Chapter 3 – Purchasing Strategy

Which type of decisions consider the longest time horizon?
1. management decisions
2. operational decisions
3. tactical decisions
4. strategic decisions
5. procurement decisions
Who, generally, make strategic procurement decisions?
1. marketing executives
2. senior purchasing managers
3. middle purchasing managers
4. junior purchasing managers
5. customers
Which of the following is not a common type of strategic decision?
1. environmental analysis
2. mission
3. corporate strategy
4. business strategy
5. functional strategy
A purchasing strategy is one of an organisation’s functional strategies. Is this:
1. true?
2. partly true?
3. false?
What does strategic alignment mean?
1. internal operations are co-ordinated to make a single product
2. there is an efficient flow of materials through each supply chain
3. all of an organisation’s strategies support each other
4. product designs are carefully matched to customer requirements
Which of the following is not usually a step in designing a purchasing strategy?
1. initiate the strategy design
2. analyse the production process
3. analyse the purchasing function
4. analyse the purchasing environment
5. design the details of the supply strategy
What name is often given to the person who initiates the design of a purchasing strategy?
1. project champion
2. project manger
3. project leader
4. operations manager
5. chief executive
Which of the following is not normally asked as part of a spend analysis?
1. how much does the organisation spend on purchases?
2. which suppliers receive most business?
3. what items are bought?
4. who is responsible for expediting?
5. are ordered items delivered properly?
Which of the following is not a type of product used in a portfolio analysis?
1. routine commodity
2. leverage
3. maintenance and repairs
4. bottleneck
5. strategic
Managers should find information about their purchasing environment from many different sources. Is this:
1. true?
2. partly true?
3. false?
Which, of the following, is not an element in Porter’s model of a business environment?
1. power of buyers
2. business strategy
3. substitute products
4. new entrants to a market
5. power of suppliers
If a business aim is to reduce costs, what are managers most likely to consider as an aim for a purchasing strategy?
1. reduced administrative costs
2. faster delivery of orders
3. higher stock levels
4. increasing the supply base
Once a purchasing strategy has been designed, actually implementing it is easy. Is this:
1. true?
2. partly true?
3. false?
Which of the following is not a common type of purchasing strategy?
1. global sourcing
2. total cost of ownership
3. efficient customer response
4. supplier development
5. longer term supplier relationships
Purchasing strategies within a particular company are likely to remain unchanged for a long period of time. Is this:
1. true?
2. partly true?
3. false?
Which of the following is not a stage in the general development of purchasing strategies?
1. fully integrated supply chains
2. limited integration
3. moderate development
4. supplier alliances
5. beginnings
How many organisations work with fully integrated supply chains?
1. all of them
2. most of them
3. some of them
4. a few
5. none