CHAPTER 5 Sourcing Materials and Services

Some firms are moving towards increasing their number of suppliers in order to encourage competition and lower procurement costs.

False

Strategic sourcing is almost the same as procurement.

False

The most important factor in supplier selection is usually financial health.

False

What suppliers' selection criteria are described by a price and financial stability?

Financial

The first step in Managing Strategic Sourcing Process is to develop a strategic plan, which includes forming a planning committee with hey stakeholders.

True

There are seven steps in the Strategic Sourcing Process.

True

When a firm makes a "make" decision when analyzing whether to "make or buy," they may still have to purchase some types of inputs from outside suppliers.

True

What supplier selection criteria are described by production capability, labor relation, and operating controls?

Capability

In the Implement Sourcing Strategy step, the most important thing is to:

Choose a supplier a supplier, depending on the objectives of the sourcing decision.

What supplier selection criteria are described by attitude, cultural compatibility, training aids, packaging, and repair service?

Desirable qualities

Zahira, the CEO of regional chain of bread bakeries, wants to ensure healthy relationships with all of her firm's suppliers, which is why she routinely invites account executives and other members of her suppliers' teams to visit the bakeries, sample the products, and understand as much as they can about her business. This is Zahira's way of:

Developing close relationship.

Strategic sourcing as a process is a far more broader and more comprehensive than procurement. Overall, the process starts with the:

Development of a planning committee.

To help guide the strategic sourcing process, five core principles are recognized a s a key driver to archive the desired levels of value. Which of the following id not one of those core principles?

Drive continuous savings

"Distinctives" are low-risk, high-value items that are fundamental to the company's finished product.

False

An advantage of e-sourcing and e-procurement is that there is little risk involved.

False

Data management and analytics for tracking part numbers and suppliers' information are essential for companies of all sizes.

False

Landed costs are independent of sales/FOB terms.

False

A type of e-commerce site where product or service information is provided by multiple third parties, such as Amazon or Expedia, is called a(n):

Online marketplace

Which approach represents a strategy in which the entire organization is focused on the examination of process variability and continuous improvement?

Total Quality Management

Commodities are items or services that are low in risk but high in value.

True