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Certified Professional In Supply Management
Start Test
Study First
Subjects
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certifications
,
business-skills
Instructions:
Answer 33 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
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 the total accumulation of costs for an imported item - including purchase price plus freight - handling - duties - customs clearance and storage to a designated point.
Methods of communicating attributes of a product or service
Landed Cost
Return on total assets (ROTA)
Indirect - Fixed Cost
2. 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
Declining balance Depreciation
Consortia
Total Cost of Ownership (TCO)
Weighted average cost of capital formula
3. 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
Risk cost
Sum of Years Digits Depreciation
4. 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)
Methods of communicating attributes of a product or service
Return on assets employed (ROAE)
Life-Cycle cost
5. When evaluating services - do not look at the cost of the services - look at if it reduces total cost to the process or organization.
Return On Investment (ROI)
Straight line depreciation
Consortia
Total cost of performance for services
6. Return on total assets measures how effectively the organization is using the entirety of assets. ROTA = Net Income / Total Assets
Indirect Cost
Indirect - Variable Cost
Return on total assets (ROTA)
Carryi
7. 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.
Return on Investment (project based - more complicated)
Indirect - Variable Cost
Types of solicitation bids
Sum of Years Digits Depreciation
8. Total Operating Income / Total Sales
Weighted average cost of capital formula
Net Operating Margin
Consortia
Declining balance Depreciation
9. 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
Bidder's Conferences
Consortia
Centralized Buying
Return On Investment (ROI)
10. With having material on hand is obsolesces - theft - damage and shrinkage.
Risk cost
Return on total assets (ROTA)
Carryi
Lead division buying
11. 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
Indirect - Fixed Cost
Direct Cost
Types of solicitation bids
Centralized Buying
12. 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.
Centralized Buying
Return on assets employed (ROAE)
Total cost of performance for services
Consortia
13. 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
Straight line depreciation
Types of solicitation bids
Indirect - semi-variable cost
14. 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
Finance cost
Sum of Years Digits Depreciation
Return on total assets (ROTA)
Carryi
15. 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.
Life-Cycle cost
Direct Cost
Return on Investment (project based - more complicated)
Return on assets employed (ROAE)
16. 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.
Return on total assets (ROTA)
Request for Information (RFI)
Centralized Buying
Direct Cost
17. ROI = Net Present Value of Cash flows from the Project / Total Capital Invested in the Project.
Return On Investment (ROI)
Return on Investment (project based - more complicated)
Indirect - Variable Cost
Centralized Buying
18. 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.
19. 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.
Declining balance Depreciation
Indirect Cost
Total cost of performance for services
Total Cost of Ownership (TCO)
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).
Return on assets employed (ROAE)
Lead division buying
Return on total assets (ROTA)
Unit Total Cost
21. 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
Indirect - Variable Cost
Indirect - semi-variable cost
Declining balance Depreciation
22. Are those cost that have both a fixed and variable cost component. such as supervisors salaries - pensions plans - utilities - and fuel.
Statement of Work (SOW)
Indirect - semi-variable cost
Carryi
Cooperative purchasing
23. Cost associated with having material on hand - two main ones. Ownership and taxes.
Declining balance Depreciation
Total cost of performance for services
Ownership cost
Methods of communicating attributes of a product or service
24. 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.
Finance cost
Return on Investment (project based - more complicated)
Total Cost of Ownership (TCO)
Indirect - semi-variable cost
25. The simplest to calculate and assumes that a machines depreciation is related to function of time not it's use.
Straight line depreciation
Total Cost of Ownership (TCO)
Return on assets employed (ROAE)
Cooperative purchasing
26. Measures how effectively the organization is using the assets involved in a particular project. ROAE = (Net Income + Interest Expense After Tax) /Average Capital Employed.
Net Operating Margin
Return on assets employed (ROAE)
Direct Cost
Statement of Work (SOW)
27. 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.
Indirect - semi-variable cost
Return On Investment (ROI)
Margin Analysis
Sum of Years Digits Depreciation
28. 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.
Cooperative purchasing
Indirect - Variable Cost
Types of solicitation bids
Request for Information (RFI)
29. Investigates the profitability of an organization in relation to it's sales. Net operating margin expresses profitability as a ratio of income to sales.
Margin Analysis
Lead division buying
Return On Investment (ROI)
Types of solicitation bids
30. 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.
Cooperative purchasing
Statement of Work (SOW)
Indirect Cost
Direct Cost
31. 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 -
Cooperative purchasing
Return on assets employed (ROAE)
Total Cost of Ownership (TCO)
Indirect - Fixed Cost
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.
Risk cost
Return On Investment (ROI)
Cooperative purchasing
Indirect - Fixed Cost
33. Annual Operating Income / Total Capital Invested
Indirect - semi-variable cost
Return on Investment (project based - more complicated)
Return On Investment (ROI)
Return on total assets (ROTA)