When There Is a Large Number of Common Requirements Across

question 8

Multiple Choice

When there is a large number of common requirements across facilities or business units,and the supply base is dispersed geographically,an appropriate global sourcing structure is:

• A)regional purchasing offices that manage the region's spend for every commodity.
• B)a global commodity management organization.
• C)a centralized international purchasing office equidistant from key suppliers.
• D)a centrally managed global sourcing office located in the corporate headquarters.
• E)a decentralized structure where purchasing managers are at each facility.

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Definitions:

Beta

A measure of the volatility, or systemic risk, of a security or a portfolio in comparison to the market as a whole; it indicates the tendency of a security's returns to respond to swings in the market.

CAPM (Capital Asset Pricing Model)

A model used to determine the expected return on an investment based on its level of risk, as well as the risk-free rate of return and the expected market return.

Risk Premium

The extra return expected by an investor for holding a risky asset compared to a risk-free asset, as compensation for the higher risk.

Diversifiable Risk

A type of risk that can be reduced or eliminated from a portfolio by holding a variety of investments.