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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
.
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 Ownership (TCO)
Centralized Buying
Direct Cost
Return on assets employed (ROAE)
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.
Consortia
Cooperative purchasing
Request for Information (RFI)
Life-Cycle cost
3. Where one division is the primary user of a commodity - product - or service so it negotiates the contracts for the entire company (other divisions).
Total Cost of Ownership (TCO)
Direct Cost
Indirect - Variable Cost
Lead division buying
4. 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.
Landed Cost
Indirect - Fixed Cost
Consortia
Centralized Buying
5. Cost associated with having material on hand - two main ones. Ownership and taxes.
Ownership cost
Return on assets employed (ROAE)
Finance cost
Carryi
6. 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
Cooperative purchasing
Return On Investment (ROI)
Bidder's Conferences
Direct Cost
7. 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
Return On Investment (ROI)
Declining balance Depreciation
Centralized Buying
8. 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.
Net Operating Margin
Sum of Years Digits Depreciation
Bidder's Conferences
Life-Cycle cost
9. 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.
Carryi
Weighted average cost of capital formula
Cooperative purchasing
Return on Investment (project based - more complicated)
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.
Declining balance Depreciation
Request for Information (RFI)
Return on assets employed (ROAE)
Landed Cost
11. 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.
Landed Cost
Indirect - Fixed Cost
Unit Total Cost
Carryi
12. Are those cost that have both a fixed and variable cost component. such as supervisors salaries - pensions plans - utilities - and fuel.
Indirect - semi-variable cost
Direct Cost
Ownership cost
Declining balance Depreciation
13. 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.
Types of solicitation bids
Direct Cost
Statement of Work (SOW)
Indirect - Fixed Cost
14. The simplest to calculate and assumes that a machines depreciation is related to function of time not it's use.
Straight line depreciation
Lead division buying
Ownership cost
Request for Information (RFI)
15. 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.
Request for Information (RFI)
Indirect - Variable Cost
Life-Cycle cost
Finance cost
16. 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 total assets (ROTA)
Return On Investment (ROI)
Carryi
Types of solicitation bids
17. Total Operating Income / Total Sales
Total cost of performance for services
Indirect - Variable Cost
Risk cost
Net Operating Margin
18. 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
Return on Investment (project based - more complicated)
Indirect - semi-variable cost
Direct 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
Return on Investment (project based - more complicated)
Indirect - Variable Cost
Indirect - semi-variable cost
Weighted average cost of capital formula
20. 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
Return on total assets (ROTA)
Total cost of performance for services
Indirect - Variable Cost
Carryi
21. 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
Return on Investment (project based - more complicated)
Straight line depreciation
Return on total assets (ROTA)
22. With having material on hand is obsolesces - theft - damage and shrinkage.
Margin Analysis
Risk cost
Centralized Buying
Carryi
23. 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)
Indirect - Variable Cost
Centralized Buying
Lead division buying
24. 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.
Indirect Cost
Indirect - Fixed Cost
Weighted average cost of capital formula
Return on Investment (project based - more complicated)
25. When evaluating services - do not look at the cost of the services - look at if it reduces total cost to the process or organization.
Total cost of performance for services
Lead division buying
Statement of Work (SOW)
Declining balance Depreciation
26. Return on total assets measures how effectively the organization is using the entirety of assets. ROTA = Net Income / Total Assets
Consortia
Types of solicitation bids
Weighted average cost of capital formula
Return on total assets (ROTA)
27. 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
Total Cost of Ownership (TCO)
Return on Investment (project based - more complicated)
Life-Cycle cost
28. Annual Operating Income / Total Capital Invested
Total Cost of Ownership (TCO)
Ownership cost
Indirect - semi-variable cost
Return On Investment (ROI)
29. 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
Net Operating Margin
Return On Investment (ROI)
Indirect - Fixed Cost
30. ROI = Net Present Value of Cash flows from the Project / Total Capital Invested in the Project.
Request for Information (RFI)
Return on Investment (project based - more complicated)
Total Cost of Ownership (TCO)
Return on assets employed (ROAE)
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.
32. 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.
Risk cost
Return on total assets (ROTA)
Life-Cycle cost
Declining balance Depreciation
33. 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.
Weighted average cost of capital formula
Centralized Buying
Finance cost
Indirect - Variable Cost