MGT 375 CSU Durand Exam 2

Which decisions can the SUPPLY MANAGER help provide insight?

(Not part but: Supply managers typically help manage relationships with suppliers.) 1. Negotiation of contract terms. 2.What products or services should be outsourced. 3.Which supplier should be selected.

Declining logistics costs are due: (1* big one) & (3 smaller)

*1. companies are Operating more Efficiently 2. deregulation in the transportation sector 3. technology advances 4. improvements in supply chain processes and practices.

between 100% insourcing and 100% outsourcing

- Gray Zone

reasons that a company may choose to make over buy?

-To have MORE CONTROL OVER QUALITY of the material/product than a supplier. -NO EXISTING SUPPLIER in the market and not enough time to spend developing one before the product is required. -The ability to produce the material or product at a LOWER COST and avoid paying a 3rd party's profit margin.

A subcontract performance summary is beneficial for

-information for SUBSEQUENT CLAIMS -information for RENEGOTIATIONS -evaluation fore FUTURE REFERENCE

When 1.(____) and where 2.(______) was QFD developed

1. 1960's 2. Japan

The purchase price of a capital purchase is between 1.(_______) percent of total cost of ownership.

1. 30-50%

During the need identification and specification phases, there is a, 1. (___________%) opportunity for value improvement.

1. 70%

Standardization (3)

1. Agreement on definite sizing. 2. Technical and engineering concept. 3. Agreement on quality.

advantage for using specification for product description (2)

1. An identical requirement exists from a different source of supply. 2. Careful attention has been paid to the need and the ways in which it may be satisfied.

Capital expenditures are shown as, 1.(_______), on the balance sheet.

1. Assets

Using or equal descriptions transfers responsibility for establishing equality to the 1.(________)

1. Bidder

The key document for shipments is the (1)

1. Bill of Landing

Ultimate responsibility for transportation charges with FB destination is the 1.(_______)

1. Buyer

Specification by material and method of manufacturing places the risk and responsibility on the 1.(___________) organization.

1. Buying

A process that is in a state of statistical control with only common cause variation is considered 1.(_______)

1. Capable (capable process)

Advantages (2) of using SPECIFICATION for description

1. Careful attention has been paid to the need and the ways in which it may be satisfied. 2. An identical requirement exists from a different source of supply.

The 1.(________________) refers to the time between purchasing the raw materials used to make a product and collecting the money from selling the product.

1. Cash Conversion Cycle

Demand for a service can be (3)

1. Continuous (24hrs, security, insurance, military) 2. Periodic (regular scheduled, cleaning services) 3. Discrete (one time use, painters)

A 1.(_______), means the different methods by which the buyer communicates to the seller a clear, detailed picture of the required item.

1. Description

Supply professionals can monitor performance with MRO acquisitions and (3)

1. Develop Contracts 2. Identify Needs 3. Select Suppliers (Also monitor performance)

Why is supply chain sustainability important to today's supply chain managers? (3)

1. Developing products that are safe for consumer use. 2. Developing products that use less scarce resources. 3. Global warming/climate change concerns.

Shorter contracts offer, 1.(_______), to switch suppliers while longer contracts offer 2.(__________), certainty.

1. Flexibility (flex to switch suppliers) 2. Price (Prices set for longer amt. of time)

The, 1(______), bill is the carrier's invoice for services provided.

1. Freight (Freight bill)

Transportation service provider categories are (3)

1. Freight Forwarders 2. Brokers 3. Custom House Brokers

Corporations who use standardization and simplifications can see achievements in? (2)

1. Improved Quality 2. Lower Costs

ABC manufacturing wants to understand their business needs better, to do this they must first know who 1.(_______), those needs.

1. Influences/Requires/demands/Drives

Value proposition describes how, 1.(_______) will improve customer success and allow the organization to do better.

1. Innovation

According to the six sigma philosophy, if you control the 1.(______), you will control the, 2.(_______), Correct Unavailable.

1. Inputs 2. Outputs

The value of materials purchased by market grade is subject to, 1.(________), to ascertain the degree of compliance.

1. Inspection

Services are, 1.(________) and 2.(____________)

1. Intangible 2. Non-Manufactured

Organization needs are based on (3)

1. Location of organization 2. Size of organization 3. Nature of the business (market the business is in)

Organizations must properly report all 1.(__________), 2.(__________), and 3.(_________) to withstand investigations and avoid penalties.

1. Long term contracts 2. Hedge Positions 3. Lease Obligations

Advantages of rail services (2)

1. Low variable Costs 2. Energy Efficiency

A company that NEEDS to PROTECT INTELLECTUAL PROPERTY, even with a confidentiality agreement, may choose to 1.(______________) over 2.(____________)

1. MAKE (over) 2. BUY

Commodity managers must be aware of, 1.(__________), conditions to ensure they meet supply and demand, price movements, and proper acquisition timing.

1. Market (Conditions)

Raw materials are basic substances in a 1.(______), 2.(_______), 3.(_________) state

1. Natural State 2. Semi-Processed State 3. Modified State

Service innovation comes from (3)

1. New Services 2. New Methods 3. New HOW the service is delivered

If a product is shipped FOB, the, 1.(__________) of the goods in transit is responsible to file a claim if necessary

1. Owner

What items have an impact on service deliveries? (2)

1. Place of the service delivery 2. Nature of the service delivery

Total quality management (TQM) requires (1)

1. Process Control

When the delivery of a service is provided at the, 1.(_______), premise, the contract should have provisions for security, dress code, hours, health and safety, etc.

1. Purchasers

Disadvantages (2) of using SPECIFICATION for description

1. Readily available items are of equal or better quality and meet all requirements. 2. The minimum requirements of the buying organization are the maximum furnished by the supplier.

limitations for using specification for product description. (2)

1. Readily available items are of equal or better quality and meet all requirements. 2. The minimum requirements of the buying organization are the maximum furnished by the supplier.

Simplification

1. Reduction in the number of designs. 2. A selective and commercial problem. 3. Preliminary to standard products.

Supply chain for most organizations can be classified into seven (7) categories of:

1. Resale 2. MRO 3. Services 4. Other 5. Components 6. Raw 7. Capital Assets

The two types of quality checks on tangible products is (2)

1. Sampling 2. 100% inspection

A 1.(______), sampling plan is where the sample is selected in stages, with the need for each subsequent stage being conditional on the results of the previous stage.

1. Sequential

offer advice, expertise, or information to help inexperienced buyers with transportation concerns. (1)

1. Shippers

Maintenance, repair, and operating supplies deal with many, 1.(_______), value purchases.

1. Small (small value purchases)

Sustainable supply chains require supply managers to take both, 1.(_______) and 2.(______) into consideration.

1. Social 2. Environmental

Process capabilities studies identify which (2) two types of variation?

1. Special/ Assignable causes 2. Common/ random causes

Every organization has specific needs, the value of these needs are categorized into three levels, they are

1. Strategic, 2. Traditional 3. Additional Current are the three levels to determine a needs value

A 1.(___________________), is used to complete work that has been bid out by prime contractors.

1. Subcontractor

Performance specification allows the 1.(________ )to take advantage of the latest technology to provide the most suitable product.

1. Supplier

Organizations should operate in such a manner they 1.(___________) government regulations instead of 2. (_____________)

1. Support (Gov. regulations) 2. Opposing

Which of the following are challenges or questions that must be addressed when an organization decides to insource?

1. The company must ensure a smooth transition to avoid production interruptions. 2. The company must focus on how they will discontinue relationships with current suppliers. 3. The company must be able to provide raw materials and parts for production.

reasons a company may choose to buy over make? (3 reasons)

1. The firm has strict on-time DELIVERY DEADLINES and requires a MULTI-SOURCING STRATEGY using an EXTERNAL SUPPLIER and INTERNAL SOURCE. 2. The firm wishes to TAKE ADVANTAGE of a SUPPLIER'S BRAND IMAGE. 3. The supplier can provide the benefit of ECONOMIES OF SCALE for components that ARE NON-VITAL to the organization's operations.

What are the (3) difficulties when acquiring services?

1. The inability to store for future use. 2. Ensuring the proper timing of delivery. 3. Ensuring adequate capacity.

Who is responsible for adjustments and returns (1)

1. The supply department

items are considered strategic if (3)

1. They increase cash flow 2. They increase the reputation of the organization 3. They allow access to new markets

1.(________) consultants were previously hired to help recover overpayment to carriers.

1. Traffic (Traffic consultants worked to uncover instances of overpayment to the carrier.)

What are the (2) two steps to the acquisition process when determining commercial equivalents?

1. Translate needs into terms suppliers can understand 2. determine what is needed and why

for local suppliers and buyers operating in a JIT system, the preferred method of delivery is (1)

1. Truck

Innovation allows suppliers and purchasers to work together continually to improve? (2)

1. Value 2. Total cost of Ownership

The three stages of sampling, inspection, and testing are (3)

1. before the purchase commitment has been made 2. During the commitment t the supplier 3. after a purchase commitment has been created

Standard specifications offer advantages of (3)

1. being readily available 2. being commonly recognized 3. being widely known

When acquiring goods or services, the purchaser must determine (1)

1. best buy circumstances

Which method of description is used when no other way is conceivable to request product procurement? (1)

1. by sample

Transportation consultants currently provide services for (3)

1. carrier selection. 2. liability. 3. rates and discounts.

Carriers are categorized as (4)

1. common 2. contract 3. exempt 4. private

Early supply and supplier involvement can ensure that products or services specified are procurable and represent, 1.(___________) value.

1. good (good value)

To determine the stability of a process the supplier must determine (2)

1. if the upper and lower capability limits meet customer requirements. 2. the natural capability of the process.

Reviewing corporate need under a financial examination allows supply managers to help: (2)

1. improve return on assets. 2. lift the company's financial ratings.

Small-shipment service competition has 1.(______) due to deregulation.

1. intensified

Deregulation of transportation services allows shippers the ability to negotiate (4)

1. rates 2. terms 3. services 4. routes

The three (3) primary reasons to outsource logistics are

1. reduced costs 2. improved services 3. increased focus on core activities

Engineering drawings are commonly submitted with a form of descriptive 1.(_________)

1. text (descriptive text)

Engineering drawings used for procurement have limitations of (2)

1. the cost to prepare drawings. 2. the cost to manufacture specialty items.

Greater, 1.(___________), is required for supply transactions to prevent financial scandals and avoid fines or citations.

1. transparency

The selection of the FOB point determines (4)

1. who is responsible for claims. 2. the title is passed to the buyer. 3. who routes the freight. 4. who pays the carrier.

The purchase price of a capital purchase is between _______ percent of total cost of ownership

30%-50%

What is an exempt carrier?

What they do: -Exempt from the interstate commerce act - BC THEY ARE EXEMPT^(operate without interference of government regulation as monopolization is not a major threat in these areas.) -Do not have regulation rates or services imposed. Def:(transport agency specializing in services (such as taxi service) or commodities (such as farm products or bulk cargo))

What is a private carrier?

What they do: -Only transport one organizations goods -CAN REFUSE SERVICE UNLIKE COMMON CARRIERS -They have full control Def:(private carrier is a company that transports only its own goods. The carrier's primary business is not transportation)

What is a common carrier?

What they do: -Transports goods or passengers -Has set-rates -CAN'T REFUSE SERVICE Def: (in common law countries is a person or company that transports goods or people for any person or company and is responsible for any possible loss of the goods during transport)

Reputation risk

adverse supplier behavior affect purchasing organizations

what to make or buy are strategic _________ decisions.

Operational

Clean bill of landing

State GOODS were loaded onto a vessel in good condition.

On-board bill of lading

States CARGO was loaded in good condition on the vessel

True or false: Supplies involvement has increased over the years in both inbound and outbound transportation.

True; (involvement of supply in both inbound and outbound transportation has increased.)

True or False; Supply management has become more difficult with additional criteria

True; (supply management is more difficult with additional criteria)

True or false: Unusual or infrequent purchases MUST be dealt with on a case by case basis.

True; (unusual or infrequent purchases must be dealt with case by case)

True or false: Special or assignable variation is related to machinery, material, or human performance.

True; Special or assignable variation is outside nonrandom problems and involves machinery, material, or human performance.

three (3) types of Procurement OUTSOURCING CONTRACTS are

procure-to-pay source-to-pay source-to-contract

subcontract cost, schedule, technical control, and configuration control are managed by the

subcontract administrator.

Core competency is...

the key to a business's success that competitors can't easily copy

A car manufacturer has_________, the installing of windows in all their models to a third party vendor.

outsourced

Cpk = CPK index formula=

{(Uppertolerancelimit−X)/(Processspread)} or {(X−Lowertolerancelimit)/(Processspread)}

organization needs to be categorized under the traditional value proposition are evaluated under the criteria of

(Traditional Criteria) 1. quality 2. quantity 3. delivery 4. price 5. service.

Pipelines Transport what types of materials (2)

1. Gas 2. Liquid

For shipping: Private Fleets are what type of decision (1)

1. Make or Buy Decision

Brokers

Arrange transportation with carriers for a fee

cons of insourcing

Decreases firm's strategic flexibility. Potential SUPPLIER MAY OFFER SUPERIOR PRODUCTS & SERVICES. High OVERHEAD COSTS.

method of description is confined to certain primary materials? (steel)

Description by market grade (steel)

The types of products or services to offer are strategic ___________ decisions

Entrepreneurial

what CIRCUMSTANCES can affect a previous make or buy decision?

Environmental, organizational, and market circumstances

True or false: Firms only need to make insourcing and outsourcing decisions during the initial setup phase.

FALSE (they always need to be making in and outsourcing decisions during every stage of the business)

True or false: Closure requirements for all subcontracts are universal.

FALSE; Each SUBCONTRACTOR CLOSURE REQUIREMENTS will VARY in complexity PERFORMANCE SUMMARY should be included.

Pros of insourcing

High control over QUALITY. Ability to OVERSEE ENTIRE PROCESS. Focus on CORE COMPETENCIES.

Operational Risk

Interruption of goods or services.

Short-form bill of lading

Refers to the contract but does not include the contract details.

Financial Risk

Significant change in price of goods or services.

True or false: With every transportation decision there are advantages and disadvantages to take into consideration

True (Each form of transportation has its own distinct advantage and disadvantage.)

Custom House Broker

Used to import products

What is a contract carrier?

What they do: -carrying persons or property of certain customers only -CAN REFUSE SERVICE

Straight bill of lading

When good have been paid for in advance

Order bill of landing

When goods are purchased on credit.

Services make -up what % of the US GDP? (1)

1. 80% of GDP

The X(Bar, X^-) chart is used for charting the population 1.(_______) The R Chart is used for 2.(______)

1. Mean 2. Dispersion

What is the biggest cost for resales (1)

1. Price they pay for the goods they sell

How do you decide on delivery options for raw material delivery? (3)

1. What is the best value? 2. What supplier offers the best service? 3. What transportation mode is the most appropriate?

supply personnels (3) responsibility is to

1. alter the description as needed and provide alternatives. 2. verify the description and provide alternatives. 3. order as requested.

A challenge with MRO purchases is (1)

1. keeping acquisition costs low (MRO is a very diverse category that generally deals with SMALL VALUE PURCHASES so keeping acquisition costs low is a challenge.)

Cost, insurance, and freight (CIF) means the seller will (2)

1. provide insurance coverage 2. pay freight charges

The distribution channel between buyers and sellers is represented by (1)

1. resellers

Evaluation of suppliers requires a collection of data from the areas of (4)

1. technical/strategic. 2. overall relationship with the supplier. 3. management. 4. finance.

Service TRIAD

A buyer who contracts with a supplier to deliver services directly to the buyer's customer is viewed as a SERVICE TRIAD (Amazon Web Services)

How is using description by brand restrictive? (1)

Brand specific requirements can deprive the buyer of using other suppliers.

What can an organization use to ensure supplier comply with labor concerns and human rights issues?

Codes of conduct

what does an ABC/ Pareto analysis do

It analyzes what services will be the most impact to the business

the cost of purchasing the machinery, tooling, training, and employees is very costly. ABC automotive should________

PURCHASE PART from 3rd party vendor

Freight forwarders

Purchase dedicated space on scheduled carriers.

What is a reason a company may choose insourcing?

To keep CORE COMPETENCIES in-house.

FOB (Free On Board)(Shipping term)

the cost of delivering the goods to the nearest port is included but YOU, as the BUYER/OWNER, are RESPONSIBLE for the SHIPPING from there and all other fees associated with getting the goods to your country/address

supply professionals must

use experience and judgment to make sound decisions.

Supplier certification

a process of evaluating and recognizing the quality performance of an organization's suppliers in order to reduce or eliminate incoming inspection.