2. In order for JIT purchasing to be truly effective, which of the following factors need to be

in place?

I. The supplier base needs to be reduced.

II. Single source suppliers need to be used.

III. The supplier must be willing to hold the inventory.

IV. The schedule needs to have some stability.

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3. Which statement is true about the objectives of inventory management?

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4. Company A's purchasing department has been negotiating with a vendor for product 123.
The vendor has suggested the company commit to 20% of the vendor's output over the
next six months. This practice is known as:

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5. The field service technicians order replacement parts for repair purposes. This is an
example of:

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6. Providing suppliers with an MRP planning report allows the suppliers to do which of the

following?

I. Reduce the cost of raw materials

II. Schedule their plants more efficiently

III. Stabilize their workforce

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7. When the MRP reports are provided to suppliers for use in their planning, the planned
orders from those reports become the supplier's:

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8. The automatic updating of scheduled receipts by the computer should be used when:

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9. The major benefit for a supplier to develop a strategic alliance with a customer is:

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10. Often, companies will use cross-functional teams to develop new designs and get products to market. These cross-functional teams will very often include the appropriate suppliers in the design. This allows the product development activities to overlap each other, thereby, shortening the product development time. This process of overlapping activities in the product development cycle is called:

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11. A disciplined effort to compare the function performed by an item and its cost in an
attempt to find a lower cost alternative is called:

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12. The process of supplier evaluation rates suppliers on their ability to meet price targets,
quality specifications, and:

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