Chapter 4 – Purchasing Organisation

The process of designing the structure, communications, division of labour, control and authority of a function is called:
1. structural development
2. organisational design
3. HRM
4. organisational charting
5. functional deployment
The person in charge of purchasing is called the Chief Purchasing Officer. Is this:
1. true?
2. sometimes true?
3. false?
The person with overall responsibility for purchasing should hold a senior position within an organisation. Is this:
1. true?
2. neither true nor false?
3. false?
Which of the following factors does not, generally, affect the position of purchasing within an organisation?
1. type of industry
2. total value of materials bought
3. history
4. ideas of the company founder
5. title used by the head of purchasing
There is a trend for heads of purchasing to be located higher in the organisation than they have been in the past. Is this:
1. true?
2. neither true nor false?
3. false?
Which of the following is not a core activity that is typically found within a purchasing department?
1. purchasing research
2. sourcing
3. market research
4. order follow-up
5. administration support
Which of the following is not an activity that is typically done within a purchasing department?
1. expediting
2. buying
3. outsourcing management
4. operational scheduling
5. purchasing research
There is currently a trend towards a vertical organisational structure, where each function is distinct, and has information passing through layers of specialised hierarchy. Is this:
1. true?
2. neither true nor false?
3. false?
Which arrangement, for purchasing, has all purchasing done centrally, typically in a corporate headquarters?
1. devolved purchasing
2. decentralised purchasing
3. centrally led purchasing
4. hybrid purchasing
5. centralised purchasing
Which of the following does not usually affect the choice of organisational structure?
1. level of competition activities
2. total purchase value
3. similarity of purchases
4. geographical spread
5. business strategy
Which of the following is not normally an advantage of centralised purchasing?
1. reduced duplication of purchasing effort
2. developing expertise
3. speed of response
4. consolidation of purchase volumes
5. standardisation
Which of the following is not normally an advantage of decentralised purchasing?
1. understanding local needs
2. ownership of decisions
3. better product development support
4. co-ordination of purchasing strategy and plans
5. responsiveness to customer demands
Which of the following is not a common form of hybrid purchasing structure?
1. devolved buying council
2. global buying committees
3. regional buying groups
4. lead division buying
5. corporate purchasing councils
Teams are always an effective way of making decisions in purchasing. Is this:
1. true?
2. neither true nor false?
3. false?
Which of the following is not a common problem of working with teams?
1. they need more effort to get results
2. there is no ownership of decisions
3. they encourage lower performance standards
4. they create conflict between members
5. they hide responsibility for decisions