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What is the DuPont analysis? 


A)  A case study of the DuPont organization. 
B)  A cosmetic testing process. 
C)  A financial diagnostic tool to calculate the company's return on investment based upon sales margin and capital turnover ratio. 
D)  A tool used by the Boston consulting Group to identify market opportunities.

E) None of the above
F) B) and C)

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What is expediting? 


A)  Following up on a purchase order to cancel it. 
B)  Following up on a purchase order to change the delivery date. 
C)  Following up on a purchase order to make sure that the supplier is being paid. 
D)  Following up on a purchase order to make sure that the supplier is going to perform as it has confirmed through the purchase order confirmation.

E) A) and D)
F) A) and C)

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Which of the following situations does not apply to a 'supplier partner' relationship? 


A)  A situation where a company has an ongoing buyer/seller relationship. 
B)  A situation involving a commitment over an extended period, 
C)  A situation involving the placing of purchase orders at a supplier without previously arranged conditions. 
D)  A situation involving a mutual sharing of information and a sharing of risks and rewards resulting from the relationship.

E) None of the above
F) All of the above

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Which of the following situations explains 'ordering'? 


A)  Ordering refers to the placing of purchase orders at a supplier against previously arranged conditions. 
B)  Ordering is when orders are placed directly at the supplier, without questioning the supplier's conditions. 
C)  Ordering refers to the placing of purchase orders at a supplier without previously arranged conditions. 
D)  Ordering is when orders are placed directly at the supplier and there is questioning of the supplier's conditions.

E) A) and B)
F) B) and D)

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Which of the following explains 'purchasing? 


A)  The management of the company's indirect activities in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions. 
B)  The management of the company's internal resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions. 
C)  The management of the company's distribution channels in such a way that the distribution of good and services is secured under the most favourable conditions. 
D)  The management of the company's external resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company's primary and support activities is secured under the most favourable conditions.

E) A) and B)
F) All of the above

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Which of the following are activities of the purchasing function? 


A)  Selecting the best possible supplier 
B)  Recruiting staff 
C)  Distributing goods and services 
D)  Financial control

E) C) and D)
F) B) and C)

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Which of the following situations explains a 'supplier partner' relationship? 


A)  A supplier partner is defined as a firm with whom a company has an ongoing buyer/seller relationship. 
B)  A supplier partner is defined as a firm with whom a company orders places directly at the supplier, without questioning the supplier's conditions. 
C)  A supplier partner is defined as a firm with whom a company has not yet completed a contractual agreement to supply. 
D)  A supplier partner is defined as a firm with whom a company supplies raw materials only.

E) B) and D)
F) All of the above

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Which of the following terms refers to products,indirect materials or consumable items which are necessary for keeping the organization running in general,and for the support activities in particular? 


A)  Maintenance, repair and operating materials. 
B)  Supplies 
C)  Consumables 
D)  Tangible goods

E) All of the above
F) A) and B)

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Which of the following is a consequence of a 'Request for Information (RFI) '? 


A)  Suppliers submit general information that may help them to qualify for a potential tender. 
B)  Suppliers are invited to submit a tender. 
C)  Suppliers are invited to submit general information that will result in them being awarded a supply contract. 
D)  Suppliers are invited to submit information that may help them to be contacted for the award of a future contract for supplying goods and services.

E) A) and B)
F) A) and C)

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Which of the following is a definition of cross-functional buying teams? 


A)  Generalists from user departments and buyers are put together in teams to develop specific sourcing and commodity strategies and plans. 
B)  Specialists from user departments and buyers are put together in teams to develop specific sourcing and commodity strategies and plans. 
C)  Generalists from user departments only are put together in teams to develop specific sourcing and commodity strategies and plans. 
D)  Specialists from buyers only are put together in teams to develop specific sourcing and commodity strategies and plans.

E) A) and B)
F) None of the above

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Which of the following are activities of the purchasing function? 


A)  Representing the company in legal matters. 
B)  Monitoring and controlling orders to secure supply. 
C)  Public relations. 
D)  Developing strategic corporate plans.

E) A) and B)
F) B) and C)

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Which of the following is not an explanation of 'corporate social responsibility'? 


A)  Developing business solutions which do not harm the needs of future generations. 
B)  Focusing on profit maximisation regardless of its consequences. 
C)  Balancing the interests of customers, employees, the environment and its shareholders, i.e. serving the needs of 'people, planet, profit'. 
D)  Contributing to a better world, a better environment and better labour conditions.

E) A) and B)
F) A) and C)

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Which term describes the purchasing of all materials,components and services that are used to support the company's infrastructure and back-office activities? 


A)  Components acquisition 
B)  Raw materials acquisition 
C)  Direct purchasing 
D)  Indirect purchasing

E) A) and B)
F) A) and C)

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Which of the following explains 'supply'? 


A)  Includes at least purchasing, materials management, incoming inspection and receiving. Supply is used when relating to buying based upon total cost of ownership in a manufacturing environment. 
B)  Purchasing 
C)  Includes at least incoming inspection and receiving. 
D)  Includes at least purchasing and materials management.

E) A) and B)
F) B) and C)

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Which of the following is a product of using the DuPont model? 


A)  This enables the procurement manager to demonstrate the sensitivity of the company's financial results to procurement savings. 
B)  A sectoral focus on project and process based activities. 
C)  A more commercial orientation. 
D)  Efficiency gains.

E) B) and C)
F) A) and C)

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Which of the following activities is not part of sourcing strategy? 


A)  Identifies for a certain category from how many suppliers to buy, what type of relationship to pursue, and type of contract to negotiate for. 
B)  Identifies for a certain category whether to source locally, regionally or globally. 
C)  Competitor analysis. 
D)  Identifies for a certain category from how many suppliers to buy, what type of relationship to pursue, and contract duration

E) C) and D)
F) A) and B)

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Which of the following is a consequence of a 'Request for Tender'? 


A)  Suppliers submit general information that may help them to qualify for a potential tender. 
B)  Suppliers are invited to submit a general tender. 
C)  Suppliers are invited to submit general information that will result in them being awarded a supply contract. 
D)  Suppliers are invited to submit a detailed bid which meets the requirements as laid down in the request for quotation against the lowest possible price (identical to request for tender) .

E) A) and C)
F) C) and D)

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Which of the following is a definition of procurement? 


A)  Procurement is all activities required in order to get the product from the supplier to its final destination. 
B)  Procurement is all activities required in order to get the product from the manufacturer to its final destination. 
C)  Procurement is all activities required in order to get the product from the supplier to the distributer 
D)  Procurement is all activities required in order to get the product from the distributor to its final destination.

E) None of the above
F) B) and C)

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Which of the following is a definition of a decision-making unit (DMU) ? 


A)  All those individuals and groups external to the purchasing decision-making process. 
B)  All those individuals and groups who participate in the purchasing decision-making process, who share some common goals and the risks arising from the decisions (identical to buying centre) . 
C)  All those individuals and groups who supply the organization. 
D)  All those individuals and groups who participate in the purchasing decision-making process but do not share its risks.

E) A) and B)
F) All of the above

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Which of the following explains 'sourcing'? 


A)  Finding and selecting the best possible source of supply on a worldwide basis. 
B)  Contracting and managing the best possible source of supply on a worldwide basis. 
C)  Finding, selecting, contracting and managing the best possible source of supply on a worldwide basis. 
D)  Finding, selecting, contracting and managing possible source of local supply.

E) B) and D)
F) A) and D)

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