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Quiz about Purchasing is Easy the Professional Way

Purchasing is Easy, the Professional Way Quiz

After creating a few fun quizzes, I offer you now a more serious and informative quiz. Test yourself whether you are the right material to become a professional buyer.

A multiple-choice quiz by dutch_frank_65. Estimated time: 6 mins.

Author
dutch_frank_65

Time
6 mins

Type
Multiple Choice

Quiz #
256,216

Updated
Dec 03 21

# Qns
10

Difficulty
Tough

Avg Score
6 / 10

Plays
780

One at a Time - Single Page - Timed Game

Question 1 of 10

1. Which university gave its name to a comprehensive process description concerning purchasing and supply chain professionalism known as the MSU model by Monczka? Hint

Madrid State University

Moscow State University

Michigan State University

Mississippi State University

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Question 2 of 10

2. You are a buyer from a large company and a supplier gives you a nice gift like a fancy dinner for you and your spouse, a personal discount or an expensive case of wine. What is the actual intention of the supplier? Hint

Building a friendly relationship.

Making more profit in the future.

Utilizing his marketing budget for tax reasons.

Getting you drunk to get you to sign a contract while intoxicated.

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Question 3 of 10

3. You are a buyer from a large company and a supplier is in direct contact with somebody within your company to persuade him to buy their products.
In the purchasing profession, what do we call this situation? Hint

Backdoor selling

Misleading conduct

Bribery

Direct influence

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Question 4 of 10

4. In which of the following steps of the purchasing process is the contribution of a good buyer more valuable than in the other steps? Hint

Supplier selection

Creating purchase order

Supplier contracting

Determination specification

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Question 5 of 10

5. What does a buyer describe as "Goldplating"? Hint

Buying a product with a price that changes by the day.

A supplier selling you rubbish with a very convincing story.

Buying a product with a better specification than you actually need.

Buying a top brand product.

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Question 6 of 10

6. At what point in a purchasing process (not catalogue or contract buying) should you give your General Conditions of Purchase to your supplier? Hint

Together with your purchase order as it is printed on the back in gray.

Together with your request for proposal or quotation.

As soon as you receive the suppliers General Conditions of Sale.

Upon receiving the order confirmation from the supplier.

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Question 7 of 10

7. What do we call a system that generates purchasing orders based on actual production numbers? Hint

MRP - Material Requirement Planning

SPS - Stock Planning System

PPI - Production Purchase Initiative

KanBan system

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Question 8 of 10

8. A set of transportation conditions are agreed upon Globally so that there is no interpretation mistake about who pays for transport or who is responsible for insurance. According to these Incoterms, where is the transition point of risk in the condition FOB in case you do an international purchase? Hint

At the factory gate of the seller.

At the clearance area in the custom office in the country of the buyer.

At the factory gate of the buyer.

At the railing of the ship at departure.

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Question 9 of 10

9. Peter Kraljic, a Dutch businessman, described a portfolio model in which you can determine a purchasing tactic in a certain situation. Which tactic should you use in case the Kraljic model shows that the financial impact of a product is high but the risk of not being able to find these products on the market is low? Hint

Divide and conquer, have multiple suppliers bid against each other to lower the price due to competition.

Try to reach a strategic partnership with the supplier.

Make long term contracts to ensure deliveries.

Do not spend too much time on this product, try to use system contracting to lower the total procurement costs.

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Question 10 of 10

10. A supplier has not raised the price of a product for the third year in a row. What should your action be? Hint

Give the supplier a call and ask him if he did not make a mistake. You do not want a surprise during the year on your purchasing budget.

Don't contact the supplier, maybe he has forgotten to raise the price, enjoy it as long as it lasts.

You should wonder if you are not paying too much, and also whether you have paid too much in the past years.

Give the supplier a call and thank him for the fact that the price is so stable.

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Quiz Answer Key and Fun Facts

1. Which university gave its name to a comprehensive process description concerning purchasing and supply chain professionalism known as the MSU model by Monczka?

Answer: Michigan State University

Professor Robert M. Monczka Ph.D. developed an elaborate process description to guide companies to achieve purchasing and supply chain excellence known as the Global Procurement and Supply Chain Benchmarking Initiative
Monczka is also associated with the College of Business and the National Association of Purchasing Management at Arizona State University (ASU).

Answer: Making more profit in the future.

Make no mistake about it. Gifts and freebees are ways to influence your objective decision. Suppliers want to sell. Somewhere on the financial balance customers pay for these gifts so you actually pay the supplier to trick you into spending more.

3. You are a buyer from a large company and a supplier is in direct contact with somebody within your company to persuade him to buy their products. In the purchasing profession, what do we call this situation?

Answer: Backdoor selling

More common than you think. At the moment your internal contact comes to you to ask for assistance with this purchase, the supplier already determined most of the product specification. Your ability to negotiate or to alter specifications is limited.

4. In which of the following steps of the purchasing process is the contribution of a good buyer more valuable than in the other steps?

Answer: Determination specification

Common perception is that a buyer is worth most in the selection or contracting process. Study has shown however that an open-minded view of an objective buyer can save far more in the specification phase. Choices made there have a far greater effect than the result of a negotiation in the contracting phase.

5. What does a buyer describe as "Goldplating"?

Answer: Buying a product with a better specification than you actually need.

Goldplating is buying more than you actually need. That does not mean you get rubbish but you do end up paying a lot for extras you did not intentionally want and which are not functionally necessary. Buying a top brand product can be a form of Goldplating but goldplating is not buying a top brand product per definition.

6. At what point in a purchasing process (not catalogue or contract buying) should you give your General Conditions of Purchase to your supplier?

Answer: Together with your request for proposal or quotation.

It is very important that you are the first one to mention your General Conditions. If the supplier does not reject them with his quotation they are valid, which is in your favor. More often then not however, the quotation of the supplier is signed without somebody actually reading the General Conditions. Nasty surprise when things go pear shaped.

7. What do we call a system that generates purchasing orders based on actual production numbers?

Answer: MRP - Material Requirement Planning

KanBan is used to replenish actual production stock in a just in time environment. A MRP system calculates the items needed in a certain assembly using an exploded view. For instance; after producing one bicycle type 2 we used 1 frame, two tires 60 spokes etc. The System then calculates the stock level and generates automated purchase order to a contracted supplier.

Answer: At the railing of the ship at departure.

It actually means "Free On Board". As soon as the shipment passes the railing of the ship of departure the risk is transferred to the buyer. FOB is only used with sea freight.
The other answers:
The factory gate of the seller is Ex Works (EXW).
The factory gate of the buyer is Delivered Duty Paid (or Unpaid) DDP or DDU.
At the custom office buyer is Delivered At Frontier (DAF).

Answer: Divide and conquer, have multiple suppliers bid against each other to lower the price due to competition.

Ensuring deliveries is the tactic to be used with bottleneck products that are rare to find on the market.
System contracting is used in low costs articles like stationary and office supplies.
A strategic partnership is only used in situations with joined interest like co-makership, joint development etc.

10. A supplier has not raised the price of a product for the third year in a row. What should your action be?

Answer: You should wonder if you are not paying too much, and also whether you have paid too much in the past years.

The chance that the production price of that product goes down exactly as much as the inflation is going up are very slim. You are probably overpaying or you have been at least. Investigate!

Source: Author dutch_frank_65

This quiz was reviewed by FunTrivia editor Bruyere before going online.
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