SCM-Chap 2

Purchasing: The Act of Obtaining merchandise, capital equipment; raw materials, services, or maintenance, repair, and operating (MRO) supplies in exchange for money or its equivalent

• True

• False

Single-source - a risky proposition. Current trends favor fewer sources.

• True

• False

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

• True

• False

Merchants – Wholesalers and retailers who purchase for discount

• True

• False

Foreign suppliers located farther away may be able to deliver goods faster than domestic suppliers due to more efficient transportation and logistical systems.

• True

• False

Contracting - term often used for the acquisition of services

• True

• False

Contracting - term often used for the acquisition of services

• True

• False

Procurement included the added activities of specification development, expediting, supplier quality control and some logistical activities.

• True

• False

The primary goals of purchasing are as below: EXCEPT

• Ensure uninterrupted flows of raw materials at the lowest total cost

• Improve quality of the finished goods produced

• Optimize customer satisfaction

• Improve visibility

A high ROA indicates management is capable in generating profits with lower spending

• Correct

• false