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MAKERERE Ul"1"1VERSITY BUSI~"ESS SCHOOL
COlJRSE WORK TEST ONE FOR THE BACHELOR OF COMMERCE A~1) THE
BACHELOR OF BUSTh"ESS ADMINISTRATION OF MAKERERE CNIVERSITY
. ACADEMIC Y~AR 2018/19 . . ,

SEMESTER:
TWO
TWO
YEAR: PRINCIPLES OF PURCHASING AND SUPPLIES
COURSE:
MANAGEMENT
. COURSE CODE: PSM2204
23rd FEB, 2018
DATE;
11:00AM - 12:00 PM
......................
TIME: ····· ......................................................................................... .
INSTRUCTIONS .
• There are two sections, A and B
• Section A, CIRCLE the most correct answer
• Section B, indicate whether TRUE or FALSE
• A TEMPLATE has been provided to put your answers
·.················· ............................................................................................................................ ,............ .
SECTION A
1. The five rights of purchasing are more pronounced in;
A. Performance Centered Purchasing
B. Process Centered Purchasing
C 1 Relational Centered Purchasing.
D. Product Centered Purchasing
E. Price Centered Purchasing

2. Which of the followillg isn't a component of a purchase order?

A. Delivery Date
B. Contract Termination Date .
C. Delivei;y Quantity
D. Unit Price
E. Place Of Delivery

3. BATNA refers to ·
A. Basic Alternative To Negotiated Agreement
B. Best Alternative To Negotiated Agreement
C. Better Agreement Negotiated Act To
D. Big Alternative To Negotiated Agreement

4 . Information during negotiation is mainly gathered at the

A. Pre-negotiation Phrase
B. Actual Negotiation Phrase
C. Post Negotiation Phrase
I
· D. ·Formal Negotiation Phrase

5. How can an agenda help negotiation?

A. Keeps the discussion focused
·B. Provides roles of each p?rty
C. Promotes. your BATNA .
\\

2
D, Establishes the issues, gives structure, defines the order in which the issues are
discussed, introduces process issues·, sets time limits \ \
6. The document that informs the buyer that goods have been dispatched is called.
A. Quotation
B. Delivery note \
C. Goods collection note
D. Advice note
E. Order acknowledgement note

7. The tactic of consistently demanding for a better offer from the other negotiator is called
A. Building block technique
B. Broken record
C. Re" escalation of demand
D. Onus transfer

8• Purchasing has been defu{ed as the buying of the five right rights and these are;
A. Quality, Goods, Price, Time and Place
B. Quality, Quantity, Contract, Time and Place
C. Quality, Quantity, Price, Source and Place
D. Quality, Quantity, Price, Time and Place

9. Which of the following is a collaborative negotiation tactic?

A. Good guy/bad guy
B. Russian front
C. Log rolling
D. Flfoching the price

10. Setting a negotiation range means;

A. [Link] the entrv [Link] exit nnintc: of the [Link]
._, " .l ._,

B. Detennining the duration of the negotiation

C. Determining an alternative to a negotiated agreement
D. Determining the best case scenario of the negotiator

11. The following ar.e items needed on a day to day basis while running a business.
A. Maintenance Repair And Operation Materials
B. Supplementary Materials
C. Raw Materials
D. Components And Sub-Ass~mblies

12. The following are purchasing elements except;

A. Clients and suppliers
 I ,. ,0 IA _

None of the above

Which
A. of the following purchasing rights is usually compromised for low prices?
Time
B. Quantity
C. Quality
D. Source
E. Delivery place

28
_Proce._ssing of [Link]
· invoices
· · 1s · done at •· · · · · · ... · "· ··· stage
A. Ordering
B. Monitoring
· C. Contracting
D. Selection
· E. Semcmg
I • • •

29. Maintaimng
. Pureh asmg• infrastructure is ;
· A. A tactical task
B. A strategic task
C. An operational task
0 . All the above

30. Purchas~g is associ~ted with;

A. Internal Invoice
B. External Invoice
C. Outgoing Invoice
D. Incoming Invoice-
E. AU the Above
 SECTIONB
Indicate whe~he,r TRUE or FALSE (Use the Template)

Answer \ ..
No. Questions ,.

31. Purc};lasing will tend to be_centralised where items

needed by each department are highly homogenous

32. About 20% of your effort should go towards

preparation and 80% of yoU3: effort towards actual
negotiation

33. Adequacy in purchasing best explains Right

quality

34. A mobile phone battery is an example of a

component
35. The centralized purchasing model can be used as a
cost cutting strateID' in buying entities.

36. Deadlocked negotiation occurs where parties see.

prospects of further movement

37. Leverage items are high profit impact and low

supply risk purchases

38 1n a horizontal structure, the buying sections share

support service&.

39. Purchasing methods describe which actions have to

be done and by whom.

40. Negotiation in purchasing is part of selection

41. Lubricating oil used in the production process is a

maintenance, repair and operations ([Link])
material.

42. Contract management is a task that falls under th~

tactical tasks

43. In a vertical structure, support services report

directly to the Chief Purchasing Officer

44. Monitoring and inspecting deliveries is a tactical

I
45. tn a vertical structure, support staff have more I
 I. I I I
to become bu ers.

The centralized model of purchasing promotes

[Link] . .

47. With roactlve- urchasin , information is ower

48. The major distinction between Procurement and

Purchasing is that purchasing is a transactional
as ect of rocurement.

49. Where two a,cceptable negotiation ranges overlap

there is scope for negotiation.

50. Indirect purchases are also known as primary

purchases while direct purchases are known as
secondary purchases,
 [Link]\...t!.,!U.M [Link] Vjj;RSITY BU
~{}W,E WORK"DBST ONE FOR SINEss SCHOOL . .
,_._, ,,- :<-.· BACHE~Df.'C0:MMJi:C~~ GREE OFBACHELOROF ).c-~ /, _. .
~ fP._i~9F., B~~S~~STRATioJf~:~0:;~4)OF MAKERERE ~ .
.

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EM¥ijI·Ci\MYEAR-E
tt UNIVERSITY
· ·
PRINCIPLES OF PURCHASING AND LY MANAGEMENT k
wg n .JK
D.,. . . 2017-2018
~t'f!JDY (BCOM & BBA) / (""
.[ SUNDAY 4TH MARCH 2018 J f1 6-1, (
,A;.~: . \'I · . 11;00 AM - 12:00 Noon DURATION:· HOUR
J:NS1i\UCTIONS
. ...
.
• c_ ~empt all Questions .
':; f-~- frl:l Answers should be written in the ANSWER TABLE Provided below
,.:· . .Oi?h' the page containing the answer table shall be handed in for marking
\ answer shall be written once without crossing to be considered as the correct
·:-•··answer

. .
.• 1. · Aprogr~e of requirement is a deliv3rable of;
a) Ordering · · .
b) Contracting
c) Specification
d) Selection

2. At what stage of purchasing are the _evaluation criteria very critical?

a) Contracting ..
b) Specification
c) Selection
d) Servicing
3. Which of the following stakeholders are ~ot- critical in the contracting exercise?
a) Legal department.· ·
b) AccoUllts receivable
c) Accounts payable
dJ User department
4. Which of the following purchasing rights is usually [Link] for low prices?
a) Time ·
b) Quality
. c) Sou:rce
d) ·Delivery place

Page 1 of 7
2 [Link] which purchasing model is the purchase ofhomogeneityit~m-~ercised? -· . '- · _.
a) Centralized , , " ' • · . · , ·, · ·
b) Decentralized
c) Coordinated
d) None of the above
. : .

[Link] of the following is a-strategic task of purchasing?

a) Contract management
b) Specifying ·
c) category management
d) Supplier rating
. .
22. The following are the three sectors of the economy except
a) Service, primary and tertiary ·
b) Primary, secondary and transport sector
c) Primary, secondary and service sector
d) Tertiary, fishing and mining sector
. '
23. The following negotiation strategies, th~ suppliers' interest is to keep the happy at !

. all expenses.
a) Aggressive strategy
b) Accommodative strategy
c) Collaborative strategy ·
d) Integrative strategy

24. The corporate purchasing department is found in the:

a) Centralized purchasing model
b) Coordinated purchasing model
c) Decentralized purchasing model
d) Corporate pu~ch~ing model ·

25. Primary inventory includes the following except:

a) Coffee in the coffee factory /.
b) Nails and fasteners at a carpentry workshop ,
c) Frames·of doors and window·at a metal-workshop
d) Lubricating and cooling water in a milling factory

26. Which of the following is an example of specification by functionality for a I

: .
computer;
a) Standard of the product in the m~ket
b) Processing speed ·
c) Brand category
d) Providing supplier samples

Page 4 of 7 l
i.
,'::
.,,
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f I
, 1,. I , I

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'27: ..................was a stage in th · . ·
..; _ righ~ of purchasing. e purchasmg evolution that only focused on the five
~a)...-~Relational stage
. .-. P~ Batch purchasing stage
_- •. :_e) Performance stage·
_ : • .d) Product stage

. - • 2 8, In situations of scarcity d . . . .
·.. ·:. \to, practice,. an uncertamtym the market,.orgamzations are advising
, . . a) Emergency purchasing
·. _?) Reactive purchasing
·. · _c}. RouID1:e purchasing
.. -1) Proactive purchasing

_. 2 9, The following are elements of the purchasing process except

a) Personel and organization
b) Clients and suppliers
c) Methoc.s and procedures
d) Standai:ds and practices

36. The following [Link] in the purchasing process except;

a) Sending requisitions
b) Negotiation ·
· c) Contracting management and monitoring
d) After sales service

31. Which one of the following· with the evolution of purchasing focused on the
. acquisition of the 5rights? ·
a) Product centered purchasing
b) Relational centered purchasing
c) Process centered purchasing
d) Performance cent~red purchasing

[Link] which stage of negotiations are parties involved in differentiating facts from
assumptions?
a). Specification negotiation stage
b) Post negotiation stage
c) Market negc+iation stage
d) Pre-negotiation

33, The acquisition of goods and services, "purchasing" can only be effected through;
a) Leasing
b) Outright purchase
·cJ Hite purchase
d) All of these

Page S of 7
 (' . .

34· ............................ is where items bough\ can be traced \n the final product of an
organization
a) ·Private procurement
b} Secondary purchases ·
c) Direct purchases
d) Lubricating oil purchases
35. Whicb. of the following purchasing document notifies the buying organization that
goods have been dispatched?
a) Requests for Quotations
b) Goods received note
c} Purchase order
d) Advice note
SECTION B (10 Marks) ·

••
36 Total quality management and supplier development axe best examples .

element i-:i urcbasin

in anizations
d custo com an the same in
edgement and: advice note are internal documents in the
cess
in specification is the sail).e as specification by brand
ier in the market

45 Invoice verification is the final step in the procurement cycle

End of question paper

Pzige 6 of7
 -~!0 ;, _- -~~\ .
. .; MAKERERE UNIVERSITY BUSINESS SCHOOL
.. COURSE WORK TEST ONE FOR THE DEGREE OF
.. . . . l3ACHELOR OF BUSINESS ADMINISTRATION (PPSM "204)A@
· BACHELOR OF COMMERCE <PPSM 2204) .
OF MAKERERE UNIVERSITY
DUJ1SE NAME ACADEMIC [Link] 2016/2017
.
PRINCIPLES OF PURCHASING & SUPPLY CHAIN
MANAGEMENT .
!-\T-E · .- . th
~MESTER, 12 MARCH 2017 TIM:E: 11.00am - 12.00 pm
TWO
rSTRUCTIONS
• [Link]-empt all Questions
• _:All•Anrwers should be written in the ANSWER TABLE Provided
11
:· · Only the page containing the answer table shall be banded in for marking

· • , An answer shall be written once without crossing to be considered as the correct

·. answer · · ·· ·
• Read and follow the '[Link] !:>efor e(ery section
0
>R QUESTIONS i -30 PLEASE CHOOSE THE MOST CORRECT ANSWER QO MARKS)
'At what stage in the purchasing process is the d~Jivery tim<; highly emphasized;
A,. Contracting B. Specification · · •. 'C. 'Ordering
·D. ¥onitoririg E. ·Servicing } ·

Which ofthe following are not supplies to an organization? . .,: .'

. Raw materials _. B. Finished goods C. Work in progress items .·
1ecurity s~rvices . E. Consumables . ::,
. . -}o
agement of reverse logistics in the supply chain starts from . ': .'
.Jps~eam ~µppJyJi~-~-. :-.,: : .)f; pm1/.1!.Sf!,~ _s1:1pp!y side C. Intrasite supp_Iy.side . _..,. ;ff\-,-t"::.~: : ·:··./_., .: .
!nter supplY, .side.: . · · · · .· . -..Sxternlil ~upply_s1de . . .• . :.-'·.. . .. :. : . . .. . .
·..: ...··::...- ./··: ,_./:f~~P~J~t'::-:~.:.:.: . 'A f/:;;t·:_\.f-/ .. :: ..·, :_.·. . ., . · , · ·:-: ..- .:·...·::.:.- -:, >~:'.':.:~~-.-~.\.;t/\,~_:.:.:- : ·_,.:-_. :=_::::,:
J\G~ y_ities peitbfui~c:Kwl:ili~n:'thi iipply' chain-are also referred-to as; . . .
. . .. . .. . ·: ,• ·:: .' . . . . . : .. :, '.
1i\~upplr chain pi:ocesse~ B. _Supply ch~ ena~lers C. ~~~?.[Link]~ suc.~ess
·· · factors: . ·. · .·. D. Supply cham p~rform.~ce E. [Link] elements · .
;·, . ·. . ··." ' . . · . ':\ :·: .
· . . ·. ·.· ·. \··~-- :
W)tlch of the·fo11o~g-cannot be realized;..yh~n dealmg with new supp};i~r. the suppl)'.
chain? .. ··· · · .· ; : ... . ·. · ·-' :. ·
A.' Infoin1ation slµuing -· · .· B. Resqur~'sharing c..[Link] trust I .

D_. Right p~ice . . . . .E. Fair [Link] terms

. . . . .' ..
!be maj~~ exped~tion. at'_the specification stage~ tq up•\~ith;. ·. . .
L Descriptfon of requirements .' B. Conformance c;f requirements · C. Attributes of
requiremen4! . .· D.._Prbgramme'. ofr~uke~e~ts . '• . E. Outcome,_ofreqilirenients
. . ' .. : . ,,. ' \ :. . .
Vhich
.
of the {[Link]~ not be pajt .of the ~ontrac~g team of a purchasing entity?.
. . ' .. . . ·, ., . ; '.
: .. '.
. . ·'• ;·
..·.: · Page1ofs
 .. ' .. \ ', :_

. I. :..· ... _'., '{'''

A. User department B. Legal department
c: Asccotinit~ recci;vabl~. ·-. · '·'
D. Accounts payabl~ E. All the above 4 ' \

. \

~. Which of the following is the immediate effect of purch.;,ing inadeci uate ms~~al? , • · • · ., .- . · \
A. Idle time . B. Stock out C. Customer dissatisfaction ···
D. Conflicts in the o~ganization E. Impulse buying . , •.. ·.·
· .
.'. .
9. At ':7"hat stage in the purchasing process are most contractual performance challenges
resolved?
A. Servicing B. Contracting C. Monitoring
D. Selection E. Specification ... ' •, I ,
'

10. Transac-tional relationships are likely to be deployed by the purchasing organization when
. buying; · ' .'
A. Leverage items B. Routine items C. Bottle neck items
D. Strategic items E. Critical items

· 11. Bulk buying _is more beneficial when acquiring

A. Leverage items · B. Routine items C. Bottle neck items
D. Strategic items E. None of the above

12. The following is quantitative purchasing information except;

A_. amount spent B. number of supplier C. number of invoices
D, order cycle time . E. client satisfaction '

13. The docu..rnent sent to a buyer infonning him that the goods have been dispatched by the
supplier is called. ·
A. .Purchaser orde~· B. Advice note C. Delivery note (
B. Quotatio·n
I

D. [Link] 'i
. . \
14. Which of the foilowing doc~en~ i~ ~aise~ ~.y-qser department in the purchasing . ··.· ; :..: .

organization?.' • · · · · ·· : :,°.':.' •..: · -:·,. : · ··.::· :' ·· · · : · · ·

A. Purchaser order . .' ··.-:· ·:.: _,;:·.B•:[Link];_ ·< ·:~,..-:_ e, [Link] . ,,. ··:: .· ·.. :":'._-:_·· _.:_~·.; :'.· f:·..{\f~--
...
D. Req~isitipn.'ti6te·."·.. _:'.·:~--.. t:-':_'... . . j3;'q~otiiti9n"/: -:<'".:,·: : ..:: ...... .
1
:'
• • ..... • •• •

15. Which of the following is the·odd man out?

· A. Purchaser order l · B·: Advice note C. Deiivery no~e
D. Invoice · . · ' · · .· ·..' E;'Quo~
. .
.:.tion.
•.

· 16. Which of the following is a ~ajar contributor to the de~elopment of ?olla'[Link] ·

relationships? · · - · · ' · · · . · · · · · ·· ·· . · •. · ·· ·
A. Prompt payment .· . :a.:·Two ·[Link]. co~unic~tion C: [Link]
D. Jointproblein s6lving ·. . . E; S_haring of profits _ . ..
.
\\
17. Which of the folloyV1ng a·[Link] characteristic of alliance relaf~onship . '
.

A. [Link] · .· . .. B. Instituti~nal trust C.. Institutional allies

\
\.
\ _P.~ge 2 9fS,
 , I

·r· Jitu~?nal [Link]~hips • ,·E. None ?ft!ie ab~ve _

'/t of the following items ~e characterized b! high supply risk and low spend?
B. Bottle neck items C. Leverage items
-it ,. Routine items
strategic items B. Buffer items
19
· :'fu''th0 process of specification, if a finn wanted to buy a certain type of pens and they send
.· •. :Qlle type of the desired pen to the supplier and asked them to fciiver that type of pen we
-.. · 9oultl say th"? have specified. using;

· · · · E. Sketch diagram
A.· Dimensions B. Function C. Sample D. Brand name

2'Q. ,?motions are mostly used in negotiations when using;

-· · _.{\.. Broken record B. Empty [Link] C. Onus transfer · D. Re-escalation of
· ·: · demand E. All the above

1. Whic.a of the following best explains a high supply risk?

·: ·. A. High number of suppliers B. Low nwnber of suppliers C. Many substitutes
D. Complementary goods E. All the above
.
22. Which of the following is most appropriate method of reducing supply risk?
A. Multi sourcing B. International sourcing C. Negotiations
D. Dual sourcing E. None of the above.

23, Which of the following explains the category of supply term 'indirect supplies'?
A. Products used by a business which ate bought thro1..1gh a tiered supplier
B. Products used by a business which are riot specified by a buyer
C. Products used by a business that do not form. part of the end product
D. Products used by a business which are bought through a supply chain
E. Products that are delegated to the user department

24. Certainty in negotiation is concerned with; ·

A Parties understanding what they have agreed upon
B. Parties realizing a win-win out come ·
C. Ensuring that the objectives of the negotiating entities are realized
D. Minimizing conflict in the negotiation process
E. All the above

·2s:-.important?
Which one of the following phases of the negotiation process is considered to be the most
· ·
A. Post negotiation phase B. Meeting phase C. Preparation and planning
phase D. Implementing the deal E. None of the above
26. The following are the elements of the pttroh:!.'.;ing process EXCEPT
A. Clients and Suppliers B. Methods and Procedures C. · Personnel and
-~Organisation D. Information E. None of the above
WhiCh
27. the one of the following with the evolution of purchasing focused on the acquisition of
5 rights?

Page 3 of s
 -~

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.
., ~'
• --~-1tl"''·,
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. ' :-. ·•, ' ·_~., . ..-.. :._ .. ?.. :. .\ \

A._Prod?ct cent_ered purchasing B. Relational centered purc~lng' '·C. Prdcess ;,.,~\ci~,!·:·::: ·•...-~ 1 t
purchasing .D. Perfonnance centered purchasing E. Combination centereO purchasing: ; _,- : ,. 1 j
28. Which of the following is a direct purchase'; '
A. Capital goods B. Components C. Supplementary materials . ,-_
D. Consumables E. Investment goods · ..' ·
·• .,

29. An "alliance t _elationship" in supply chain management can best be described by this - · _
characteristic;
A. ~ti;titional trust B. Managing the relationship C. Communication
D. Jommg efforts E. Focus of the price
30. The period of stalemate in negotiation is also referred to as·
A. Success pe~od B. Deadlock period · C. 'Disagreement pedod
D. Recess penod E. 9onfusion period .

31. Indirect purchases are also known as primary purchases while \illect purchases are also
known as seco
32. BATNA is ,l/h t reach an a eement.
33. Procurement e ent
34. C 'tion to between the chains of those firms.
35. In ·ce, itis · r.i .
36. In ocurem
37. In Transactio . focus of the relationshl
38. A firms · rs
39. Pri .
-40. Ne as
41. A is a s ' ·on
42. Individual . are most lik chieve ne otiation tar ets than team ne [Link]
43. Materials i hain should flow downstream
44. Toe lubricating oil used in the production process ·of a manufacturing firm is a component

45. Increasing scarce negotiation resources so as to arrive a mutual agreement referred to

.
46. sector [Link] the · sector ·
47. with tho i · cation of an ..
48. is romotes oom etition
49.. . defective su
·so: In n is advisable for one to disc ose e1r .

End of question paper

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