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Exam 12: The Purchasing Process

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Question 71

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Which of the following is not a cost element as part of the inventory carrying costs?

A) insurance costs
B) property taxes
C) purchase order preparation costs
D) storage costs

E) A) and B)
F) A) and C)

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Question 72

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An employee has a ___________________________________ when he (she) has a financial interest (direct or indirect) in a company with which the employer does business.

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Question 73

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The control plan compare vendors for favorable prices, terms, quality and product availability is directed primarily at which of the following control goals?

The purchasing manager is evaluated by his/her supervisors based on purchasing inventory at the lowest price.Consequently, the purchasing manager knowingly orders materials only based on price.This has resulted in the purchase of inferior quality materials.This improved the purchasing manager's performance evaluation, but had a negative impact on production due to an increase in scrapped materials.This situation is an example of a failure of:

After the ____________________ has been selected, the ____________________ prepares a purchase order.

The purchasing process is part of the ____ process for a merchandising firm.

The document used to record merchandise receipts is called a(n) ______________________________.

With ______________________________ a vendor obtains a buyer's current sales, demand, and inventory data in real time and replenishes the buyer's inventory.

ABC analysis is a technique for ranking inventory items according to their relative importance.

______________________________ is a technique for ranking inventory items according to their relative importance.

Which of the following techniques has the reorder point based on each inventory item's sales rate?