MGMT 3300 Final

Freight forwarders:

Buy dedicated space on scheduled carriers

Which of the following statements supports multiple sourcing?

Concerns exist about supplier capacity for future volume

When a team has decided that a task or function currently performed by company employees is not a core competency, the team will probably recommend:

Continuing to make

If the buyer wants to motivate the seller to manage total costs, the best type of contract is:

Cost-Plus-Incentive-Fee (CPIF)

The steps in the supply process are: 1. Recognition of need 2. Description of need 3. Identification and analysis of possible sources of supply 4. Supplier selection and determination of terms 5. Preparation and placement of purchase order 6. Follow-up and/or expediting the order 7. Receipt and inspection 8. Invoice clearing and payment 9. Maintenance of records and relationships

True

The world has grown a good deal smaller, figuratively, in the last 60 years, with the increased speed of transportation and communication.

True

Will your sourcing strategy need evaluated against current and projected socioeconomic conditions?

Yes because business cycles only last 5.5 years on average

When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

Decide if the negotiation makes sense, establish negotiation points and avoid setting unrealistic expectations

Best results from supplier visits come from:

Developing, in advance, a general outline of the kinds of information sought; gathering, in advance, all reasonably available information, both general and specific, about the company; and preparing a detailed report of the findings after the visit

What is a Purchase Requisition?

Document used to communicate needs internally between users/specifiers and supply management according to established internal controls

What is one way the Supply Organization can make a company more competitive?

Evolving information systems

Purchasing represents the exchange of money for goods and services. Often, a very large amount of money is involved in this exchange. It is, therefore, vital that the transactions associated with this process not be carried out at the highest ethical level.

False

Contract pricing is set and not subject to change. Buyers prefer this option, often used in short-range contracts.

Firm-Fixed-Price (FFP)

Total cost of ownership (TCO) can be used to:

Highlight cost reduction opportunities, compare suppliers in a supplier selection decision, prepare for a negotiation and assess the reasonableness of a supplier's prices

Definition of Supply is the exchange of money (the buyer's responsibility) for goods and services (the supplier's responsibility)

True

If a suppler offers a cash discount (for example 1/15, N/30), the rule of thumb is the buyer always takes the cash discount (unless the buyer has cash flow issues).

True

Insourcing and outsourcing occur when a company reverses previous make or buy decisions

True

Shipping term FOB (UCC definition) stands for Free on Board and means the goods are delivered to a specified point with all transportation charges paid

True

Shipping terms and the responsibility of the buyer and seller in international contracts are covered by INCOTERMS

True

The Robinson-Patman Act (Federal Anti-Price Discrimination Act of 1936) says that a supplier must sell the same item, in the same quantity, to all customers at the same price

True

The challenge in buyer-seller relationships is to find ways to foster the development of trust and mutual understanding of the goals and objectives of each other's organization while maintaining a professional relationship.

True

When sourcing offshore:

the buyer should learn about the culture, customs, norms, taboos, and history of the supplier's country.

A freight bill is:

the carrier's invoice for services provided

A cash discount allows

the seller to secure prompt payment, and the buyer to pay a lower price per unit.

Most direct costs are:

variable costs

Hedging:

Offsets transactions to protect against price and exchange risks

What are the steps of the SCOR model?

Plan, Source, Make, Deliver, Return

Factors to be considered when selecting mode of shipment, carrier, and routing include:

Reliability and service quality, the type of item being shipped and shipment size

If the buyer does not have a clear and unambiguous description or specification and wants to find out which suppliers can deliver the best value when and where needed, he or she will typically issue a:

Request for proposal (RFP)

Supply Management is focused on the acquisition process recognizing the __________ and __________ context

Supply Chain and Organizational

Competitive bidding, in general, is the most efficient means of obtaining a fair price for items bought.

True

The zone of negotiation:

indicates the feasibility of negotiation and the likelihood of an agreement.

In almost all manufacturing organizations, the supply area represents by far the largest single category of spend, ranging from ___ to ___ %

50-80%

What is the estimated average spend the Supply Management Organization (Procurement) is responsible for in most organizations?

50-80%

A Bill of Lading is:

A key document in the movement of goods. It contains information about the products being shipped including weight and quantity.

When selecting freight carriers, buyers are most concerned with:

Ability to deliver on-time with no damage

The market approach to pricing:

Implies that prices are set based on what the market will bear

What is one way the Supply Organization can contribute the Organizational Success?

Improve Customer Satisfaction

Information systems technology can:

Increase data accuracy and accessibility at lower costs

Corporate purchasing cards are issued to:

Internal customers to purchase low-dollar, high-volume goods and services

Forward Buying:

Involves purchasing for known or estimated future requirements

A third party logistics (3PL) services provider:

Is a separate company from the buyer's and supplier's organizations

Reverse marketing: (Page 339)

Is encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage fro supply chains

A fair price:

Is the lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit.

Distributors, wholesalers, and retailers:

May provide valuable services and a better price than the manufacturer

Outsourcing:

May reduce operating costs, improve focus on core competencies, and gain access to world-class capabilities

The Sherman Antitrust Act states that suppliers:

Not talk with competitors about price

Decisions about how to assure on-time delivery are important due to: (MOST IMPORTANT DELIVERY Q)

The large number of dollars involved in the movement of goods into and out of an organization and the potential effect on profits

Logistics is:

The management of inventory at rest and at motion

A U.S. buyer may be discouraged from sourcing offshore if:

The political situation in the country of interest is questionable

Which of the following statements supports single sourcing?

The use of just-in-time production, stockless buying, or systems contracting

An organization may decide to continue to produce a good or service in-house rather than outsource:

To control the quality of customer service and to reduce risk

The process of attempting to determine all cost elements such as acquisition price, purchasing administration, follow-up, expediting, inspection and testing, rework, scrap, downtime, lost sales and customer returns is called:

Total Cost of Ownership

A process is a set of activities that has a beginning and an end, occurs in a specific sequence and has inputs and outputs

True