Chapter 16 – Purchasing Services

What is indirect spending?
1. spending with second tier suppliers
2. spending on materials that do not form part of the final product
3. transactions that have to be processed by a third party
4. transactions that involve currency exchanges
Which of the following is not one of the main elements of logistics?
1. inward logistics
2. reverse logistics to recover and recycle
3. international logistics
4. outward logistics
5. movement within the organisation
Transport is often the largest part of indirect costs. Is this:
1. true?
2. sometimes true?
3. false?
Which of the following is not normally a major concern for transport decisions?
1. selecting a transport mode
2. identify key transport performance variables
3. negotiate transport rates and service level
4. determine when and where to control transport
5. select a carrier
6. location of production facilities
What is 3PL?
1. a transport company
2. an international standard for purchasing logistics
3. a measure of transport efficiency
4. outsourced logistics
Which of the following is not a common measure of transport performance?
1. accessibility
2. reliability
3. vulnerability
4. speed
5. cost
6. capability
In a global context, which mode of transport carries the most materials?
1. road
2. rail
3. air
4. water
5. pipeline
The aim of inter-modal transport is to use the best mode for each leg of a journey, with seamless transfers between modes. Is this:
1. true?
2. partly true?
3. false?
The three main types of carrier are usually described as:
1. road, rail and shipping
2. private, state run and publicly owned
3. PL, FL and LTL
4. common, contract and private
Which of the following is not, generally, a benefit of third party logistics?
1. improved service levels
2. lower running costs
3. loss of control
4. allow concentration on core operations
5. greater flexibility
Which of the following activities are routinely done by third party logistics contractors?
1. sorting and consolidating shipments
2. running warehouses and logistics centres
3. finishing operations for delivery to final customers
4. routine transport operations
5. export packaging and containerisation
6. all of the above
Which of the following steps is not commonly used to select a third party logistics provider?
1. plan
2. select
3. implement
4. improve
5. partner
6. terminate
Which of the following is not a common internal way of managing indirect spending?
1. data collection and consolidation
2. purchasing outsourcing
3. restructuring to establish accountability
4. automating the requisition and sourcing
Which of the following is not a common external way of managing indirect spending?
1. purchasing consortia
2. reverse auctions
3. purchasing outsourcing
4. standardisation
Which of the following is not a common enabler for improving indirect spending?
1. supplier-managed e-catalogues
2. commodity coding
3. 4PL operations
4. zero based budgeting
5. power spenders
6. one commodity team assigned to large suppliers
Sourcing professional services is an area with some specific types of problem. Is this:
1. true?
2. to some extent true?
3. false?
Which of the following is not a common step in buying professional services?
1. stop all work by internal departments working on the project
2. have a clearly defined scope
3. develop a professional services database
4. develop a sound procedure for evaluation and selection of suppliers
5. optimise the supply base
6. develop a standardised contract