SCM239 Exam 1 review

The role of supply management is best captured by the following question:

How can supply and suppliers help decrease costs and increase revenues?

The key question in strategic supply management is:

How can supply and supply chains contribute effectively to organizational objectives and strategy?

The profit-leverage effect of supply savings means that:

a reduction in purchase spend increases profit more than an equivalent increase in sales.

Strategic planning can be defined as:

an action plan to achieve specific long-term goals and objectives.

Linking current and future needs with current and future markets is the primary focus of:

an effective supply strategy.

Centralization of the supply has the advantage of:

greater buying specialization.

To effectively manage supply risks, the supply manager must:

identify and classify risks, assess the potential impact, and develop a risk mitigation strategy.

Supply management may indirectly contribute to the organization's competitive advantage by:

improving customer satisfaction.

If organizational objectives and supply objectives are incongruent:

it will be difficult to translate organizational objectives into supply objectives.

Expediting:

may be caused by the buyer or the supplier.

Poor internal compliance with the supply process:

may indicate that internal customers do not trust the process or suppliers.

The greatest opportunity to affect value in the purchasing process is when:

needs are recognized and described.

Evaluation of the supply function's contribution to organizational goals and strategies can be viewed in the context of:

operational and strategic. & direct and indirect.

In most organizations, supply-operations coordination is essential to:

operational excellence.

Supply management can play an important role in mergers, acquisitions, and divestitures by:

providing competitive intelligence about competitors and suppliers, and identifying opportunities of operational synergies

Close to 70 percent of the value of any given requirement is established during:

recognition and description of need

Traveling requisitions are used for:

recurring requirements and standard parts.

Blanket purchase orders:

reduce costs by decreasing the number of purchase orders issued.

Supply's contribution to the organization's competitive position depends on its ability to:

reduce costs, enhance revenues, and manage assets.

Making the procure-to-pay (P2P) process as seamless as possible can:

reduce order cycle times and improve satisfaction of internal customers and suppliers

Standardization of supply processes can result in:

shorten process cycle times.

Online reverse auctions are best suited for situations where:

specifications are clearly defined, there is a competitive supply market with qualified suppliers willing to participate, and the buyer is prepared to switch suppliers if necessary.

Which factors have a major influence on supply's level in the organization:

the nature of the products or services acquired; the extent to which supply and suppliers can provide competitive advantage; the ratio of purchased material and services costs to total costs or total income.

Improving the efficiency and effectiveness of the process for small value orders can be achieved through:

vendor/supplier managed inventory systems and the use of purchasing cards.

When developing supply strategies, the supply manager must determine:

what to make or buy, what to insource or outsource, and what standard items or what customized items will be acquired.

Specialization within the supply function:

allows staff to develop expertise in particular areas.

The payment process:

and the supply process should be aligned in policy and practice

Information flows:

between and among supply, and other internal functions and external sources.

Supply should constantly strive to standardize:

capital equipment purchases, raw material purchases, maintenance, repair, and operations (MRO) supplies purchases, and services purchases and supply management processes

To achieve time, quality, or cost reduction targets, organizations may:

commit resources to cross-functional teams.

Supply strategies that are designed to exploit market opportunities and organizational strengths to give the buying organization an advantage in the marketplace are known as:

competitive-edge strategies.

A purchasing consortium:

consists of two or more independent organizations that combine requirements for materials, services, and capital goods to gain better pricing, service, and technology.

Three major challenges exist when setting supply objectives and strategies:

effectively interpreting corporate and supply objectives, selecting appropriate actions to achieve objectives, and integrating supply information into organizational strategies.

The organizational structure (centralized, decentralized, or hybrid) of the supply function:

influences supply processes, internal cross-functional relationships, and procedures and systems.

On average, the dollars spent with suppliers as a percent of revenues:

is greater in manufacturing organizations than in service organizations

Effectively and efficiently applying technology to the supply management process will:

lower the total cost of doing business

Which one of the following is NOT one of the six major supply strategy areas:

new-product development strategies.

If the buyer has a clear and unambiguous description or specification, and wants to find out which supplier can deliver the best value when and where needed, he or she will typically issue a:

request for quotation (RFQ).

Electronic data interchange (EDI) provides:

secure transmission, greater accuracy, and shorter process cycle time for all data.

To contribute to organizational strategy, the supply department should:

seek opportunities to provide competitive advantage.

A systems approach to managing the flow of information, materials, and services from tiers of suppliers through the buying organization to tiers of customers is:

supply chain management.

Strategies designed to make available the knowledge and capabilities of supply chain members to others in the buying organization are called:

supply-chain-support strategies.

Normally, most organizational objectives can be summarized under four categories:

survival, growth, financial, and sustainability.

Supply decisions can affect:

the income statement and the balance sheet.

Efficient and effective supply processes are needed because of:

the large volume of items, dollar value, severe consequences of poor performance, the potential contribution to organizational objectives, and the need for an audit trail.

The objectives of supply are to obtain:

the right quality materials, in the right quantity, at the right time and place, from the right source, at the right service level, and at the right price.

One purpose of a requisition is:

to clarify the description of need before communicating with potential suppliers.

Organizational objectives and supply objectives typically are expressed:

differently, making it difficult to translate organizational objectives into supply objectives.