2. The combination of creativity and energy expended in problem solving, system analysis, and revision of all facets of the materials functions to improve its contribution to corporate objectives and profit is:

A. Administration
B. Innovation
C. Operation
D. Delegation

3. The cost involved in changing over a machine to produce different components or items is referred to as:

A. Setup cost
B. Ordering cost
C. Transportation cost
D. Opportunity cost

4. Identify the method that attempts to examine the relationship between the demand for materials and another factor which influences the demand for materials:

A. Time series analysis
B. Naive forecast
C. Linear regression
D. Estimating average

5. Under which of the following terms does the legal title of the materials pass from the seller to the buyer when the buyer receives the materials at the seller's plant?

A. FOB seller's place
B. FOB buyer's place
C. FOB purchaser's place
D. CIF (Cost, Insurance, and Freight)

6. Which of the following types of purchasing anticipates a possible long-range need, usually over one year, to profit by purchasing at the current price?

A. Speculative purchasing
B. Forward purchasing
C. Requirement purchasing
D. Hand-to-mouth purchasing