Operations And Supply Chain Management 9th Edition Roberta Russell – Test Bank

Chapter 11:
Global Supply Chain Procurement and Distribution

True/False

1. Outsourcing is a relatively new phenomenon used strictly by multinationals.
Ans: False
Difficulty: Moderate

Learning Objective: LO 1

2. Outsourcing and sourcing have the same meaning and are often used interchangeably.
Ans: False
Difficulty: Easy

Learning Objective: LO 1

3. Outsourcing involves sourcing from an outside supplier goods and services that were previously produced in-house.
Ans: True
Difficulty: Easy

Learning Objective: LO 1

4. Companies use outsourcing as a strategic move to transfer their core competencies to their suppliers.
Ans: False
Difficulty: Moderate

Learning Objective: LO 1

5. One of the advantages of outsourcing is that firms can focus on their core competencies.
Ans: True
Difficulty: Moderate

Learning Objective: LO 1

6. Outsourcing supports vertical integration of a firm’s supply chain.
Ans: False
Difficulty: Moderate

Learning Objective: LO 1

7. Many companies are outsourcing in countries where higher prices for supplies are offset by lower quality.
Ans: False
Difficulty: Moderate

Learning Objective: LO 1

8. Procurement involves the selection of a supplier.
Ans: False
Difficulty: Moderate

Learning Objective: LO 1

9. Purchasing from a supplier is called procurement.
Ans: True
Difficulty: Easy

Learning Objective: LO 1

10. Purchasing can be classified according to two broad categories: direct (manufacturing inputs) and indirect (operating inputs).
Ans: True
Difficulty: Hard

Learning Objective: LO 2

11. E-procurement is often used to purchase indirect products that support production.
Ans: True
Difficulty: Moderate
Learning Objective: LO 2

12. In a reverse auction a customer posts contracts for products available for bids from potential suppliers on the Internet.
Ans: True
Difficulty: Moderate