Section $2$ Make$-$or$-$Buy and Outsourcing

internal suppliers.

$1)$ Outsourcing refers to transferring a firm's activities that have traditionally been external to

$2)$ Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

can be obtained externally.

$3)$ The objective of the make$-$or$-$buy decision is to help identify the products and services that

Section $3$ Six Sourcing Strategies

$1)$ With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.

$2)$ Vertical integration, whether forward or backward, requires the firm to become more specialized

$3)$ A fast$-$food retailer that acquired a spice manufacturer would be practicing forward integration.

$4)$ Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration.

$5)$ Long$-$term "partnering" relationships are one of the main goals of the "many suppliers" sourcing strategy.

$17)$ Which of the following is NOT an advantage of a virtual company?

A speed

B$)$ total control over every aspect of the organization

C$)$ specialized management expertise

D$)$ low capital investment

E$)$ flexibility

$21)$

is developing the ability to produce goods or services previously purchased or

actually buying a supplier or a distributor.

$10)$

describes using one supplier for a component and a second supplier for another

component, where each supplier acts as a backup for the other.

$10)$ Drop shipping:

A$)$ is equivalent to cross$-$docking.

B$)$ is the opposite of a blanket order.

C$)$ means the supplier will ship directly to the end consumer, rather than to the seller.

D$)$ is the same thing as keiretsu.

E$)$ is a good reason to find a new firm to ship your products.

$11)$ A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing which of the following?

A$)$ postponement

B$)$ cross$-$docking

C$)$ channel assembly

D$)$ drop shipping

E$)$float$$reduction