MGMT 3300 Final Exam

a Bill of Lading is:

a key document in the movement of goods. it contains information about the products being shipping including weight and quantity

supply chain:

a network of companies that work together to provide a good or service for the end-us (consumer or business)

supply chain management

a systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer

a fair price:

is an amount arrived at through negotiations where the seller's price is a starting point

the zone of negotiation

is perceived in exactly the same way by buyer and seller in a negotiation

business unit (corporate strategic planning)

mold the plans of a particular business unit, as necessary, to contribute to the corporate strategy

the Sherman Antitrust states that suppliers:

not talk with competitors about price

hedging:

offsets transactions to protect against price and exchange risks

all processes...

are a set of activities that have a beginning and an end, occurs in a specific sequence, and has inputs and outputs

__ should be designed first and __ last

processes; technology

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

Obvious risks of doing business globally

source location & evaluation lead time & delivery political, labor & security problems currency fluctuations - payment methods tariffs & duties legal issues language - communication cultural & social customs ethics & sustainability

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

decisions about how to assure on-time delivery are important due to:

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 US buyer may be discouraged from sourcing offshore if:

the political situation in the country of interest is questionable

a cash discount allows:

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

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

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

true

if a supplier offers a cash discount, the rule of thumb is the buyer always take the cash discount (unless the buyer has cash flow issues)

true

shipping term FOB stands for Free on Board and means the goods are delivered on 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 point

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

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

true

Why do business globally?

unavailability of items domestically price & total cost gov't pressures & trade regulations quality faster delivery & continuity of supply better technical service marketing tool tie-in with offshore subsidiaries competitive clout or leverage

cross-culturally:

understand the universal human values and rank order by region, country, geography and individual (ex monochronic - one thing at a time & polychronic cultures - many things at once)

most direct costs are:

variable costs

when selecting freight carriers, buyers are most concerned with:

ability to deliver on-time with no damage

total cost of ownership definition

acquisition price price all other associated costs often called in-house costs of pre- and post-transaction costs

strategy:

an action plan for how you will get to the goal or vision

freight forwarders

buy dedicated space on scheduled carriers

forward buying:

involves purchasing for known or estimated future requirements

the supply process is basically a:

communication process - determining what needs to be communicated, to whom, and in what format and time frame is at the heart of an efficient and effective supply management process

function (corporate strategic planning)

concern the how of each functional area's contribution to the business strategy and involve the allocation of internal resources

competitive advantage

contributing to the organizational strategy, by seeking opportunities to improve the organization's competitive positions

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

cost-plus-incentive-fee (CPIF)

potential hidden costs with global

currency exchange premiums commissions to customs brokers foreign taxes imposed import tariffs extra safety stock, inventory carrying costs & labor additional security measures

a third party logistics (3PL) services provider:

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

corporate (corporate strategic planning)

decisions and plans that answer the questions of What business are we in? & How will we allocate our resources among these businesses?

supply chain orientation

desire to leverage capabilities and resource advantages offered by outside partners

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

establish negotiation points and avoid setting unrealistic expectations

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)

supply managment

focused on the acquisition (sourcing/buying) process in the supply chain and organizational contexts

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

the market approach to pricing:

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