SCM406 KC2 + 3

A supplier survey tool should be: As comprehensive and objective as possible All of these options are correct Include performance categories important to managing your supply item Simple to understand

All of these options are correct

Given the current circumstances of Coronavirus, we are in a _____________for airline tickets. Not enough information provided Buyer's Market Supplier's Market

Buyer's Market

Suppose a supplier is an excellent supplier with no nonperformance costs, then this supplier's SPI on a cost-based measurement tool would be: 1.0 Not enough information is available 0.0

1.0

All things considered, how many units should you buy in order to take advantage of a quantity discount? 5 2 1

2

A buyer placed an initial order with a supplier named Ronco that makes brake assemblies. The order was for 100 pieces at a per-unit price of $281. The buyer collected the following costs from Ronco: Direct Material Costs $100/unit Direct Labor Costs $50/unit (5 hours/unit at $10/hour labor rate) Overhead Costs $75/unit (calculated at 150% of direct labor) Total Costs of Goods Sold $225/unit Seller's Profit (25% of total) $56 cost markup Total price per unit = $281 At 200 units, what should the buyer expect to pay for these units when factoring in a 20% productivity improvement (learning rate)? $225/unit $250/unit Not enough information available $268.75/unit

$250/unit

Net adjusted price of an item = $32.35 after the buyer tracked many delivery misses last month. The costs imposed on the company for missed deliveries were $5000 on $50,000 worth of purchases. This supply item typically costs (quoted price): $30.50/unit $29.41/unit $10.00/unit

$29.41/unit

The Applebee's buyer heard through others that Rubio Enterprises, a maker of restaurant supplies, recently invested $1.2 million in plant, property, and equipment. The investors for Rubio want an 18% return on their investment. Applebee's plans to buy 10,000 new electronic menus from Rubio and received a quotation of $500/unit. In order to make sure Rubio's returns 18% to their investors, Rubio's better make sure their overall costs do not exceed: $478.4 $216,000 $300 $500

$478.4

Zach, a recent Penn State grad, was back on campus to discuss the challenges he faced as a buyer for Kellogg's Corn Flakes during the 2012-2014 period. The year 2012 was significant for a tremendous drought season. Grain prices skyrocketed as crop yields diminished. Then, during 2013-2014, farmers rebounded and just the opposite happened. Prices for corn and grains plummeted as the harvest was excellent. The PPI table above reflects this price volatility (fluctuations) as year over year PPI was ________% for grains. -13.4% 181.4 2.5% -32.3%

-32.3%

A buyer placed an initial order with a supplier named Ronco that makes brake assemblies. The order was for 100 pieces at a per-unit price of $281. The buyer collected the following costs from Ronco: Direct Material Costs $100/unit Direct Labor Costs $50/unit (5 hours/unit at $10/hour labor rate) Overhead Costs $75/unit (calculated at 150% of direct labor) Total Costs of Goods Sold $225/unit Seller's Profit (25% of total) $56 cost markup Total price per unit = $281 Calculate how many labor hours will be required for volumes of 100 and 200 units respectively assuming a learning curve of 80%. 60 and 80 labor hours 50 and 100 labor hours 500 and 800 labor hours 500 and 1000 labor hours

500 and 800 labor hours

Refer to Halloran Metals' Financials. What is Halloran's Cash-to-cash cycle time for 2001? 52.9 days Not enough information available 82 days 77.2 days

52.9 days

One of Halloran's competitors in this industry, Acme Metalforming, operates as a custom fabrication shop. In other words, it is Make to Order instead of Make to Stock. Acme holds all its inventory in "raw material" form and nothing in finished goods. Its inventory turns are 42! How many days of supply do they carry? 8.69 days Not enough information is available 86.5 days

8.69 days

A Price Analysis is a good analysis for? A unique supply item Engineered to order supply item A Commodity-type component

A Commodity-type component

Zach, a recent Penn State grad, was back on campus to discuss the challenges he faced as a buyer for Kellogg's Corn Flakes during the 2012-2014 period. The year 2012 was significant for a tremendous drought season. Grain prices skyrocketed as crop yields diminished. Then, during 2013-2014, farmers rebounded and just the opposite happened. Prices for corn and grains plummeted as the harvest was excellent. Zach was buying grains for $6.89/bushel in February 2013. By February 2014, he was buying at $4.50/bushel. Was Zach buying better, worse, or "on par" in comparison to marketplace prices? Worse Better On Par (Equal to)

Better

Rationalization and optimization of your supply base can result in Both Answers are Correct Lower order transaction costs because you have less suppliers to manage Suppliers who perform well according to your performance metrics

Both Answers are Correct

The number of days it takes for a customer to pay you is called: Days payables outstanding Cash to cash cycle time Days Sales Outstanding

Days Sales Outstanding

"Best in class" firms will bring their strategic suppliers into a new product launch only when the product is ready to launch in order to prevent any news from coming out True False

FALSE

When considering the cost of quality, Apple Computer's warranty program for certain laptop parts is to just replace the laptop completely rather than doing any diagnostics on the laptop and/or repair. Apple did a study on the costs of ____________ for these laptops and determined that this was the least expensive approach for Apple. Failure Appraisal Prevention

Failure

Cash-to-Cash cycle time is equal to DIO + DPO - DSO False True

False

Days sales outstanding should be as close to zero as possible True False

False

All things considered, which firm has the best current ratio: Firm A with a current ratio of 2.1 Firm C with a current ratio of 1.0 Firm B with a current ratio less than zero

Firm A with a current ratio of 2.1

Under what conditions can we use learning curves to estimate prices? In other words, when does the learning curve apply? For raw material purchases like grains, plastic resins, aluminum For custom-configured items requiring lots of labor and where you anticipate a significant increase in production over time For items that are manufactured on high-speed, highly automated production lines When there are new people starting in the procurement organization and they have to go through a learning curve to learn their jobs.

For custom-configured items requiring lots of labor and where you anticipate a significant increase in production over time

Refer to Halloran Metals' Financials. When calculating the quick ratio for 2001 and comparing this to the standard hurdle rate, what can be said about Halloran Metals' cash flow? Halloran Metals is in a strong cash position Halloran Metals may have cash flow problems It's impossible to tell anything about Halloran Metals

Halloran Metals may have cash flow problems

Refer to Halloran Metals' Financials. In this industry, typically raw material suppliers for Halloran like to be paid in 30 days. In fact, the payment terms are "2% discount in 10 days, net 30". In other words, the suppliers will offer a discount if paid early. Otherwise, pay in 30 days. What can be said for 2001? Halloran is paying its suppliers on time Halloran is taking advantage of the 2% discount Halloran is taking over 47 days longer to pay its supply base

Halloran is taking over 47 days longer to pay its supply base

Refer to Halloran Metals' Financials. The credit policy with customers is stated as "please make payments within 30 days". When compared to Halloran's DSO (Days Sales Outstanding) for 2001, what can be said? On average, customers are not paying on time It is difficult to tell what's happening On average, customers are paying promptly.

On average, customers are not paying on time

A benchmark index representing the average change in selling prices over time received by domestic producers is called: Producers Price Index Margin Rate of Return Index Value Cost Markup

Producers Price Index

Net Profit margin for a firm is equal to: Profit after taxes/Sales Profit after taxes/Total Assets Profit after taxes/Equity

Profit after taxes/Sales

Refer to Halloran Metals' Financials. How is Halloran doing from a profitability standpoint year over year? Profitability is deteriorating year over year Profitability is improving year over year Difficult to tell what is happening

Profitability is deteriorating year over year

Which of the following is one of the key criteria for evaluating a supplier: Sustainability Quality Capacity at a plant

Quality

Supply Base Rationalization usually results in the ________ number of suppliers to manage. Rationalized Limited Right Threshold

Right

Economic Conditions are favorable to the buyer when: Demand much greater than suppliers are able to produce There are excess inventories or production capacities at supplier level When the buyer's choices are limited and there are out-of-stocks everywhere

There are excess inventories or production capacities at supplier level

A firm with a high current debt to equity ratio may have issues paying its bills: True False

True

An advantage of a single source situation is the ability to form strong partnerships with that supplier. True False

True

Cross-sourcing offers a way to reduce supply base risk. True False

True

It is possible to have a negative cash-to-cash cycle time (Hint: Michael Dell made this famous and called it "The Dell Model". I encourage to research this and think of "how" Michael Dell did this.) False True

True

Net adjusted price of an item = purchased price if the supplier had perfect performance (non-performance costs = 0) True False

True

Producer Price Index (PPI) is a good benchmark. You can compare the price you are receiving from your supplier to the latest PPI to see if you are buying better or worse than marketplace. True False

True

Ford Motor Company recently announced that it will be moving production operations for vehicles currently made in a factory in Ohio to one of its factories in Monterray, Mexico. Ford will take advantage of cheaper labor rates in Mexico vs. USA for assembly of these vehicles and then ship them back into the USA for sale. This is an example of: outsourcing offshoring arrangement sole sourcing arrangement outsourcing insourcing arrangement insourcing offshoring arrangement

insourcing offshoring arrangement