
C)the quick response by the Japanese government in rescue operations
D)the need for ISO intervention
Answer: A
Q2) Companies successful in integrating their operations and supply chains globally possess which of the following capabilities?
A)supply chain adaptability
B)ability to divest a business
C)ability to follow the dictates of corporate strategy
D)strict adherence to ISO requirements
Answer: A
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Chapter 3: Project Management
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Sample Questions
Q1) Which of the following is not an example of a project?
A)82,000 bottles of Coca-Cola bottled during a single shift
B)Apple's creation of the new iPad
C)Bechtel's construction of a large-scale chemical refining plant in South Africa
D)the construction of the Hoover Dam
Answer: A
Q2) In a Gantt chart,the time to complete a project can be estimated by ______.
A)the average of the longest duration for each sequenced activity
B)adding the lengths of the longest individual legs of each sequenced activity
C)the average of the longest duration for each sequenced activity multiplied by 3
D)adding the lengths of the shortest individual legs of each sequenced activity
Answer: B
Q3) The cancellation of many energy projects was ______.
A)a very difficult decision
B)the result of low oil prices
C)due to the lack of personnel to complete these projects
D)a direct result of government regulation
Answer: B
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Chapter 4: Supplement: Project Management
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Sample Questions
Q1) Find the area under the normal curve between the Z values 0.99 and 2.63.
A)15.68%
B)13.24%
C)14.46%
D)19.80%
Q2) A project's variance is ______.
A)the sum of the variances of all of its critical activities
B)the average of the variances of all of its critical activities
C)the maximum of the variances of all of its critical activities
D)the minimum of the variances of all of its critical activities
Q3) Which of the following is NOT one of the types of probabilistic estimates used in PERT?
A)optimistic
B)historical
C)most likely
D)pessimistic
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6

Chapter 5: Product and Service Innovations
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Sample Questions
Q1) In launching a product,it is not particularly helpful if ______.
A)the company describes the technical capabilities and features of the product in its advertising
B)the company describes the features the product in its advertising
C)the company advertises the locations where the product is available
D)the company advertises when the product will be available
Q2) The aim of service design is to answer the question,______?
A)What is the maximum price we can charge for the service
B)What is the nature of interaction between the customer and the service provider
C)How can we convince the customers they are getting more than they paid for
D)How can government regulations on service design be circumvented
Q3) Which of the following is not one of the options for the product following gate review?
A)terminate
B)suspend
C)recycle
D)proceed
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Chapter 6: Supplement: Reliability
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Sample Questions
Q1) A complicated widget fails 12 times in 600 hours of operation.The failure rate of the widget is ______.
A)0.02
B)0.03
C)0.01
D)0.05
Q2) Which of the following terms only considers the time it takes for a system to fail <i>while it</i> is operating but does not take into account any downtime associated with the repairs the system may need?
A)reliability
B)availability
C)redundancy
D)maintainability
Q3) The implication for product designers is that as MTBF ______ and MTTR ______,availability also increases.
A)increases,increases
B)decreases,decreases
C)decreases,increases
D)increases,decreases
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Page 8

Chapter 7: Managing for Quality
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Sample Questions
Q1) Which of the following is NOT a consequence of the poor management of the quality of a company's supply chain?
A)damage to a company's reputation
B)financial losses
C)legal liability issues
D)increase in customer satisfaction
Q2) Which of the following statements is true with regard to Edward Deming?
A)He taught statistical quality control methods to the Germans during World War II.
B)He taught statistical quality control methods to the Japanese after World War II.
C)He taught statistical quality control methods to the Russians before World War II.
D)He taught statistical quality control methods to the Japanese before World War I.
Q3) Which of the following is true with regard to the Deming Prize?
A)It was introduced by the U.S.government in 1950.
B)Today,its award is restricted to Japanese companies.
C)Its introduction was met with a lot of resistance from the ISO.
D)The Union of Japanese Scientists and Engineers instituted the Deming Prize.
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Chapter 8: Quality Improvement and Control Tools
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Sample Questions
Q1) Which of the following is true about the assumptions underlying the Poisson distribution?
A)The probability of occurrence of an event (defect)over a narrow interval of time,area,or space is small and directly proportional to the size of that interval.
B)The probability of two such events (defects)occurring in that same narrow interval is so large that it is highly likely.
C)The probability of two such events (defects)occurring as a result of the same cause is so large that it is highly likely.
D)The probability of two such events (defects)having identical liability costs is so small that it is highly likely.
Q2) As a rule of thumb,to do a process capability analysis ______.
A)we should collect a minimum of 20 samples
B)each sample in our data collection should have at least 500 items
C)we should collect a maximum of 20 samples
D)each sample in our data collection should be from a different population
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10

Chapter 9: Capacity Planning
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Sample Questions
Q1) Which of the following statements is NOT a contributor to fluctuations in demand?
A)the random nature of demand
B)seasonality
C)inclement weather
D)changes in management style
Q2) Which of the following statements is true about capacity efficiency?
A)It tells us how efficiently capacity has been designed.
B)It is the percentage of effective capacity used to produce the actual output.
C)It is the extent to which the design capacity is used.
D)It is calculated by dividing the effective capacity by design capacity.
Q3) One of the types of supply uncertainty is ______.
A)a shortage of inbound raw materials and components
B)a surplus of inbound raw materials and components
C)a shortage of outbound raw materials and components
D)a surplus of outbound raw materials and components
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Chapter 10: Supply Chain Design and Location Planning
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Sample Questions
Q1) Which of the following is a factor that is MOST likely to influence the choice of a location for a global manufacturing plant?
A)price of the product
B)ISO certification requirements
C)possibility of government audits
D)applicability of tariffs
Q2) The objective in the last phase of the supply chain design and facility location process is to ______.
A)consider the availability of the necessary infrastructure
B)determine the number of facilities needed for the supply chain
C)come up with a final supply chain design that will maximize the profits for the company
D)determine the role each facility would play in meeting the market requirements
Q3) The overall objective of Phase II in the supply chain design and facility location process includes all of the following except ______.
A)the regions where the facilities will be located
B)the availability of the necessary infrastructure
C)the role each facility would play in meeting the market requirements
D)the number of facilities needed for the supply chain
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Page 12
Chapter 11: Process Design and Layout Planning
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Sample Questions
Q1) Processes that require high levels of customer interaction and customization ______.
A)experience little variability
B)are exemplified by professional services (e.g.,a lawyer's services)
C)are usually cheap
D)benefit from economies of scale
Q2) Mass customization combines the advantages of which two processes?
A)job-shop and continuous
B)job-shop and project
C)project and continuous
D)continuous and batch
Q3) Shifting from one production process to another ______.
A)is difficult
B)is inexpensive
C)can be done quickly
D)can be done without human intervention
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13
Chapter

Layouts
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Sample Questions
Q1) ______is the time required to completely produce an item if only one item is being produced at a time.
A)Idle time
B)Flow time
C)Cycle time
D)Setup time
Q2) In process layouts,the process facilities are shared by a wide variety of different products.Consequently,______.
A)the relative positioning of the various departments is a compromise
B)the relative positioning of the various departments is usually a perfect solution
C)the relative positioning of the various departments is an expensive solution
D)the relative positioning of the various departments is a quick solution
Q3) Which of the following methods is used for process layout analyses using quantitative data?
A)cost optimization method
B)relationship rating method
C)line balancing method
D)factor rating method
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Chapter 13: Supplier Management
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Sample Questions
Q1) Which of the following is characterized by high supply risks and the potential for impacting a firm's profitability?
A)bottleneck purchases
B)strategic purchases
C)noncritical purchases
D)leveraged purchases
Q2) Total cost of ownership ______.
A)is the purchase price of the supplies
B)includes the overall costs (both direct and indirect)of purchasing,inspecting,handling,transporting,and disposing
C)is the selling price of the supplies
D)is the pocket price of the supplies
Q3) Benefits of global sourcing include ______.
A)higher costs
B)broader pool of suppliers and service providers
C)language and cultural barriers
D)slower time-to-market
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Chapter 14: Logistics Management
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Sample Questions
Q1) Which of the following is NOT a function of materials handling?
A)short-distance movement (within a plant or warehousing facility)
B)protection of materials (within a plant or warehousing facility)
C)protection of people (within a plant or warehousing facility)
D)long-haul transportation (between plant and warehousing facility)
Q2) The two modes of transportation are ______.
A)basic and advanced
B)advanced and intermodal
C)basic and intermodal
D)government regulated and not regulated
Q3) Cost of handling alone accounts for ______.
A)20% to 25% of total logistics costs
B)20% to 25% of total manufacturing costs
C)12% to 15% of total logistics costs
D)12% to 15% of total manufacturing costs
Q4) An advantage of transportation by trucks is that ______.
A)they can be used with intermodal transportation
B)they can travel over water
C)they can carry more goods per dollar of fuel costs
D)they are not regulated by government
Page 16
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Chapter 15: Demand Management and Customer Service
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Sample Questions
Q1) Which of the following is NOT a factor for collaborative forecasting?
A)new product introductions
B)insight and judgment of the company's supply chain partners
C)historical demand
D)customers' buying power
Q2) <i>Demand influences new product introductions and product portfolio planning.</i>This statement is applicable to which functional area?
A)supply chain
B)finance
C)marketing
D)human resources
Q3) A restaurant with overscheduled staff on a slow night is an example of ______.
A)insufficient capacity in the form of busy resources and poor service quality
B)excess capacity in the form of idle resources
C)excellent service quality
D)service recovery
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Chapter 16: Demand Forecasting Methods
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Sample Questions
Q1) One requirement for using the linear trend multiplicative method is ______.
A)tracking signals should be used
B)time series demand data should exhibit a linear trend with seasonal variations
C)seasonal indices need not be available
D)time series demand should exhibit a nonlinear trend with seasonal variations
Q2) Which of the following variations cannot be predicted and can be identified only after occurrence?
A)random variations
B)irregular variations
C)seasonal variations
D)cyclical variations
Q3) The tendency to consistently produce a particular type of forecast (high or low)that isn't accurate is called a(n)______.
A)overestimate
B)underestimate
C)bias
D)wrong estimate
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Chapter 17: Lean Operations and Supply Chains
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Sample Questions
Q1) Which of the following is NOT a reason why global sourcing makes it considerably more difficult to implement lean?
A)lower inventory levels
B)longer global supply chains
C)poor accuracy of sales forecasts
D)longer lead times
Q2) One tool to visually identify and pinpoint waste is ______.
A)a value stream map
B)a histogram
C)a process map
D)a Pareto chart
Q3) Which of the following is NOT a type of flow common to all supply chains?
A)product and service flows
B)information flows
C)financial flows
D)product returns flows
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19

Chapter 18: Inventory Management
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Sample Questions
Q1) Which of the following is true with regard to backorders?
A)The sale is lost for the moment but filled at a future date.
B)The revenue earnings are improved.
C)They have a positive impact on the company's reputation.
D)They have a positive impact on the company's market share.
Q2) Major categories of inventory-related costs include ______.
A)cost of defective raw materials
B)holding or carrying costs
C)cost of government audits
D)cost of holding the wrong products
Q3) In a periodic inventory system,______.
A)inventory is monitored frequently between orders
B)costs associated with purchasing and ordering can be minimized
C)savings due to economies of scale are not available
D)physical counting and ordering of replacement items occur at different times
Q4) Customer responses to rationing ______.
A)can eliminate the bullwhip effect
B)is also referred to as gaming
C)depends on price of the product
D)depends on frequency with which inventory is replenished
Page 20
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Chapter 19: Inventory Control Models
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Q1) A local distributor for a Belgian chocolate manufacturer expects to sell 12,000 cases of chocolate truffles next year.The annual holding costs for the truffles are $16 per case per year.The ordering cost is $60 per order.The distributor operates 320 days a year.In this example,______.
A)the total holding costs are given by 12,000 divided by $16
B)the total holding costs are given by 150 times $16
C)the total holding costs are given by 12,000 times $16
D)the total holding costs are given by 300 divided by $16
Q2) The total cost in the EOQ is ______.
A)insensitive to minor deviations in the order quantity from the EOQ amount
B)sensitive to minor deviations in the order quantity from the EOQ amount
C)insensitive to major deviations in the order quantity from the EOQ amount
D)sensitive to deviations in the order quantity from the EOQ amount by more than 20%
Q3) If the order quantity is 1,000 units,and the holding costs are $5 a unit per year,then ______.
A)the average inventory level will be 500
B)the total annual holding cost would be $5,000
C)the average inventory level will be 2,500
D)the total annual holding cost would be $500
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Page 21

Chapter 20: Sales and Operations Planning
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Sample
Questions
Q1) Airlines overfill customers beyond their seating capacity in order to compensate for customers who cancel their booking.This technique is an illustration of which of the following yield management strategies?
A)overbooking
B)adjusting prices to augment demand
C)annualized hours strategy
D)using different fare classes to partition demand
Q2) Yield management is commonly referred to as ______.
A)cost management
B)revenue management
C)sales management
D)service management
Q3) Which of the following is an optimization technique in which the objective and the constraint functions are linear and the variables are continuous?
A)linear decision rule
B)linear programming
C)simulation
D)management coefficient model
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22

Chapter 21: Master Scheduling and Material Requirements
Planning
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Sample Questions
Q1) MRP outputs reports are available to ______.
A)production planners
B)customer service representatives
C)production managers
D)all of these
Q2) The time when raw materials,components,or subassemblies are required is called the ______.
A)due date
B)lead time
C)time phase
D)pegging time
Q3) The output of individual production quantities of the end items to be produced at various points of the short-term planning horizon is called ______.
A)available-to-promise (ATP)inventory
B)the master production schedule (MPS)
C)sales and operations planning
D)rough-cut capacity planning
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Page 23

Chapter 22: Supplement: Capacity Requirements Planning,
MRP II, ERP, and DRP
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Q1) ______ allows for the coordination of raw materials purchasing,whereas ______ facilitates the development of a detailed production schedule that accounts for machine and labor capacity and for scheduling the production runs.
A)MRP,MRP II
B)MRP II,MRP
C)MRP,CRP
D)MRP,DRP
Q2) Which of the following is FALSE about MRP II?
A)It is an extension of MRP.
B)It was first introduced in the late 1960s.
C)It was introduced as an open loop MRP system.
D)It quickly replaced CRP.
Q3) Which of the following is NOT an application included in the supply chain management module in an ERP system?
A)demand management
B)distribution management
C)inventory management
D)price management
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Chapter 23: Detailed Scheduling
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Q1) The average tardiness for the jobs listed in the following table under the shortest processing time (SPT)rule is______. \[\begin{array} { | c | c | c | }
\hline \text { Job } & \begin{array} { c }
\text { Processing time } \\
\text { (in days\} }
\end{array} & \begin{array} { c }
\text { Due date (in days from } \\
\text { today's date\} }
\end{array} \\
\hline \text { A } & 4 & 9 \\
\hline \text { B } & 10 & 18 \\
\hline \text { C } & 6 & 6 \\
\hline \text { D } & 12 & 19 \\
\hline \text { E } & 7 & 17 \\
\hline \end{array}\]
A)5 days
B)6.6 days
C)6 days
D)5.6 days
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Page 25

Chapter 24: Linear Programming
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Q1) At optimality,if the left-hand side values are greater than the right-hand side values,we have ______.
A)slack
B)profit
C)loss
D)surplus
Q2) In order to fertilize his vegetable farm,John,a farmer,needs to choose from two fertilizers: Nitro Plus and Phosphate Max.Each bag of Nitro Plus costs $7 and contains 8 pounds of nitrogen and 6 pounds of phosphate.Each bag of Phosphate Max costs $9 and contains 4 pounds of nitrogen and 8 pounds of phosphate.John's vegetable farm requires at least 32 pounds of nitrogen and 48 pounds of phosphate.(Assume fractions of a bag are allowed).At the optimal solution,the total fertilizer costs are ______.
A)$29.80
B)$54.40
C)$76.25
D)$80.00
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Chapter 25: The Transportation Models
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Q1) ______ refers to a condition that occurs when the solution to a transportation problem has occupied routes (cells)that are less than the (number of origins + the number of destinations - 1).
A)Balanced transportation problem
B)Degeneracy
C)Dummy demand destinations
D)Dummy supply sources
Q2) Refer to the Shipping Costs for The Allied Motors Company.Solve the transportation problem using Excel Solver.(Remember that in balanced transportation problems all constraints-except the non-negativity constraints of the decision variables-should be set as an equal-to (=)sign in the Excel Solver dialogue.)At the optimum solution,the number of units shipped from Hampton to Newark is ______.
A)527
B)591
C)243
D)433
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Chapter 26: Waiting Line Models
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Sample Questions
Q1) In waiting line problems,the service rate is assumed to follow a probability distribution known as ______.
A)discrete Poisson distribution
B)binomial distribution
C)normal distribution
D)negative exponential distribution
Q2) An airport check-in and security-service system is an example of ______ structure.
A)single channel,single-phase
B)single channel,multiphase
C)multichannel,multiphase
D)multichannel,single-phase
Q3) Let us assume the average number of customers served per hour is five customers.What is the probability that the service exceeds 1 hour for any customer?
A)0.67%
B)1.23%
C)0.98%
D)9.00%
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28

Chapter 27: Simulation
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Q1) Consider the Demand for Microwave Ovens dataset.What is the total demand corresponding to random numbers 31,73,53,92,12,and 52?
A)14
B)15
C)16
D)17
Q2) Consider the Demand for Microwave Ovens dataset.What is the total demand corresponding to random numbers 69,29,56,8,83,and 55?
A)8
B)9
C)10
D)11
Q3) Consider the Demand for Microwave Ovens dataset.What is the total demand corresponding to random numbers 76,75,25,12,76,and 51?
A)8
B)13
C)6
D)11
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29

Chapter 28: Learning Curves
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Q1) Acme,Inc.,produces widgets.To manufacture a new type of widget,it took 100 hours for the first widget.Acme estimates it has a 95% learning rate.Using the logarithmic approach,calculate the time it will take to manufacture the 75th widget.
A)62.89 hours
B)72.70 hours
C)56.55 hours
D)76.42 hours
Q2) Consider a programmer required to complete four work assignments.Assume an overhead rate of $1.50 and the cost per hour for the programmer's services to be $35/hour.The programmer's learning rate for coding is 0.85.The steady state for the fourth iteration (n = 4)to code is 50 hours.Determine the estimate of time needed for the first coding iteration.
A)69.16 hours
B)97.43 hours
C)87.34 hours
D)78.43 hours
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Chapter 29: Decision-Making Tools
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Q1) Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.You getting wet or staying dry and being burdened with carrying a raincoat or not are all examples of ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives
Q2) Which of the following is a drawback of the maximax criterion?
A)It ignores the payoffs associated with the "high demand" state of nature.
B)It ignores the payoffs associated with the "low demand" state of nature.
C)It is not a good method to use when the states of nature are not equally probable.
D)It ignores the maximum payoff that could be realized if the decision maker were a risk taker.
Q3) In a decision tree,branches from a square node represent ______.
A)decision alternatives
B)uncertain event whose occurrence cannot be predicted
C)the state of nature
D)consequences
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