PURCHASING AND SUPPLY MANAGEMENT Read the extract below taken from the following business case, Purchasing and supply chain management: Toyota (Business Cases, 2nd edition), and then answer questions 57 and 58.

The sustainability of suppliers is important for Toyota. Sustainability means firstly, that the supplier must be a viable business and the business must be able to adapt and survive into the future. Therefore, Toyota does not only purchase parts from suppliers, Toyota also develops suppliers capabilities.

57> The selection of Toyotas suppliers forms a crucial part of purchasing and supply management. Which one of the following would occur last during the selection process?

1 A shortlist is compiled.

2 Continuous evaluation of supplier performance.

3 Final choice of the supplier is made.

4 Requests for quotes are submitted.

58> Toyota does not only purchase parts from suppliers, but also develops suppliers capabilities. Supplier development will occur at which level of purchasing and supply planning?

1 Strategic level

2 Tactical level

3 Operational level

4 Functional level

59> Which one of the following best describes a closed tender?

1 A tender which is no longer valid.

2 A tender where the due date has lapsed, but no outcome was reached.

3 A tender where only specific suppliers were requested to tender.

4 A tender where an agreeable outcome was reached.

60> Nehuri is responsible for ordering the materials required to produce leather goods at the factory where he works. He makes use of a system where he only needs to focus on a specific item when the inventory levels of that item reaches the set ordering point. To make it even more convenient for Nehuri, he orders the same quantity every time he orders inventory. Which inventory-control system does Nehuri use?

1 The system of fixed-order quantities

2 The cyclical-ordering system

3 The materials-requirements planning system

4 The just-in-time system

61> A _____________ is compiled during the second step of the purchasing cycle, namely choice of suppliers.

1 requisition

2 register of suppliers

3 price list

4 order form

62> By its nature, brewing beer is a water-intensive process. By curbing the amount of water SAB uses to make their beer, they reduce their purchasing costs. This saving in purchasing costs results in a higher profit potential than if SAB had a similar increase in the sale of their beer. This is known as ______________ .

1 the time-value of money

2 inventory-holding

3 profit leverage

4 the contribution of marketing

63> Which one of the following represents a reason why the purchasing and supply function is important?

1 This function is responsible for ensuring sustainable profits through the selling of products.

2 It has an insignificant influence on the profitability of the business.

3 It is often the smallest spender of business revenue.

4 This function makes it possible for the business to sell its final products at competitive prices.

64> During a recession, there is a favourable buyers market. Why is this?

1 Materials are sold at a higher price as there are more economic activities.

2 Materials are bought at a lower price because of the decrease in demand.

3 Materials are bought at a higher price because of an increase in demand.

4 Materials are sold at a lower price as there are more economic activities.

65> Moses works for Studio Grant, an interior design company which also manufactures custom-made pieces for clients. He is the purchasing and supply manager and is responsible for purchasing the materials required to produce these bespoke pieces. Which one of the following options represents an inventory-ordering cost for Moses?

1 Cost of storage

2 Property tax

3 Insurance

4 Stationery

66> ____________ is the process of making materials, methods, practices and techniques uniform.

1 Standardisation

2 Specification

3 Grading

4 Certification

67 Carol is the purchasing manager for JDivine, a popular wedding photography business. She is responsible for assessing the purchasing and supply activities performed by JDivines purchasing and supply function. Carol is busy comparing the actual prices they have paid for their high quality photo paper from which their books are made with market prices in the industry. This is known as __________ .

1 cost-saving

2 price proficiency

3 supplier performance

4 purchasing cost

68> A/An _____________ structure allows buyers to purchase any material or service and process whatever requisitions or enquiries are placed on their desks.

1 general

2 specialist

3 informal

4 miscellaneous

69> Anja owns a bakery, Earth First, which bakes artisanal breads from almond flour. Nearly all the materials required for her artisanal breads are bought from one supplier, Lialmonde Inc. Which type of purchasing and supply organisational structure should Anja use at Earth First?

1 Centralised structure

2 Decentralised structure

3 Combination of decentralised and centralised

4 Single supplier structure

70> Anja wants to broaden Earth Firsts product range by adding other baked goods, such as muffins and croissants, to the menu. This will require new product development. Which one of the following would be an appropriate purchasing and supply objective for Anja?

1 To standardise materials.

2 To seek new suppliers.

3 To reduce suppliers.

4 To develop integrated systems.