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Test your basic knowledge |
Certified Professional In Supply Management
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Study First
Subjects
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certifications
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business-skills
Instructions:
Answer 33 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Is an organizational policy and structure in which the authority and responsibility for most supply related functions and decisions are assigned to a central organization. Decisions are made in one spot - not all people are necessarily located in one
Unit Total Cost
Centralized Buying
Direct Cost
Carryi
2. ROI = Net Present Value of Cash flows from the Project / Total Capital Invested in the Project.
Bidder's Conferences
Declining balance Depreciation
Return on Investment (project based - more complicated)
Return on total assets (ROTA)
3. Investigates the profitability of an organization in relation to it's sales. Net operating margin expresses profitability as a ratio of income to sales.
Return on Investment (project based - more complicated)
Margin Analysis
Return On Investment (ROI)
Weighted average cost of capital formula
4. Annual Operating Income / Total Capital Invested
Statement of Work (SOW)
Return On Investment (ROI)
Return on total assets (ROTA)
Indirect - Fixed Cost
5. Is a cost-analysis tool that incorporates the purchase price of equipment and all operating and related costs over the life of the item; including but not limited to maintenance - downtime - energy cost and salvage value.
Net Operating Margin
Centralized Buying
Life-Cycle cost
Lead division buying
6. The total cost of one unit of goods or services. It includes purchase price plus all other cost associated with the item or service over it's useful life - including other direct cost - policy costs and cost of non-performance.
Unit Total Cost
Weighted average cost of capital formula
Request for Information (RFI)
Landed Cost
7. Are those cost that tend to remain constant regardless of the volume of operating activity. They decrease as a cost per unit when output is high - assigned to departments through cost allocation methods. Think: Rent - property taxes -
Indirect - Variable Cost
Indirect - Fixed Cost
Statement of Work (SOW)
Return on Investment (project based - more complicated)
8. What is the cost of capital to finance the inventory. Two ways to get the cost. One - use the companies short-term borrowing rate. or 2. The company's required rate of return on an investment.
Indirect - Fixed Cost
Centralized Buying
Carryi
Finance cost
9. The combination of the purchase or acquisition price of a good or service and any additional cost incurred before or after the product or service delivery.
Total Cost of Ownership (TCO)
Carryi
Cooperative purchasing
Indirect Cost
10. X = Type of capital; Y = Total Capital; Z =the interest rate (cost) or each type of capital; S=sum. Example: Long term debt = 400K (capital type) Preferred stock = 300K (capital type) Total = 700K Financing cost: LTD: 6.2% PS: 10.5% Equation: 1. Deb
Straight line depreciation
Weighted average cost of capital formula
Net Operating Margin
Finance cost
11. Where one division is the primary user of a commodity - product - or service so it negotiates the contracts for the entire company (other divisions).
Return on assets employed (ROAE)
Straight line depreciation
Net Operating Margin
Lead division buying
12. Used for more complex biding situations and detailed information where dialog w/ buyer and supplier are required with engineering and supplier. Potential problems is the time it takes to conduct.
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13. Are those cost that change proportionately with the volume of production of goods or the performance of services. i.e.: direct material cost and direct labor cost.
Statement of Work (SOW)
Indirect - Variable Cost
Cooperative purchasing
Landed Cost
14. Return on total assets measures how effectively the organization is using the entirety of assets. ROTA = Net Income / Total Assets
Cooperative purchasing
Indirect Cost
Return On Investment (ROI)
Return on total assets (ROTA)
15. Two or more organizations (public or private) that join together to combine spend for common commodities. Members are usually active in the purchasing decisions even if a 3rd party makes the purchases for them.
Request for Information (RFI)
Consortia
Margin Analysis
Return on Investment (project based - more complicated)
16. Is a spec for service to be performed. Two components. 1. defines what product must look like or do and 2. quantitative to measure performance.
Ownership cost
Risk cost
Statement of Work (SOW)
Finance cost
17. Is the total accumulation of costs for an imported item - including purchase price plus freight - handling - duties - customs clearance and storage to a designated point.
Request for Information (RFI)
Declining balance Depreciation
Landed Cost
Margin Analysis
18. Takes the number of years of useful life of an asset - counts back to one - and adds the digits together. This method depreciates more in the first few years of an asset than the others.
Sum of Years Digits Depreciation
Bidder's Conferences
Indirect - Variable Cost
Net Operating Margin
19. A) Performance & design specs - define what the product or service must do. Often used with capital equip & services. Performance spes. gives supplier the most control over how to satisfy the requirement. Design Specs gives buyer most control. B) Int
Types of solicitation bids
Declining balance Depreciation
Methods of communicating attributes of a product or service
Finance cost
20. Are information request not binding on either party. Results are usually in the form of price list or catalogs and helps supplier in budgeting process. Potential draw backs - is that RFI's are overused and supplier may not respond.
Finance cost
Direct Cost
Request for Information (RFI)
Indirect Cost
21. Total Operating Income / Total Sales
Lead division buying
Return on total assets (ROTA)
Straight line depreciation
Net Operating Margin
22. The simplest to calculate and assumes that a machines depreciation is related to function of time not it's use.
Carryi
Landed Cost
Straight line depreciation
Indirect - Fixed Cost
23. Are those cost that have both a fixed and variable cost component. such as supervisors salaries - pensions plans - utilities - and fuel.
Straight line depreciation
Indirect - semi-variable cost
Indirect - Variable Cost
Indirect Cost
24. Expenses that can be identified with individual units of output - typically direct materials and direct labor. Important for several reasons: 1. Direct cost have largest impact on supplier prices. 2. Reduced direct cost give bigger savings than reduc
Net Operating Margin
Lead division buying
Indirect - semi-variable cost
Direct Cost
25. Are any cost not directly identified with specific products or services but related to the normal operation of an co. AKA 'Overhead' & are composed of fixed cost - variable cost - & semi-variable cost.
Margin Analysis
Total cost of performance for services
Indirect Cost
Bidder's Conferences
26. Also called inventory holding cost - are the costs associated with having inventory available - including the opportunity of invested funds - storage and handling cost; and taxes - insurance - shrinkage and obsolescence-risk cost. Four components of
Indirect - semi-variable cost
Carryi
Total cost of performance for services
Request for Information (RFI)
27. Multiplying the book value by the constant depreciation rate at the end of each fiscal period. Assumes matching has a higher value at beginning of life than ant end and matches Depreciation with that assumption.
Total Cost of Ownership (TCO)
Declining balance Depreciation
Unit Total Cost
Margin Analysis
28. With having material on hand is obsolesces - theft - damage and shrinkage.
Direct Cost
Risk cost
Return On Investment (ROI)
Return on total assets (ROTA)
29. Is an profit or non-profit company that serves members in a single industry such as hospitals - Universities or country governments. Co-op members play NO role in the management of the co-ops activities - but can suggest suppliers.
Methods of communicating attributes of a product or service
Ownership cost
Cooperative purchasing
Declining balance Depreciation
30. Cost associated with having material on hand - two main ones. Ownership and taxes.
Indirect - semi-variable cost
Bidder's Conferences
Ownership cost
Landed Cost
31. Measures how effectively the organization is using the assets involved in a particular project. ROAE = (Net Income + Interest Expense After Tax) /Average Capital Employed.
Straight line depreciation
Bidder's Conferences
Return on assets employed (ROAE)
Margin Analysis
32. 1. Offer to buy vs Offer to sell - 2. Informal bid/quotation - 3. Electronic solicitations (RFx) - 4. Competitive proposals - 5. Sealed bids / formal advertising - 6. Restricted competition - 7. Non-competitive negotiations - 8. Two step bidding - 9.
Finance cost
Sum of Years Digits Depreciation
Methods of communicating attributes of a product or service
Types of solicitation bids
33. When evaluating services - do not look at the cost of the services - look at if it reduces total cost to the process or organization.
Indirect - Fixed Cost
Total cost of performance for services
Indirect Cost
Cooperative purchasing