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Unformatted text preview: Chapter 12—The Purchasing Process TRUE/FALSE 1. As used in the purchasing process chapter, the term “goods and services” refers to raw materials, merchandise, supplies, fixed assets, or intangible assets. ANS: F 2. The purchasing manager usually performs major buying activities as well as performing the administrative duties of running a department. ANS: T 3. The purchasing supervisor is responsible for receiving incoming goods, signing the bill of lading presented by the carrier, reporting the receipt of goods, and making prompt transfer of goods to the appropriate warehouse or department. ANS: F 4. In many organizations professional buyers do the actual buying. ANS: T 5. Goal congruence exists when each individual managers' goals are achieved. ANS: F 6. The connections between an organization, including the flow of information, materials, and services from suppliers of merchandise and raw materials through to the organization’s customers, are its supply chain. ANS: T 7. When the data on the inventory record indicate a need to replenish the stock, the inventory system prepares a purchase order. ANS: F 8. The purchase requisition is sent from the inventory control department to the purchasing department. ANS: T 9. Supply chain management (SCM) is the combination of processes and procedures used to ensure the delivery of goods and services to customers at the lowest cost while providing the highest value to the customers. ANS: T 10. With continuous replenishment (CRP) a vendor obtains a buyer’s current sales, demand, and inventory data in real time and replenishes the buyer’s inventory. ANS: T 11. Notifications that a PO has been prepared and sent to the vendor are sent to the receiving department, the accounts receivable process, and the department or process that requested the purchase. ANS: F 12. Collaborative processes across the supply chain using a set of processes and technology models is called Collaborative Planning, Forecasting, and Replenishment (CPFR). ANS: T 13. A retailer could misread a demand signal doubling it’s normal order, and the wholesaler could respond and also double it’s order resulting in four times the retail order. This is an example of the bullwhip effect. ANS: T 14. According to the context diagram for the purchasing process, when a purchase order is sent to the purchaser, the vendor responds by sending the goods along with a packing slip. ANS: F 15. Reorder point (ROP) analysis reorders inventory when the item reaches a certain inventory level that was determined in advance based on the item's purchase rate. ANS: F 16. EOQ is a technique of analyzing all incremental costs associated with acquiring and carrying particular items of inventory....
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