Practice MCQ Questions - Reading Comprehension Practice Questions And Improve Your Skills

1

Which metric is commonly used to measure supply chain efficiency?

A.

On-time delivery (OTD)

B.

Employee turnover rate

C.

Marketing expenses

D.

Number of customer complaints

Answer & Solution

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Answer & Solution

Answer:

On-time delivery (OTD)

Solution:

OTD measures how effectively a company meets its delivery commitments.

2

The "total cost of ownership (TCO)" approach in procurement includes:

A.

Only the initial purchase cost

B.

Costs associated with a product over its lifecycle, including maintenance and disposal

C.

Supplier branding costs

D.

Ignoring long-term expenses

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Answer & Solution

Answer:

Costs associated with a product over its lifecycle, including maintenance and disposal

Solution:

TCO accounts for purchase price, operational costs, and disposal costs.

3

A "request for proposal (RFP)" is used to:

A.

Manage employee performance

B.

Store procurement records

C.

Approve supplier payments

D.

Invite suppliers to submit detailed bids for a project

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Answer:

Invite suppliers to submit detailed bids for a project

Solution:

RFPs ensure a structured supplier selection process by comparing proposals based on price, quality, and service.

4

In procurement, "supplier performance evaluation" is essential for:

A.

Ensuring suppliers meet quality, cost, and delivery expectations

B.

Eliminating long-term contracts

C.

Increasing procurement costs

D.

Ignoring supplier compliance

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Answer:

Ensuring suppliers meet quality, cost, and delivery expectations

Solution:

Regular supplier evaluations improve supply chain efficiency and risk management.

5

What is a key benefit of an e-procurement system?

A.

Increasing paperwork

B.

Reducing supplier collaboration

C.

Automation and digitalization of procurement processes

D.

Ignoring regulatory compliance

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Answer:

Automation and digitalization of procurement processes

Solution:

E-procurement enhances speed, transparency, and cost savings in purchasing.

6

The best procurement strategy for risk mitigation is:

A.

Single-sourcing from an unverified supplier

B.

Multi-sourcing and supplier risk assessment

C.

Ignoring supplier audits

D.

Reducing procurement tracking

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Answer:

Multi-sourcing and supplier risk assessment

Solution:

Diversifying suppliers reduces dependency and enhances resilience in procurement.

7

The purpose of a "blanket purchase order (BPO)" is to:

A.

Increase procurement complexity

B.

Ignore price negotiations

C.

Reduce supplier competition

D.

Establish long-term agreements with suppliers for recurring purchases

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Answer:

Establish long-term agreements with suppliers for recurring purchases

Solution:

A Blanket Purchase Order (BPO) is a long-term agreement between a buyer and a supplier that streamlines procurement for recurring purchases of goods or services over a specified period. Instead of issuing multiple purchase orders for each transaction, a BPO allows a company to place multiple orders under a single agreement, reducing administrative effort and ensuring consistent supply.