Multiple Choice Questions

32. The five “right objectives” of purchasing are:

A) Quality, Quantity, Price, Time, Place
B) Cost, Service, Specs, Time, Quantity
C) Place, Time, Price, Ethics, Contract
D) Agent, Supplier, Contract, Price, Quantity
E) Logistics, time, Quality, Price, Quantity

Answer: A

33. The term supply management is broader than the purchasing function because it::
A) includes marketing
B) includes operations/production
C) includes managing relationships with suppliers
D) includes negotiating enforceable contracts
E) includes measuring the total cost of ownership

Answer: C

34. Strategic sourcing differs from tactical purchasing in that this activity periodically:
A) analyzes the organization’s spend
B) analyzes the supply market
C) develops sourcing strategy and plans
D) outsources basic business services such as security
E) A, B &C

Answer: E

35. Supply management’s impact on the bottom line includes the ability to increase sales by:
A) reducing the development time of new products by using cross functional teams including
suppliers
B) obtaining the lowest possible prices
C) finding suppliers with the fastest delivery times
D) all of the above
E) none of the above

Answer: A

36. “Lean Thinking” can help reduce total cost of ownership (TCO), this means the supply team in
the entire “chain” must work to:
A) lower conversion cost
B) reduce cycle time cost
C) reduce risk cost
D) reduce non-value costs
E) reduce processing costs

Answer: D

37. The major reason supply management can greatly improve a firm’s return on investment (ROI) is:
A) the reduction of post ownership costs
 B) the reduction of downtime costs
C) the reduction of quality costs
D) the reduction of acquisition cost
E) every dollar saved in purchasing is = to a new dollar of profit

Answer: E

38. The concept of a supply chain means we analyze and manage:

A) a chain or network of upstream suppliers
B) converters
C) original equipment manufacturers (OEM)
D) extractors
E) key suppliers

Answer: A

39. The term value chain means we include the supply chain in our analysis and management with:
A) end consumer
B) the downstream portion of the chain and distribution, such as marketing
C) channels of distribution
D) financial impact studies
E) opportunity cost

Answer: B

40. When we add the term networks to the supply and value chains, we are emphasizing the need to
focus on and interactively communicate with:
A) suppliers
B) distributors
C) final consumers
D) tiers of suppliers
E) all support organizations

Answer: C

41. The term extended enterprise is an extension of supply networks, we now have:
A) true value creation
B) real value maintenance
C) innovative and virtual integration
D) a network of firms collaborating in partnership
E) adaptive networks

Answer: D

42. In Appendix A, The “Mechanics of Supply Management”, the typical purchasing cycle for
materials starts with:
A) investigating and selecting the supplier
B) negotiating a contract
C) defining and describing the need
D) preparing the purchase order
E) communicating the need
 Answer: C

43. Which statement about SM is not true?

A) SM recognizes the global environment
B) SM is a philosophy
C) SM is synonymous with logistics
D) SM is proactive
E) SM spans functional boundaries

Answer: C

44. Which statement about SM is not true?

A) SM spans company borders
B) SM focuses on optimization of the supply chain
C) SM requires change from upper management
D) SM requires continuous improvement
E) SM relies on mathematical models

Answer: E

45. Which action is not necessary in implementing SM?

A) Senior management must recognize supply management's critical nature to the firm
B) Senior management must support the required transformation of supply management to
world class
C) Firms must know where they are in relation to where they want to be
D) Firms must benchmark best-in-class practices and develop metrics
E) Firms must force their suppliers into world-class compliance

Answer: E

46. Which bullet is not true of the clerical stage of SM?

A) Relationships: personal
B) Design: suppliers are involved
C) Bottom line impact: overhead
D) Reporting: very low level
E) Data: not available

Answer: B

47. Which bullet is not true of the clerical stage of SM?

A) Process Paperwork
B) Confirm actions of others
C) Emphasis: convenience
D) Total cost of ownership focus
E) Relationships: personal

Answer: D

48. Which bullet is not true of the mechanical stage of SM?

A) Engage in eCommerce II
 B) Transactional focus
C) React to requisitions
D) Not involved in key source selections
E) Emphasis: purchase price

Answer: A

49. Which bullet is not true of the mechanical stage of SM?

A) Relationships: transactional and adversarial
B) Bottom line impact: revenue neutral
C) Active in source selection
D) Reporting: low level
E) Data: used to expedite

Answer: C

50. Which bullet is not true of the proactive stage of SM?

A) Coordinate procurement system
B) Develop suppliers
C) Long-term contracts
D) Involved in development of requirements
E) Not involved in key source selections

Answer: E

51. Which bullet is not true of the proactive stage of SM?

A) Involved in development of requirements
B) Short-term contracts
C) Plan for recurring requirements
D) Procurement adds value
E) Active in source selection

Answer: B

52. Which bullet is not true of the proactive stage of SM?

A) Near defect free materials and services
B) Emphasis: cost, quality and timeliness
C) Reporting: low level
D) Relationships: transactional and collaborative
E) Bottom line impact: profit contributor

Answer: C

53. Which bullet is not true of the proactive stage of SM?

A) Reporting: upper management
B) Data: facilitates sourcing and pricing
C) Fulfill social responsibilities
D) Confirm actions of others
E) Engage in electronic commerce

Answer: D
54. Which bullet is not true of the world-class stage of SM?
A) Supply management a core competence
B) Strategic sourcing
C) Bottom line impact: overhead
D) Manage risk
E) Emphasis: total cost relationships

Answer: C

55. Which bullet is not true of the world-class stage of SM?

A) React to requisitions
B) Relationships: transactional, collaborative and alliance
C) Bottom line impact: increase shareholder value
D) Reporting: member, executive group
E) Data: facilitates strategic planning

Answer: A

56. Which bullet is not true of the world-class stage of SM?

A) Monitor supply environment
B) Develop and implement commodity strategies
C) Supply base by design
D) Relationships: personal
E) Develop and manage alliances and networks

Answer: D

57. Which bullet is not true of the world-class stage of SM?

A) Time based competition
B) Bottom line impact: overhead
C) Virtually defect free materials and services
D) Leverage supplier technology
E) Integrated supply strategy

Answer: B

58. Which is not true about supply chains and networks?

A) The supply chain extends from the ultimate customer back to Mother Earth
B) The chain is viewed as a whole, a single entity rather than fragmented groups
C) Money enters the supply chain only when the ultimate customer buys a product or service
D) Supply chains are relatively easy to describe and visualize
E) The term supply chain is a more accurate description than supply network

Answer: E

59. Which of the following is generally not true about supply management and the bottom line?
A) Purchased items account for a large percentage of the cost of goods sold. Hence, a reduction
in cost of purchased goods has a major impact on the bottom line
B) A Euro increase in sales is equivalent to a Euro decrease in materials cost in impacting the
bottom line
 C) Outsourcing allows firms to focus on their core competencies, which reduced potential for
waste, which then can improve the bottom line
D) A dollar saved in materials cost is usually considered a dollar increase in profit, which
directly translates into bottom line savings
E) Supply management can work collaboratively with suppliers to discover opportunities to
lower costs, which ultimately improves the bottom line

Answer: B

60. Which of the following is not one of The Four Phases of Supply Management?
A) Generation of Requirements
B) Sourcing
C) Pricing
D) Profit Sharing
E) Post Award Activities

Answer: D

61. Which of the following bullets is not true about supply management systems?
A) Supply management systems require software optimization models to run effectively
B) Virtually all firms have supply management systems
C) A cross-functional approach to supply management systems enables the lowest total cost
D) Carefully selected suppliers should also join in-house cross-functional teams in developing
supply management systems
E) Supply management systems that include reverse auctions, exchanges, and real-time
electronic transmissions only increase the importance of supply management

Answer: A

62. Which of the following is not a strategic supply management activity?

A) Activity Based Costing
B) Environment Monitoring
C) Integrated Supply Strategy
D) Commodity Strategies
E) Data Management

Answer: A

63. Which of the following is not a strategic supply management activity?

A) Corporate Strategic Plans
B) Simulation Modeling
C) Strategic Sourcing
D) Strategic Supply Alliances
E) Supply Chain / Supply Networks

Answer: B

64. Which of the following is not a strategic supply management activity?

A) Environment Monitoring
B) Supply Chain / Supply Networks
C) Operations Research
 D) Social Responsibilities
E) Understand Key Supply Industries

Answer: C
Multiple Choice Questions

21. The importance of supply management in any specific firm is determined by the following
factors:
A) availability of materials and services
B) absolute dollar volume of purchases
C) percentage of product cost represented by materials and services
D) types of materials and services purchased
F) All of the above

Answer: E

22. Of the purchasing/supply responsibilities and activities, ______ becomes more important as the
function becomes responsible for supply and value network chains:
: A) buying supply management
B) executive management
C) strategic planning and research work
D) contract and relationship management
E) Supplier liaison work

Answer: C

23. Managing supplier relationships, contracts, placement of purchase orders and other transaction
focused activities are _____ responsibilities:
: A) strategic
B) short term
C) long term
D) operational
E) action

Answer: D

24. Aside from reducing potential duplication of efforts, the major advantage of centralized
purchasing is:
: A) improved inventory control
B) leveraged volume purchasing
C) consolidation
D) transportation savings
E) lower administrative costs

Answer: B

25. When a firm’s major activity is research and development, the firm will most likely use:
: A) centralized purchasing
B) headquarter purchasing
C) decentralized purchasing
D) hybrid purchasing structure
 E) a specialized purchasing staff at headquarters

Answer: C

26. E-commerce has facilitated the use of:

: A) centralized purchasing
B) decentralized purchasing
C) hybrid purchasing
D) none of the above
E) A, B & C

Answer: C

27. The materials management organization structure paved the way for _____ structure:
: A) value network chain structures
B) supply chain management structure
C) procurement management structure
D) purchasing centralization
E) purchasing decentralization

Answer: B

28. The most significant advantage of the supply chain management structure is:
: A) it facilitated a total systems approach to stimulate integration
B) it uses the internet to extract key information
C) it increases the visibility of the purchasing department
D) it focuses management attention on quality
E) it reveals that inventory costs are often understated

Answer: A

29. Cross functional teams have proven to help:

: A) break down functional silos
B) reduce new product development time
C) facilitate integrated planning and coordination
D) stimulate engineering change management control
E) all of the above

Answer: E

30. The key prerequisite to having cross functional teams is:

: A) effective team leaders
B) qualified team members
C) a clear team charter
D) adequate training
E) executive sponsorship

Answer: E
Multiple Choice Questions

34. Which of the following is not one of the three types of buyer supplier relationships presented in
 the textbook?
A) Transactional
B) Transcendental
C) Collaborative
D) Alliance

Answer: B

35. Which of the following is not a transactional relationship characteristic?

A) Long-term contract
B) An absence of concern
C) One of a series of independent deals
D) Costs, data and forecasts are not shared
E) Price is the focus of the relationship

Answer: A

36. Which of the following is not a transactional relationship characteristic?

A) One of a series of independent deals
B) Costs, data and forecasts are not shared
C) A minimum of purchasing time and energy is required to establish prices
D) Transactional purchases lend themselves to e-procurement
E) Parties work together to develop designs

Answer: E

37. Which of the following is not a disadvantage of transactional relationships?

A) Lowest Total Cost of Ownership is usually forced out of suppliers
B) Suppliers provide the minimum service required
C) Less effective performance by suppliers
D) Customers are subject to more supply disruptions
E) Supplier is not motivated to invest time and energy development of buyer's products

Answer: A

38. Which of the following is not a disadvantage of transactional relationships?

A) Potential for communication difficulties
B) Expediting and monitoring of incoming quality
C) Inflexible when flexibility may be required
D) No inspection needed due to low prices
E) Tend to result in more delivery problems

Answer: D

39. Researchers Stanley and Pearson found that there are three most important factors in a successful
buyer-supplier relationship. Which of the following is not one of the factors?
A) Two-way communication
B) Paying a fair and reasonable price
C) The supplier's responsiveness to supply management's needs
D) Clear product specifications
 Answer: B

40. Which of the following is not one of the outcomes that collaborative relationships tend to foster?
A) Longer term contracts
B) Reduction of risk for suppliers
C) Reducing total costs
D) A focus on price
E) Improvement of processes

Answer: D

41. Which of the following is not one of the outcomes that collaborative relationships tend to foster?
A) Decreased information sharing
B) Increased investment in R & D
C) Increased investment in training
D) Increased investment in equipment
E) Better focus on customer needs

Answer: A

42. Which of the following is not one of the benefits of supply alliances?
A) Lower total costs
B) Reduced time to market
C) Increased inspection levels
D) Improved technology flow from suppliers
E) Improved continuity of supply

Answer: C

43. Which of the following is not an attribute of alliances?

A) Continuous improvement
B) Contracts that are difficult to interpret
C) Interdependence and commitment
D) Atmosphere of cooperation
E) Informal interpersonal connections

Answer: B

44. Which of the following is not an attribute of alliances?

A) Internal infrastructures to enhance learning
B) Openness in all areas of the relationship
C) Negotiations result in one winner
D) A living system
E) A shared vision of the future

Answer: C

45. Which of the following is not an attribute of alliances?

A) Ethics take precedence over expediency
B) Adaptable in the face of change
C) Penalties are used to guide performance
 D) Win-win negotiations
E) Executive level commitment

Answer: C

46. Which of the following is not one of the issues that affect a supplier's assessment of a buying
firm?
A) Cash Flow
B) Openness and Approachability
C) Availability
D) Professionalism
E) Gifts and gratuities

Answer: E

47. Which of the following is a situation wherein an alliance may be appropriate?

A) Price Volatility
B) Synergistic collaborative design opportunities exist
C) Demand Volatility
D) High Switching Likelihood with High Switching Costs
E) No Partnership/Alliance-Capable Supplier for the Item

Answer: B

48. Which of the following is a situation wherein an alliance may be appropriate?

A) Demand is Stable
B) No Partnership/Alliance-Capable Supplier for the Item
C) No Partnership/Alliance-Capable Supplier in the Geographic Area
D) Rapid Technological Change
E) Mismatch of Clock Speed

Answer: A

49. Which of the following is a situation wherein an alliance may be appropriate?

A) Supplier Dependency Creation
B) Neglected Areas
C) Suppliers Seeking to Reduce Competition
D) Low Switching Likelihood with Low Switching Costs
E) No leverage from Partnership

Answer: D

50. Which of the following is a situation wherein an alliance may be appropriate?

A) High Switching Likelihood with High Switching Costs
B) No Partnership/Alliance-Capable Supplier in the Geographic Area
C) No Hard Savings from Partnership
D) No Internal Customer Buy-In
E) Price is Stable

Answer: E
51. Developing and managing collaborative relationships require supply professionals that possess
the all of the following skills and attitudes except one in the following list. Which skill in the
following list is not required?
A) Recognize the benefits of collaboration
B) Ability to identify, obtain and use data
C) Able to work in chaos and uncertainty
D) Agile, flexible, and highly
E) Ability to develop information systems

Answer: E

52. Which of the following is not an e-Commerce trap presented in the textbook?
A) Gilding the pig
B) The Magic pill
C) Shooting the moon
D) Supplier equality

Answer: C

53. Which of the following statements is not true about trust?

A) Trust is one of the key factors that differentiate the three classes of relationships.
B) The simplest definition of trust according to the textbook is “being confident that the other
party will do what it says it will do.”
C) Transactional relationships are completely void of trust
D) Some level of trust must be present in all three types of relationships
E) The level of trust increases with collaborative relationships and becomes an essential
characteristic with strategic alliances

Answer: C

54. Which of the following is not an attribute of institutional trust?

A) Trust exists if it is written into a contract
B) Developed over time
C) Internal trust is developed before external trust
D) Based on individual and institutional integrity
E) It is greater than individual trust.

Answer: A

55. Which of the following is not an attribute of institutional trust?

A) It can be developed quickly
B) Trust and relationship are viewed as investments
C) Partners have access to other's strategic plans
D) Relevant costs and forecasts are shared
E) When key individuals leave, fingerprints are left behind that hold the relationships together

Answer: A

56. Which of the following is not an attribute of institutional trust?

A) Informal agreements are as good as written
B) Tactical plans are shared, but not strategic plans
 C) Both parties are sensitive to the cultural bridge
D) Relationship is adaptable in the face of change
E) Both firms recognize the interdependency

Answer: B

57. Which of the following is not an attribute of institutional trust?

A) Sharing information is a means of developing trust
B) Based only on institutional integrity
C) Conflict in the relationship is openly addressed
D) Rights, desires, and opinions are considered
E) Firms have mutual goals

Answer: B

58. Which of the following is not an attribute of institutional trust?

A) Recognizes trust has different cultural meanings
B) Both CEO's make a personal investment
C) Senior managers from both firms commit
D) Sharing of information is discouraged
E) Ethical issues are freely brought up without fear

Answer: D

59. Which of the following is not an action to develop and manage trust?
A) An inter-firm team is appointed
B) Discussions conducted in an atmosphere of respect
C) A team of attorneys is appointed to manage the relationship
D) Inter-firm team receives guidance and training in the implementation of practices
E) Listening, understanding, time, energy are invested

Answer: C

60. Which of the following is not an action to develop and manage trust?
A) Senior leaders at both firms act as champions
B) A communication system is developed
C) Base negotiations on the zero-sum game
D) Actions to develop and measure trust are created
E) Risks and rewards are addressed openly

Answer: C

61. Which of the following is not an action to develop and manage trust?
A) Hold back critical information from the alliance partner, just in case
B) Negotiation is used as a trust-building opportunity
C) Both firms work together on technology plans
D) Technical personnel from both firms visit the other
E) Contractual relations are designed to enhance trust

Answer: A
62. Which of the following is not an action to develop and manage trust?
A) Contract relations focus on continuous improvement
B) Team and relationship skills are developed early
C) A contracting philosophy and a legal infrastructure are designed to the relationship
D) Develop multiple backup suppliers to assure continuity of supply
E) Institutional trust is measured and managed

Answer: D

63.The Quaker Oats case history demonstrates that in addition to having the trust required to form an
alliance:
A) Both parties must have mutual respect
B) Volume quantities must be fixed
C) There is still a need for a comprehensive contract, including such questions and answers as
“what if”?
D) It is not necessary to have open book accounting
E) Legal provisions are still necessary

Answer: C

19. Which of the following is not one of the four formats for statements of work?
A) Performance S.O.W., which details everything the buyer wants
B) Functional S.O.W., which defines what the buyer is “trying to do”
C) Design S.O.W., which is the most detailed type of statement of work
D) Development S.O.W., which specifies the assistance that a buying firm must provide the
supplying firm during the length of the contract
E) Level-of-Effort S.O.W., which is a specialized version of the performance statement of work

Answer: D

20. Which is usually not included in planning the statement of work?

A) Work approvals
B) Process flows in the supplier's facility
C) Use of subcontractors
D) Authorized personnel
E) Exhibits, schedules, and attachments

Answer: B

21. Which is usually not included in planning the statement of work?

A) Second and third tier supplier obligations
B) Description of the work
C) Schedule
D) Specifications and requirements
E) Quality requirements

Answer: A

22. Which is usually not included in planning the statement of work?

A) Performance measurements
B) Deliverables
 C) Delivery and performance schedule
D) Service levels
E) Local buying requirements

Answer: E

23. Which is usually not included in writing the SOW?

A) Quality monitoring system
B) Total cost of ownership
C) Personnel plan
D) Performance and payment bonds
E) Metrics

Answer: B

24. Which of the following is not one of the tips on writing an effective S.O.W. given in the
textbook?
A) Explain the interrelationship between tasks
B) Identify all constraints and limitations
C) Include standards that will make performance measurement possible and meaningful
D) Include clause for punitive damages to assure compliance
E) Be clear about phase requirements

Answer: D
 25. Which of the following is not one of the tips on writing an effective S.O.W. given in the
textbook?
A) Be clear
B) Use active, not passive tenses
C) Utilize legalese to hide negative issues
D) Be precise
E) Spell out the buyer's obligations carefully

Answer: C

26. Which of the following is not one of the tips on writing an effective S.O.W. given in the
textbook?
A) Limit abbreviations to those in common usage
B) Include procedures
C) Do not over specify or overstate
D) Always integrate escape clauses
E) Eliminate extraneous statements

Answer: D

27. Which of the following is not a tip given in the textbook for selecting service contractors?
A) Partner with users
B) Engage in reciprocity
C) Learn from the past
D) Update specifications
E) Minimize assumptions

Answer: B

28. Which of the following is not a tip given in the textbook for selecting service contractors?
A) Minimize assumptions
B) Encourage questions
C) Facilitate comparison
D) Play hardball
E) Plan evaluation

Answer: D

29. Which of the following is not an alternative method of purchasing construction services presented
in the textbook?
A) Conventional Method
B) Cost Plus Discretionary Expenses
C) Design and Build, Agreed Price Method
D) Design and Build, Cost-Reimbursable Method
E) The Owner as a Contractor

Answer: B

Multiple Choice Questions

12. Which of the following is not true about outsourcing?

 A) Outsourcing is increasing rapidly in not just materials, many business functions are being
outsourced
B) Outsourcing should be used for all materials when suppliers are available
C) Outsourcing can enable leveraging of the supplier's expertise and increases in innovation
D) Outsourcing can result in lower staffing levels
E) Outsourcing can result in reduced costs and more flexibility

Answer: B

13. Which of the following is not a strategic issue in making the outsourcing decision?
A) The Issue of Short-term Vulnerabilities
B) Core Competencies
C) Supplier Dominance
D) The Creation of Strategic Vulnerabilities
E) The Dangers of Vertical Integration

Answer: A

14. From a strategic level, which of the following items is the most logical to outsource?
A) An item that can be bought and sold in a commodity exchange
B) An item that is critical to the success of the product
C) An item that requires specialized design, manufacturing skills or equipment
D) An item that fits well within the firm's core competencies

Answer: A

15. Which of the following is not a reason to investigate the make or buy decision at the tactical
level?
A) If you currently outsource and the supplier suddenly has poor performance
B) Changing sales demand in the short term
C) Restricted manufacturing capability due to a breakdown
D) Increased manufacturing capability exists due to reduced sales of other items
E) If the part under consideration is still in the design stage

Answer: E

16. Which of the following is a consideration that favors buying a product?

A) Cost considerations make in-house production less costly
B) Desire to integrate plant operations
C) Stable work force is desired in a period of rising sales
D) Use of excess plant capacity
E) Control over production

Answer: C

17. Which of the following is a consideration that favors buying a product?

A) Control over quality
B) Multiple-source policy
C) Design secrecy required
D) Unreliable suppliers
E) Desire to maintain a stable work force in a period of reduction of sales
 Answer: B

18. Which of the following is a consideration that favors making a product?

A) Unreliable suppliers
B) Stable work force is desired in a period of rising sales
C) Multiple-source policy
D) Indirect managerial control considerations
E) Procurement and inventory considerations

Answer: A

19. Which of the following is a consideration that favors making a product?

A) Limited production facilities
B) Cost considerations dictate that it is less expensive to buy
C) Desire to maintain a stable work force in a period of reduction of sales
D) Small-volume requirements
E) Suppliers' specialized know-how

Answer: C

20. Which of the following is a major element typically included in a “to buy” cost analysis?
A) Delivered purchased material costs
B) Transportation costs
C) Direct labor costs
D) Any follow-on costs stemming from quality and related problems
E) Incremental inventory carrying costs

Answer: B

21. Which of the following is a major element typically included in a “to buy” cost analysis?
A) Incremental factory overhead costs
B) Incremental managerial costs
C) Incremental purchasing costs
D) Incremental costs of capital
E) Receiving and inspection costs

Answer: E

22. Which of the following is a major element typically included in a “to make” cost analysis?
A) Direct labor costs at your facility
B) Purchase price of the part from the supplier
C) Transportation costs
D) Receiving and inspection costs of incoming goods
E) Any follow-on costs related to quality or service provided by the supplier

Answer: A

23. Which one of the following points is not a reason that Netsourcing has become popular?
A) Netsourcing enables a quick e-business presence
B) Netsourcing provides supply managers that flexibility to make changes
 C) Netsourcing can help create a sustained performance
D) Netsourcing can provide support without the need to train or hire specialized personnel
E) Netsourcing can completely replace supply management using intelligent agents

Answer: E

24. Which one of the following points is not a reason that the Make-or-Buy Decision is often a
volatile decision?
A) Rigid formulas and rules of thumb are often used, which are often a poor choice to apply
B) The make-or-buy question is influenced by a multitude of diverse factors that are constantly
changing
C) Companies do not support promotions based on cost savings
D) The relevant factors for the decision often vary immensely from one firm to another
E) Companies often do not periodically evaluate the effectiveness of their past decisions to
generate information helpful in guiding future decisions

Answer: C

25. Which of the following points is not considered a danger of outsourcing?

A) Loss of control
B) Loss of client focus
C) Loss of centralization
D) Loss of clarity
E) Loss of cost control

Answer: C

26. Which of the following points is not considered a danger of outsourcing?

A) Loss of cost control
B) Ineffective management
C) Loss of confidentiality
D) Double outsourcing
E) Lack of responsibility

Answer: E

27. Which of the following activities or steps was not included in the typical framework for
outsourcing provided in the textbook?
A) Development of a strategic roadmap
B) Development of a decision flowchart
C) Development of a tactical roadmap
D) Development of a transition back plan
E) Development of a review system

Answer: C