Chapter 11 Flashcards
(14 cards)
1
Q
- Firms do not compete only against global competitors, but against:
A
d. their competitors’ supply chains.
2
Q
- The percentage of value of shipments that come from materials for the average manufacturer is:
A
b. greater than or equal to 50 and less than or equal to 59 percent.
3
Q
- The ratio of earnings to sales for a given time period is the:
A
c. profit margin.
4
Q
- The analyst turned on his banker’s lamp, adjusted his eye shade, and slowly pulled a legal pad from his desk. His weathered hands punched the buttons on his desk calculator deliberately as he divided earnings by total assets in order to calculate:
A
a. return on assets.
5
Q
19. Flingers Inc., reveals the following information in their annual report for FY 2004. Earnings and Expenses Sales $10,000,000 Cost of goods sold $5,000,000 Pre-tax earnings $500,000
Selected Balance Sheet Items
Merchandise inventory $80,000
Total assets $2,000,000
What is Flingers’ return on assets?
A
c. 25%
6
Q
- The phenomenon that a dollar in cost savings increases pretax profits by a dollar, while a dollar increase in sales increases pretax profits only by the dollar multiplied by the pretax profit margin is known as the:
A
d. profit leverage effect.
7
Q
- The classic purchasing process begins with:
A
a. needs identification.
8
Q
- The cashier waved the can of golden hominy across the holographic bar code reader and it emitted a piercing beep. At the same time the customer’s bill was rising, the grocery store’s inventory was automatically being reduced by 1 can of golden hominy down to 3 cans. This was the bare minimum amount of hominy the store manager dared carry in inventory, so the computer system automatically sent a message to the hominy man, who loaded a few cases onto his delivery truck for tomorrow morning’s trip to replenish the store. This is a classic example of:
A
c. a reorder point system.
9
Q
- A description method used when a product or service is proprietary or when there is a perceived advantage to using a particular supplier’s product or services is:
A
b. description by brand.
10
Q
- A supplier that has previously demonstrated its performance capabilities through purchase contracts may well receive:
A
c. preferred supplier status
11
Q
- Terms and conditions for a purchased service that indicate what services will be performed and how the service provider will be evaluated are called a:
A
d. statement of work.
12
Q
- The two basic types of purchasing contracts are:
A
a. fixed-price and cost-based.
13
Q
- The purchasing team examined all of their purchasing patterns in order to identify any irregularities or possible areas of cost savings in a little scheme they liked to call:
A
c. spend analysis.
14
Q
- Which of the following is required in order to execute a successful spend analysis?
A
c. Ability to analyze large quantities of data.
