Supply Chain Exam 1
Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for suppliers to follow.
T
Reverse auctions are often run via third party providers known as application service providers (ASP's). These ASPs often charge both buyers and sellers a fee for participating in these reverse auctions.
T
Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.
T
The Internet and ERP systems have made global teamwork both possible and necessary for companies trying to compete in today's global marketplace.
True
The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered *elements of operations*
True
Provide three problems retail consumers face, which can be blamed on an ineffective and/or inefficient supply chain. What in the supply chain could cause these problems to occur?
*Defective items* − problems related to suppliers, operations processes, manufacturing mistakes *Products out of stock* − problems with manufacturing, problems with transporting the item, items sent to the wrong distribution center, large amount of defects cause shortage of good product *Products arrive late* − problems with transporting the item, items backordered due to problems in manufacturing, long cycle times in manufacturing *Wrong items delivered* − problems at the distribution center, problems with the shipping company, mistakes made in processing of the order *Wrong quantities delivered* − order processed incorrectly, problems at the distribution center, mistakes made in receiving, mistakes made in packaging at the manufacturing facility.
Discuss the differences between supply chain partnerships of the past and those that have developed today.
-In the past, supply chain partnerships did not really exist. -Supply chains were seen as a series of independent organizations that were looked on, to perform their core competency for the sake of their downstream "partner." Firms in the past did not seek to share information. -Partnerships of today encourage sharing and collaboration from the design phase to the delivery phase.
The textbook indicates "effective supply chain management relies on high levels of trust; cooperation; collaboration; and honest, accurate communications." Briefly explain what this means and why it is true.
-The supply chain is made up of a number of functions. Among these are departments devoted to organizational/supply chain strategy, *purchasing, logistics, manufacturing,* and other operations related functions. These departments also need to interact with other traditional business functions like marketing, finance, accounting, and information systems. In modern business models all of these functions are rarely if ever performed by a single entity yet the multitude of organizations involved are all dependent on each other *to make the final end customer happy.* -As simple as it may sound, a supply chain is only as strong as its weakest link. Links in the supply chain weaken when supply chain partners either act on their own or provide incorrect information to their supply chain partners.
The ACME Cell Phone Company has developed a new series of phones that it plans to bring to the market in the next 18 months. Management is considering whether to produce the product in-house or to contract out the purchasing and manufacturing of their new cell phones. Provide FOUR conditions that would favor outsourcing and FOUR conditions that would favor making the cell phones in-house. Also, which internal parties and external parties must procurement consult with in order to make an informed decision?
-focus on core competencies,outsource have better expertise, better quality, cost advantages -
The TCO as defined in the textbook adds "all costs associated with the acquisition, use, and maintenance of a good or service." The TCO is then broken up into three major cost categories. List the three cost categories and provide two examples of each of the three types of costs.
-pre-transaction cost supplier certification, supplier training, finding a new supplier, cost of comparing suppliers, any kind of investigating cost -transaction cost purchase cost, delivery cost, packaging cost, order preparation -post transaction cost logistical costs of defective items, broken items, too many items, warranty costs, hurt reputation,
Provide two reasons to consider having a single supplier and two reasons you'd consider having multiple suppliers for a single component.
-reliability, It's easier to establish a good relationship with a single supplier. This is considered favorable in modern supply chains. -creates competition, less risk
procurment vs purchaseing
-sourcing -process of obtaining
Provide three reasons purchasing is such an important element of the supply chain/organization.
1. Purchasing is responsible for the uninterrupted flow of raw materials 2. Purchasing is responsible for the acquisition of materials at lowest total cost 3. Purchasing is responsible for improving the quality of finished goods through the purchase of high-quality components and/or raw materials.
Make Option f=15000 v=5 buy option f=1250 v=10
15000+5x=1250+10x solve.
The term Supply Chain Management and the field of study it represents today seems to have emerged in the:
1980s
3PL
3rd part logistics provider -consulting firm that sells services associated with their core competency so the client organization can both save money and increase effectiveness and efficiency in a certain part of their supply chain. -a middleman that performs the dirty work the client organization is not particularly good at. -provides: transportation services manufacturing services purchasing services packaging services
Under which conditions would you most likely utilize a centralized purchasing system?
A centralized purchasing system would be favored by a company that is looking to reduce safety stocks, increase control in purchasing, centralize decision making, avoid duplicate purchases, centrally manage supplier relationships, and maximize available quantity discounts
Under which conditions would you most likely utilize a decentralized purchasing system?
A decentralized purchasing system would be favored by a company that is looking to make quicker decisions, maintain stocks that are closer to their customers, and identify and respond to changing customer needs at the local level.
According to the textbook, collaborative relationships place a relatively lower importance rating on which of the following competitive priorities: a. Speed of Delivery b. Cost c. Product Quality d. Frequency of deliveries
B
An outsourcing program can result in all of the following positive outcomes, except: a. Reducing staffing levels b. Decreased need for supplier management c. Cost reduction d. Gains in manufacturing flexibility
B
Which of the following is NOT important in developing a successful strategic alliance? a. Developing performance metrics b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Investigating the capabilities and core competencies of the supplier d. Open lines of communication that both promote sharing and secure confidentiality
B
Which of the following was a popular way in the 1990's of developing radically new business processes in an effort to reduce waste and increase performance?
Business process reegnineering
Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers? a. Lower levels of quality from their suppliers b. Lower levels of service from their suppliers c. Deteriorating buyer-supplier relationships d. All of these
D
SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these
D
Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria? a. Allows firm to screen out poor performing suppliers in its present supplier base. b. Allows firm to screen out undesirable suppliers that they may be considering for future purchases. c. Allows firm and its suppliers to develop a better corporate relationship d. All of these
D
Which of the following is an illustration of a company that has vertically integrated? a. A computer manufacturer that acquires its computer components supplier b. A computer manufacturer that acquires warehouses to aid in its product distribution c. A computer components supplier that begins to assemble computers for sale to consumers d. All of these
D
Which of the following is important in developing successful relationships in a partnership? a. Commitment by top management b. Interpersonal relationships between employees of the companies c. Mutual/compatible needs that result in a win-win situation for the partners d. All of these
D
Provide a list of four ways companies can motivate their suppliers to improve.
Develop supplier recognition/awards programs Create supplier development programs Create an internal certification program Motivate suppliers to get a quality certification like ISO 9000 evaluation of performance metrics
Transportation management, customer relationship management, network design, and service response logistics are all important issues that are most closely related to:
Distribution (logistics)
distribution
Distribution Elements − the distribution elements of the supply chain are focused on delivering products to customers at the right time, quality, and volume.
While most public procurement is focused on goals similar to those of purchasing departments in the private sector, U.S. federal government purchases must comply with the:
Federal acquisition regulation
Which third party certification was adopted by the European Union in 1992 that has caused US suppliers wishing to stay competitive in European Union countries to get certified?
ISO 9000- Quality management (IS0 14000- environmental management)
purchasing
In the context of Supply Chain Management, the acts of obtaining raw materials, services, maintenance, repair and operating supplies for money can all be defined as purchasing.
Bullwhip effect
It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.
According to the textbook, which is typically utilized when companies are deciding whether or not to outsource
Make-or-buy analysis
Assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements are all important issues that are most closely related to:
Operations
According to the text, the FOUR important elements of the supply chain are:
Purchasing, operations, distribution, intergration
"Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base.
T
A comprehensive SRM strategy would likely include dedicated supplier managers, processes that would help in establishing standardized best practices, and the utilization of tools that would help gather and evaluate results.
T
Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.
T
Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.
T
Continuous improvement and change management are both keys to building successful partnerships
T
ISO 14000 is a series of international standards for environmental management.
T
In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs.
T
Manufacturers typically have very little influence over second and third tier suppliers when compared to the influence they hold over first tier suppliers.
T
Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements, additional purchasing contracts, or contract extensions on existing contracts.
T
While most companies pursuing a sustainable purchasing program are focusing on paper, retailers like Corporate Express and Staples say they are seeing an increased demand for sustainable products across the board.
T
Paperless transactions are now possible through e-procurement and Web-based services, these would all be considered sustainable business practices.
T sustainable- is it helping people, planet, profit
According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components.
T (profit leverage effect)
Total cost of ownership
TCO is a performance metric system designed to isolate the total cost of purchases, which can include costs that are incurred before, during and after a transaction. This then allows companies to identify inefficiencies.
integration
The integration elements involve the planning and coordination required to create a seamless supply chain.
operations
The operations elements of the supply chain take into account the assembly or processing of materials and components into finished products or services.
Successful modern supply chain management typically includes the practice of:
The sharing of information between supply chain partners
According to the textbook, the end-product manufacturer is considered the focal firm in modern supply chains.
True
According to the textbook, the keys to successful supply chain management include trust and honest, accurate communications between supply chain partners.
True
Future trends in supply chain management include increasing supply chain responsiveness and considering the negative environmental impacts of supply chains.
True
Successful supply chain integration in a retail industry occurs when supply chain participants realize that the needs and desires of the *end item retail consumer* dictate the objectives and policies of all the other supply chain participants
True
Which of the following statements is FALSE? a. More than 50% of each sales dollar typically goes towards covering supply chain costs b. Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents c. Electronic procurement systems can aid a company in saving both time and money d. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing.
b
Benefits derived from implementing e-procurement systems include all of the following EXCEPT: a. Allows buyers to submit bids and suppliers to respond to those bids in real time b. Increases the accuracy in communication between buyers and suppliers c. Creates numerous additional job opportunities in the purchasing department d. Tracking bids and transactions is easier and faster
c
While Inventory turnovers can be calculated a number of different ways, a common way to calculate inventory turnovers is by dividing the cost of goods sold by the average inventory at cost.
cogs/inventory
early supplier involvement
cost reduction increase in quality decrease in new product development time establishes a level of trust and cooperation
As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through:
early supplier involvment
According to the EcoMarkets survey, which surveys over 6000 private and public buyers, the most popular aspect of green sourcing is:
energy conservation
weighted-evaluation criteria
given the weight as percents. Scores of each category. multiply the score by the weighted percent in the corresponding category. add them all up to get your score out of 100
supplier continuous quality improvement(SCQI)
intel
Which of the following is a reason that single sourcing is considered risky/bad?
limited capacity of one supplier
crown of excellence supplier recognition program
motorola
Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as:
post transaction costs
Costs associated with supplier certification, investigating alternative suppliers, and investigating alternative delivery options can all be classified as:
pre-transaction costs
Which of the following documents is considered the buyer's offer to purchase products or services from a supplier, is legally binding once the supplier accepts it, and usually has the terms and conditions of purchase preprinted on the back of the document?
purchase order
ISO 9000 ISO 14000
quality management enviornment management
According to the textbook, Proctor and Gamble is developing capabilities in three areas to create value for retail customers and also drive growth for their company's businesses. These capabilities include:
reliable services, agile demand driven supply, affordable differentiatoin
The inventory level where suppliers replenish their customer's inventory with a predetermined order quantity is called the:
reorder point
An auction where a number of suppliers try to underbid their competition in hopes of gaining a buyer's contract
reverse auction
The management of the firm's external resources through identification and selection of suppliers, management of supplier relationships, and monitoring and rewarding supplier performance in an effort to support the long-term goals of the organization is called:
strategic sourcing
On occasion, firms assist suppliers, new or old, to improve their processing capabilities, product or service quality, delivery effectiveness, and cost performance by providing the required technical and financial assistance. This is referred to as:
supplier development
SRM
supplier relationship management
According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during manufacturing.
t
NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.
t
The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as TCO, which stands for
total cost of ownership
TQM,JIT,MRP,MRPII,ERP,MRO,TCO,3PL
total quality management Just in time Maerials requirements planning manufacturing resource planning enterprise resource plannign maintenance repair operations total cost of ownerhship third party logistics
Strategic partnerships are seen as one of the foundations of supply chain management
true