Multiple Choice Questions on Sourcing

Which of the following best describes the primary objective of purchasing in a supply chain?

• Minimizing the number of suppliers

• Acquiring goods and services at the lowest possible cost, on time, and meeting quality standards

• Maximizing inventory levels for safety

• Outsourcing all procurement activities

What is the first step in the typical purchasing process?

• Issuing a purchase order

• Identifying needs

• Evaluating supplier performance

• Receiving and inspecting goods

In a purchasing policy, what is the main purpose of establishing purchasing authority levels?

• To centralize all procurement decisions

• To define who can approve purchases at various monetary thresholds

• To eliminate the need for approvals

• To outsource procurement

Which document is typically used to formalize the need for goods or services in an organization?

• Purchase order

• Requisition

• Invoice

• Delivery note

What is the primary advantage of centralized purchasing?

• Increased flexibility for each department

• Better coordination, standardization, and economies of scale

• More opportunities for local suppliers

• Reduced need for procurement staff

Which of the following is NOT a typical step in the purchasing process?

• Identifying needs

• Vendor negotiation

• Product design

• Invoice and payment

What is a blanket purchase order?

• An order for a single, fixed quantity

• A preauthorized set amount for recurring purchases from a vendor

• An order placed without approval

• A purchase order for capital equipment only

What is the purpose of competitive bidding in procurement?

• To reduce the number of suppliers

• To ensure transparency and obtain the best value for the organization

• To increase procurement cycle time

• To avoid contract negotiations

Which of the following is considered an unethical practice in purchasing?

• Evaluating multiple suppliers

• Accepting gifts or favors from suppliers to influence decisions

• Using supplier scorecards

• Conducting regular audits

In supplier evaluation, which criterion is LEAST likely to be considered?

• Price

• Delivery performance

• Supplier's website design

• Quality