Chapter 18 – Performance Measurement and Evaluation

Why do managers measure purchasing performance?
1. to support better decisions
2. to support better communications
3. provide performance feedback
4. motivate and direct behaviour
5. all of the above
Effectiveness and efficiency mean exactly the same thing. Is this:
1. true?
2. usually true?
3. false?
Which of the following is not a common problem with measuring performance?
1. use of the wrong measures
2. using the wrong data
3. short-term focus
4. lack of detail
5. encourage the wrong performance
6. measure accomplishments rather than behaviour
Which of the following is a general type of performance measure for purchasing?
1. time and response measures
2. revenue measures
3. cost effectiveness measures
4. price performance measures
5. quality measures
6. all of the above
Which of the following is not a general type of performance measure for purchasing?
1. annual number of purchases
2. technology and innovation measures
3. asset management measures
4. administration and efficiency measures
5. governmental and social measures
6. strategic performance measures
Which of the following is not a common measure of price performance in purchasing?
1. total annual cost of purchases
2. target prices achieved
3. actual price compared with market index
4. price comparisons between facilities
5. actual price compared with plan
Measures of cost performance typically focus on either cost change, or cost avoidance. Is this:
1. true?
2. partly true?
3. false?
In some circumstances, purchasing can generate revenues, rather than being a pure cost function. Is this:
1. true?
2. largely false?
3. false?
Which of the following might measure purchasing’s time and responsiveness performance?
1. cycle-time
2. return on assets
3. on-time delivery
4. time-to market for new products
5. responsiveness
Which of the following might measure purchasing’s asset management performance?
1. inventory costs
2. transport costs
3. defects per supplier
4. use of e-transactions
5. customer order performance
A performance measurement system consists of all the procedures to collect, analyse and report current data, needed to assess how well a department is performing its prescribed activities. Is this:
1. true?
2. sometimes true?
3. false?
Which of the following is not a key step in designing a performance management system?
1. determine which performance categories to measure
2. develop specific performance measures
3. establish performance objectives for each measure
4. draw a process chart of the related operations
5. finalise system details
6. implement and review system performance
Which of the following is not a desirable characteristic of performance measures?
1. uses available data
2. clarity
3. constant and unchanging
4. objectivity
5. directly related to organisational objectives
6. cannot be manipulated
Absolute measures are of much more use than comparisons. Is this:
1. true?
2. sometimes true?
3. false?
Which of the following can be used for performance comparisons?
1. historical performance
2. other internal operations
3. external organisations
4. all of the above
Benchmarking is a process for comparing an organisation’s performance with competitors’. Is this:
1. true?
2. partly true?
3. false?
Which of the following is not, commonly, a step in benchmarking?
1. planning
2. analysis
3. improvement
4. integration
5. action
6. maturity
What four factors are considered in a balanced scorecard?
1. finance, operations, marketing and human resources
2. inputs, operations, outputs and logistics
3. return on assets, liquidity, profitability and turnover
4. efficiency, effectiveness, productivity and utilisation
5. customer satisfaction, operational excellence, innovation and finance
Despite the variety of purchasing organisations, some general principles apply to most systems. Is this:
1. true?
2. partly true?
3. false?
You have now read and understood all of the associated text. Is this:
1. true?
2. partly true?
3. false?