BCOR 360 Topic 11

During which era did outsourcing make purchasing strategic? Clerical era Cost savings era Transactional era Strategic era

Strategic era

Which of the following statements is correct? You should use landed cost analysis for all purchase decisions TCO should be used on capital acquisitions Landed costs include TCO TCO includes landed costs

TCO includes landed costs

Fixed costs represent costs that will remain even after we stop a particular process or activity. TrueFalse

True

Multi-criteria analysis is a tool that helps you compare "distinctly different" options. TrueFalse

True

Purchasing savings can have a huge impact on the firm's profit leverage. TrueFalse

True

To calculate results you multiply the score for each criterion by the associated weight and add up the results. TrueFalse

True

You are only outsourcing if you could have / used to produce the good or service internally, and are now choosing to source from outside the company. TrueFalse

True

Leverage purchases: Are an example of the KISS principle High volume, high complexity You don't have to worry about a sudden price spike Your best opportunity to really save money and a buyer's dream

Your best opportunity to really save money and a buyer's dream

A bottleneck item (on the strategic sourcing matrix): Is usually a situation where the supplier has more power than the buyer Are also known as unique items Are usually relatively small areas of spending All of the above

All of the above

Potential supplier contributions from ESI include: Providing feedback on feasibility of materials and processes Suggesting alternatives Improve cost Improve lead time All of the above

All of the above

The make or buy decision analysis tells us: It is not that important to the company's success to outsource items that are not strategic to our success Do we have the assets to dedicte to improving the process. Before outsourcing a strategic item, we should seriously consider our own ability to successfully make that item All of the above

All of the above

The strategic sourcing matrix: Is used to segment purchases Is widely used in practice Considers the importance of the category and the complexity of the market to classify purchases All of the above

All of the above

When considering outsourcing, you should evaluate which of the following factors? Whether the item is strategically important to you How good you are at making the item versus how good suppliers are at making it The total cost of ownership of the item compared to the cost to make the item internally All of the above

All of the above

Which of the following is a "right" in the less formal definition of purchasing? Obtaining the right material In the right quantity At the right time For delivery to the right place All of the above

All of the above

As part of supplier integration: You provide feedback on technical feasibility You share information on your plans with the supplier You communicate seamlessly You provide adequate capacity to support successful launch All the above

All the above

In its relationship with Gordon Foods, Bob Evans did which of the following? Consolidated to a single source Put together ideation and innovation teams to identify ways of working together Gave the drivers access to the restaurants at night for delivery when no one else was there. All the above

All the above

Critical items (on the strategic sourcing matrix) are: Also called strategic items Suppliers are fairly interchangeable You want to generate a high amount of market competition Are straightforward markets

Also called strategic items

Supplier segmentation using the strategic sourcing matrix occurs during which step of the strategic sourcing process? Analyze Source Reconcile and pay Plan Procure

Analyze

Which of the following are stages (in order) in the strategic sourcing process? Analyze, source, bid/negotiate contract, procure, reconcile and pay. Plan analyze, source, make, pay Analyze, procure, source, pay Plan, source, bid/negotiate, procure, pay Plan, source make, deliver, return.

Analyze, source, bid/negotiate contract, procure, reconcile and pay.

Bottleneck buys: Are a good place to focus on cost reduction Are difficult to manage because there are few options Represent a large dollar volume Have sudden price spikes or a supply disruptions

Are difficult to manage because there are few options

Which of the following is not one of the four reasons to include a multi-criteria analysis in your toolkit? Comprehensiveness Disciplined Quantifiability Intuitiveness Applicability

Comprehensiveness

A strategic alliance is most likely in which spend category? Critical Transactional Routine Leverage

Critical

Which step in the process asks you to fill in your comparison matrix? Define scoring system Calculate results Decide on criteria Evaluate options Set weights

Evaluate options

Buying things for a company (purchasing) is just like buying things for yourself. TrueFalse

False

Outsourcing just means that you are buying something instead of making it. TrueFalse

False

Selecting weights is one of the least important aspects of developing a supplier selection model. TrueFalse

False

What type of costs might still remain after you outsource an item? Variable plant costs Materials costs Fixed overhead costs Processing labor costs All of the above

Fixed overhead costs

Which of the following is not a benefit of early supplier involvement is: Reduced overall development of time Increased product manufacturability Higher profit margin Better overall design and quality

Higher profit margin

When it comes to negotiations, it is important to know that: They are never a win win situation Getting the best price is paramount Knowledge is power Contracts are always very complex and time consuming

Knowledge is power

A purchase where there are a large number of competitive suppliers and you buy a fairly large amount relative to the market would most likely be classified as: Leverage Critical Routine Unique

Leverage

During WWII, ___________ increased the emphasis on purchasing. Lean management Materials shortages Rationing of food supplies Women in the workforce

Materials shortages

On the supplier relationship continuum, you spend the most time on relationships where you want to: Reduce costs Assure availability Maximize value co-creation Minimize financial investments

Maximize value co-creation

As a purchasing manager, you have to make many purchasing decisions. The organization's secretary comes to you asking what type of office supplies you want for your employees' desks. This purchasing decision would be considered a _______ item. Easy Critical Simple Obvious Non-critical

Non-critical

Which of the following is not a step in the strategic sourcing process? Analyze Reconcile and pay Source Plan Procure

Plan

What are the five activities of the SCOR model? Prepare, Source, Make, Determine, Respond Prepare, Service, Make, Deliver, Respond Plan, Service, Manufacture, Determine, Respond Plan, Source, Make, Deliver, Return

Plan, Source, Make, Deliver, Return

During which step of the strategic sourcing process do you actual purchase items you have contracted for? Bid/ Negotiate and contract Procure Reconcile and pay Source Plan

Procure

______________________ increased visibility of purchasing from the mid 70s to the mid 80s. Television The internet Scarcity/inflation Transportation

Scarcity/inflation

Which step in the process helps you determine how important each criterion is? Evaluate options Define scoring system Calculate results Decide on criteria Set weights

Set weights

During which step of the strategic sourcing process would you identify potential suppliers? Procure Analyze Plan Reconcile and pay Source

Source

In purchasing a category is: A step in the strategic sourcing process A standard grouping of materials that all companies use regardless of industry Represented by the strategic sourcing matrix A related group of items

A related group of items