Chapter 1 - Introduction

What is the purpose of operations within an organisation?
1. to acquire materials
2. to make the organisation’s products
3. to manage relations with suppliers
4. to make a profit
What kind of materials do organisations buy?
1. only goods from manufacturers
2. only services from providers
3. only transport for logistics
4. everything that is needed for their products
What is logistics responsible for?
1. the movement of materials from suppliers into an organisation
2. the movement of materials through the organisation
3. the movement of materials from an organisation out to customers
4. all of the above
Is purchasing generally considered:
1. a part of logistics?
2. a part of marketing?
3. a part of finance?
4. a separate and independent function?
What is a supply chain?
1. the route a product follows to market
2. the suppliers that deliver materials
3. all the activities and organisations that materials move through
4. the set of customers who buy final products
Which of the following statements is true?
1. some people say that supply chain management is a broader function than logistics
2. some people say that supply chain management is exactly the same as logistics
3. some people say that we should use other terms such as ‘supply network management’
4. some people say that logistics is a part of operations management
5. all of the above
What is the overriding responsibility of purchasing?
1. to acquire all the materials needed by an organisation
2. to organise deliveries to customers
3. to negotiate terms and conditions with manufacturers
4. to minimise the costs of operations
Purchasing organises the change of ownership of items. Is this:
1. true?
2. false?
3. either true or false?
Purchasing is often known by other names, such as procurement, material acquisition and supply management. Is this:
1. true?
2. false?
3. either true or false?
Which of the following is true of purchasing?
1. it is an essential function in every organisation
2. it affects broad organisational performance
3. it often accounts for the highest costs
4. it has a strategic role
5. all of the above
What proportion of its total costs might a typical manufacturer spend on purchasing materials?
1. 1-2%
2. 15-25%
3. 50-70%
4. 90-100%
5. more than 105%
Which of the following is not a benefit of good purchasing?
1. a reliable supply of materials needed for operations
2. identification and use of the best available suppliers
3. high costs associated with high quality products
4. less uncertainty in supply and lower stock levels
5. more flexible operations giving better service to customers
Purchasing used to be seen as a clerical task, but is increasingly seen as an essential function with a strategic impact. Is this:
1. true?
2. either true or false?
3. false?
Which of the following has not contributed to a changing view of purchasing?
1. changing management attitudes
2. changes in the nature of markets
3. changes in the nature of customers
4. changes in business operations
5. changes in the ownership of corporations
Which of the following is not true of purchasing?
1. it has continuously evolved in response to changing conditions
2. it is now a strategic function, performed only by senior executives
3. its importance continues to grow
4. it is increasingly integrated with other functions