If demand for cigarettes is relatively inelastic, how should a government implement a $1 per pack excise tax on cigarettes if the government's goal is to minimize cigarette consumption?
Correct Answer: D
Question 52
The price of raw materials for a critical product is highly volatile. The supplier will not commit to long-term pricing due to the dramatic swings of raw material price. In this situation, the buying organization should
Correct Answer: D
In the context of highly volatile raw material prices, the buying organization should D. allow the supplier to change pricing on a fixed schedule based on a price index with a maximum allowable change. This approach allows for a structured and predictable method of adjusting prices in response to market conditions, while also setting a cap on the maximum change to protect the buying organization from extreme price fluctuations123.
Question 53
A supply manager receives negative feedback from internal stakeholders about several suppliers. However, the scorecards for these suppliers have been positive over the past few quarters, and any diminished performance is not reflected. Which of the following MOST likely explains this situation?
Correct Answer: A
* Review Stakeholder Feedback: Understanding the nature of the negative feedback is the first step. * Analyze Scorecard Metrics: If the scorecards have been positive, but the feedback is negative, it suggests a misalignment. * Identify Changes in Requirements: Stakeholders' needs and expectations might have evolved, and these changes may not be reflected in the current scorecard metrics. * Adjust Metrics Accordingly: The scorecards should be updated to align with the new requirements to ensure they accurately reflect supplier performance. References * Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning. * van Weele, A. J. (2018). Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice. Cengage Learning.
Question 54
DEF Inc. receives several batches of inferior quality products from a supplier. Although all of the samples provided by this supplier met or exceeded specifications, it is learned that the facility used to produce the samples is in a different location than the regular production facility, and that the production environment could affect quality. DEF could have prevented this situation by doing which of the following?
Correct Answer: A
* Requesting and Testing Samples from All Possible Supplier Manufacturing Locations: This would have ensured that DEF Inc. tested the quality of products from the actual production facility, not just the sample facility. * Requesting Larger Samples: While this might help, it doesn't address the issue of different production environments potentially affecting quality. * Requiring Assurance from Supplier: This is important but not sufficient by itself. The assurance doesn't substitute for actual testing from the correct facility. * Stricter Quality Controls at Receiving Dock: This is a reactive measure and doesn't prevent the problem from occurring in the first place. References * Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning. * Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply Management. McGraw-Hill Education.
Question 55
A company sold a piece of equipment to another party for $150,000. The equipment was originally purchased for $300,000. Depreciation of $200,000 had been recognized against the equipment. How would the accounting equation for the company be impacted upon the disposal of the equipment?
