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Test your basic knowledge |
Certified Professional In Supply Management
Start Test
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
Total cost of performance for services
Centralized Buying
Indirect - semi-variable cost
Straight line depreciation
2. 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.
Request for Information (RFI)
Carryi
Indirect - Variable Cost
Methods of communicating attributes of a product or service
3. 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.
Request for Information (RFI)
Unit Total Cost
Indirect - semi-variable cost
Finance cost
4. 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.
Types of solicitation bids
Declining balance Depreciation
Life-Cycle cost
Ownership cost
5. 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.
Declining balance Depreciation
Return on total assets (ROTA)
Straight line depreciation
Direct Cost
6. Return on total assets measures how effectively the organization is using the entirety of assets. ROTA = Net Income / Total Assets
Indirect Cost
Direct Cost
Carryi
Return on total assets (ROTA)
7. Investigates the profitability of an organization in relation to it's sales. Net operating margin expresses profitability as a ratio of income to sales.
Unit Total Cost
Statement of Work (SOW)
Margin Analysis
Finance cost
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.
Total Cost of Ownership (TCO)
Sum of Years Digits Depreciation
Indirect - semi-variable cost
Finance cost
9. 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.
Lead division buying
Finance cost
Declining balance Depreciation
Life-Cycle cost
10. Measures how effectively the organization is using the assets involved in a particular project. ROAE = (Net Income + Interest Expense After Tax) /Average Capital Employed.
Weighted average cost of capital formula
Request for Information (RFI)
Statement of Work (SOW)
Return on assets employed (ROAE)
11. 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
Margin Analysis
Unit Total Cost
12. ROI = Net Present Value of Cash flows from the Project / Total Capital Invested in the Project.
Indirect Cost
Life-Cycle cost
Indirect - Fixed Cost
Return on Investment (project based - more complicated)
13. Total Operating Income / Total Sales
Return on Investment (project based - more complicated)
Net Operating Margin
Life-Cycle cost
Declining balance Depreciation
14. 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
Methods of communicating attributes of a product or service
Ownership cost
Cooperative purchasing
Centralized Buying
15. Annual Operating Income / Total Capital Invested
Return on assets employed (ROAE)
Return On Investment (ROI)
Landed Cost
Indirect Cost
16. 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
Direct Cost
Return on assets employed (ROAE)
Carryi
Request for Information (RFI)
17. The simplest to calculate and assumes that a machines depreciation is related to function of time not it's use.
Indirect - semi-variable cost
Methods of communicating attributes of a product or service
Straight line depreciation
Return on assets employed (ROAE)
18. 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 - semi-variable cost
Return on Investment (project based - more complicated)
Total cost of performance for services
Indirect Cost
19. 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
Total Cost of Ownership (TCO)
Weighted average cost of capital formula
Return on total assets (ROTA)
Unit Total Cost
20. Where one division is the primary user of a commodity - product - or service so it negotiates the contracts for the entire company (other divisions).
Carryi
Consortia
Lead division buying
Indirect - semi-variable cost
21. 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.
Total Cost of Ownership (TCO)
Margin Analysis
Centralized Buying
Landed Cost
22. 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
Direct Cost
Unit Total Cost
Straight line depreciation
Types of solicitation bids
23. Cost associated with having material on hand - two main ones. Ownership and taxes.
Ownership cost
Landed Cost
Bidder's Conferences
Life-Cycle cost
24. 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
Net Operating Margin
Indirect Cost
Unit Total 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.
Return on assets employed (ROAE)
Return On Investment (ROI)
Direct Cost
Indirect Cost
26. 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.
Centralized Buying
Consortia
Total Cost of Ownership (TCO)
Statement of Work (SOW)
27. 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.
Statement of Work (SOW)
Cooperative purchasing
Bidder's Conferences
Landed Cost
28. 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 -
Finance cost
Indirect - Fixed Cost
Straight line depreciation
Sum of Years Digits Depreciation
29. With having material on hand is obsolesces - theft - damage and shrinkage.
Risk cost
Total cost of performance for services
Methods of communicating attributes of a product or service
Indirect - semi-variable cost
30. 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.
Consortia
Indirect - Fixed Cost
Total Cost of Ownership (TCO)
Straight line depreciation
31. 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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32. 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.
Unit Total Cost
Sum of Years Digits Depreciation
Methods of communicating attributes of a product or service
Cooperative purchasing
33. 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.
Types of solicitation bids
Indirect - Variable Cost
Lead division buying
Total Cost of Ownership (TCO)