Quiz 4 - Sourcing & Supplier Managment

What is one drawback of outsourcing?

•  it does not provide access to specific skills or technologies.

• it invariably results in an increase in both fixed and recurrent costs.

• it can make an organization lack of management skills to control suppliers.

• it cannot increase accountability of suppliers through a written contract.

A multinational automotive manufacturer relies on a single supplier for an advanced battery component. The supplier has a monopoly on this technology. How should the company classify and manage this supplier in the Kraljic Matrix?

• Leverage Item – Engage in aggressive price negotiations

• Strategic Item – Develop a long-term partnership with supplier collaboration

• Bottleneck Item – Secure supply contracts but seek alternatives

• Non-Critical Item – Maintain a transactional relationship

Which is true about outsourcing and sub-contracting?

 

• Sub-contracting is a tactical, short-term approach whereas outsourcing is a strategic long-term decision.

• Enterprises do not need to retain certain core capabilities when outsourcing.

• “Sub-contracting is a tactical, short-term approach whereas outsourcing is a strategic long-term decision” & “Enterprises do not need to retain certain core capabilities when outsourcing” are correct.

• “Sub-contracting is a tactical, short-term approach whereas outsourcing is a strategic long-term decision” is correct, “Enterprises do not need to retain certain core capabilities when outsourcing” is incorrect.

A tech startup is looking for a logistics supplier to handle global distribution. What key metric should be considered in supplier evaluation?

• On-time delivery performance

• Supplier’s advertising reach

• Number of warehouses owned by the supplier

• Total number of clients the supplier serves

Recent research indicates that all of the following are top knowledge areas for procurement people except:

 

• Supplier relationship management

• Total cost analysis

• Consumer behavior

• Supplier analysis

All of the following are required elements in a purchase requisition except:

• Quantity and date required

• Estimated unit cost

• Operating account to be charged

• Identification and approval of supplier by the end user

A category manager for ductile iron castings (easy to buy products) is tasked with consolidating expenditure and driving savings within the category. The category manager forms a cross-functional sourcing team, conducts spend analysis, and determines that the category fits the “leverage” quadrant of the Kraljic matrix. In this situation, which of the following is the BEST course of actions for the team to take?

 

• Check the existing supply base for capabilities and determine if the suppliers are in good standing with the company.

• Determine the number of suppliers required along with their capabilities, and establish criteria to evaluate them.

• Conduct an internet search to find new iron casting suppliers in low-cost countries.

• Pick an existing supplier and have it design the part so that its production  processes are optimized for cost.

Which of the following is not one of the common ways that internal customers should communicate their needs to procurement?

•  Purchase requisitions from internal users

• Chance meeting in the company cafeteria

• Forcasts and customer orders

• Material requirements identified during new product development

Most organizations are not in business to provide information technology services, yet many have spent valuable time and resources on information technology functions when they should have instead worked on important competencies such as marketing, customer service, and new product design. Outsourcing helps tackle this problem. Which benefit does outsourcing primarily provide in such a scenario?

 

• reduces fixed and recurrent costs.

• protects strategic information from being accessible to external suppliers.

• increases accountability even without a written contract.

• helps focus on an organization’s core business.

Which of the following is the MOST important reason that the supply team need to forecast?

 

• Determine the quantity required.

• Determine the availability of the product/ service.

• Determine the supplier’s delivery time.

• Determine the price of the product/ service.