Study Guide for Chapter 6:

1. What is a spend analysis?

2. Describe the strategic sourcing process from start to finish.
3. Describe the portfolio analysis matrix tool and how it is used to develop
supply management strategies.
4. What are the major types of supply management strategies?
5. Why must organizations develop suppliers? Is supplier development a longterm trend? Explain.
6. What do you think are the reasons why there are so few companies classified
as Stage 4 companies?
7. What are the tools to conduct market research on suppliers? Briefly explain
each.
8. A/An _____ refers to a specific family of products or services that is used in
delivering value to the end customer.

a. spend analysis
b. decentralized structure
c. category *
d. centralized structure
e. hybrid structure
9. A _____ is concerned with (1) the scope or boundaries of each business and the
links with corporate strategy and (2) the basis on which the business unit will
achieve and maintain a competitive advantage within an industry.

a. commodity strategy
b. corporate strategy
c. business unit strategy *
d. functional strategy
e. supply management strategy
10. A/An _____ is an annual review of a firms entire set of purchases.

a. cost analysis

b. price analysis
c. make-buy analysis
d. technology roadmap
e. spend analysis *
11. Which of the following is not one of Porters five forces?

a. Buyer bargaining power.

b. Switching costs. *
c. Threat of new entrants.
d. Market internal competition.
e. Supplier bargaining power.

12. The _____ is a solicitation document that is used by organizations to obtain

general information about services, products, or suppliers and is used generally
before a specific requisition of an item is issued.

a. e-auction
b. PO
c. RFP
d. RFI *
e. RFQ
13. _____ is a tool to structure and segment the supply base and is used as a means
of classifying suppliers into one of four types.

a. The supplier evaluation scorecard

b. Portfolio analysis matrix *
c. Make-buy analysis

d. Price analysis
e. Value chain analysis
14. Which of the following is not one of the four categories found in a portfolio
analysis matrix?

a. Critical.
b. Routine.
c. Leverage.
d. Substantial. *
e. Bottleneck.
15. A _____ has unique requirements or niche suppliers, yet are significant to the
business.

a. critical commodity
b. bottleneck commodity *
c. matrix commodity
d. routine commodity
e. leverage commodity
16. In supplier evaluation, different aspects of _____ include managements
commitment to continuous process and quality improvement, overall
professional ability and experience, ability to maintain positive relationships with
its workforce, and managements willingness to develop a closer relationship
with the buyer.

a. management capability *
b. process and design capabilities
c. financial condition and cost structure
d. planning and control systems
e. environmental regulation compliance

17. A/An _____ has demonstrated its performance capabilities through previous
purchase contracts and therefore receives preference during the supplier
selection process.

a. commodity supplier
b. preferred supplier *
c. sole source supplier
d. supplier responding to a RFQ
e. online catalog supplier
18. _____ is the process of determining the appropriate number and mix of suppliers
to maintain.

a. Make-buy analysis
b. Competitive bidding
c. Supply base optimization *
d. Portfolio analysis
e. Price analysis
19. Which of the following is false regarding Phase 1 of supply management
strategy development?

a. Supply management is often characterized as a lower-level support function.

b. The primary role of supply management is to ensure that enough supply
capacity exists.
c. Performance measures focus on efficiency-related measures and price
reduction.
d. The amount of resources for improvement is limited, usually because the
highest ranking supply manager likely reports to manufacturing or materials
management.
e. Supply management strategies are established and integrated early into the
product and process design stage. *

20. A/An _____ is often used in regularly scheduled review meetings with suppliers,
so that deficiencies in performance can be noted, discussed, and acted upon.

a. supplier scorecard *
b. make-buy analysis
c. competitive bidding process
d. portfolio analysis
e. cost analysis