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British Columbia Institute of Technology *
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Industrial Engineering
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Feb 20, 2024
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OPMT4460 SCM Supply (2024)
Lecture #01 (Friday January 05): Student Worksheet Name:
ANSWERS
Set:
This session covers chapter 1, 2 and 3 of the textbook.
#1 – The Purchasing Function normally incudes all of the following activities except
for:
a)
Vendor Selection
b)
Creating Purchase Orders
c)
Authorizing Vendor Payment
d)
Verifying the level of Quality of goods received from suppliers
The answer to Q#1 is: D #2 – The “missing word” in the following statement is: Getting the ___ quality
In the ___ quantity
At the ___ time
For the ___ price
From the ___ source
The answer to Q#2 is: RIGHT #3 – A Purchase Requisition can be sent to the Purchasing Department in the format of:
a)
Printed (hard copy) single page paper forms
b)
Large formal Statements of Work (SOW’s)
c)
Electronic communication internal to the company ERP system
d)
Kanban Cards
e)
All of the above
The answer to Q#3 is: E #4 – If a Purchase Requisition is received for an expensive item that does not have a current “Pre-
Authorized Supplier” on a Source List then the Purchaser will usually:
a)
Place the order with the supplier located closest (geographically) to their facility
b)
Send out Requests for Quotation to several potential suppliers
c)
Reject the Purchase Requisition to the Originator requesting that the Originator must find a supplier then return the Requisition so that the item can be ordered
d)
Search the Internet for every possible global supplier and then randomly order the item from one of those suppliers
The answer to Q#4 is: B #5 – A Purchase Order is a legally-binding document (ie: contract) and must include the opportunity for the Supplier to acknowledge acceptance. If a Supplier does not send the Buyer a formal acceptance of the Purchase Order what should the Purchaser do?
a)
The Purchaser must repeatedly contact the Supplier until formal acceptance is received before the Purchase Order becomes valid
b)
Boilerplate (standard legal language) is written into each Purchase Order outlining that “non- response” within a certain time frame is equivalent to formal acceptance
c)
I don’t know (and the book did not seem to cover it very clearly)
1 | P a g e
The answer to Q#5 is: A or C are acceptable (the book does not clearly define it) #6 – List three functional groups (other than Purchasing) within a company that require visibility (either electronically or with paper copies) of a Purchase Order.
Accounting Traffic Management
Requisitioner Supply Management
Receiving Quality Control
#7 – The primary benefit of using Blanket Purchase Orders for the organization buying the goods is that:
a)
The blankets they are buying will help keep them warm in the Winter
b)
The Administrative workload (and associated “ordering costs”) will go down
c)
The price of the goods being purchased will remain stable during the duration of the Blanket Purchase Order
d)
It provides a means to justify visiting a supplier (to renew the Blanket Contract annually) at which time an inspection of the supplier facility can also be done
The answer to Q#7 is: B #8 – A high performing Purchasing function within an organization that manufactured products is important because:
a)
The manufacturer will run out of materials if it is not
b)
Purchased content is more than 55% of revenues so Purchasing activities have a major bottom-
line impact
c)
They need to support the needs of all other departments
d)
I am not sure
The answer to Q#8 is: B #9 – If our company has a competitive focus of “Innovation” we should:
a)
Engage suppliers in our product design process as early in that process as possible to take advantage of their knowledge and expertise
b)
Integrate our supply chain downstream so that we have more control over product flow
c)
Find suppliers as close to our facility as possible to reduce transport time
d)
Constantly demand lower prices from all of our suppliers in order to reduce raw materials costs
The answer to Q#9 is: A #10 – Corporate Purchasing Policies should be put in place to clearly identify what to do in case there are concerns about irregular business dealings such as:
a)
Being offered Canuck tickets so that suppliers will be viewed favorably for future purchases
b)
Buying goods from a family relative (such as “Uncle Bob”)
c)
Having Purchasing Personnel invest in shares in a suppliers company
d)
All of the above
The answer to Q#10 is: D 2 | P a g e
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