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WorksheetsPROCUREMENT
Total questions: 153
Worksheet time: 1hrs 18mins
A drawback to a business of using just in time stock control is
High insurance costs
High insurance costs
Storage costs will be high
Delays in deliveries could result in idle resources
Procurement vs Purchasing
Purchasing has a broader meaning than procurement
Procurement is broadly equivalent to purchasing.
• Procurement has a broader meaning than purchasing.
None of the above
Which of the following is the first stage in a supply chain for a chocolate bar?
The supplier of cocoa beans
The manufacturer of the chocolate bar
Transportation between each stage of the supply chain
The retailer
A business getting good value when buying products means that it will:
Always get the cheapest price
Always get the highest quality
Get the right balance between price and quality
Charge its customers the lowest price possible
.Which of the following is a benefit to a business of having an efficient procurement department?
Improved levels of customer service
Increased levels of staff motivation
Higher sales revenue
Lower unit costs
The time difference between a business ordering and receiving stock is called the:
Reorder quantity
Lead time
Buffer stock
Reorder level
Which area of business will Amazon particularly focus upon to ensure customer delivery on time?
Finance
Sales
Logistics
Marketing
The business term that involves choosing a supplier, agreeing what to buy at a certain price and by when is called:
Logistics
Supply chain management
Stock control
Procurement
Purchasing transaction is a contract between?
Business and buyer
Seller and buyer
Industries and sellers
Seller and business
What is the primary goal of logistics management?
Maximizing profit
Minimizing lead time
Reducing customer complaints
Optimizing supply chain operations
Which of the following are key information in a purchase order when the order is first created?
Prices of the material ordered
Quantity of material ordered
Requested delivery date
Bill to address
which of the following document is not relevant to the price of the materials?
Delivery receipt
Purchase requisition
Packing list
Invoice
A Three-way matching involves which of the following document?
Delivery receipt
Purchase order
Invoice
Packing list
Which of the following are key information in a packing list?
Order quantity
Dimension
Prices of the material ordered
Weight
Requested delivery date
Which of the following can a company use to select a vendor from a list of potential suppliers ?
Vendor list
Company code
Vendor master
None of the above
Materials that are acquired to be used within the organization referred to as
Stock materials
Transfer materials
Vendor materials
Consumable materials
Data for source determination are obtained from:
Purchase info records
A source list
Contracts & agreements
The vendor master record
1.Why do organizations need to rationalize the supply base?
To increase the number of suppliers to optimize costs and resources.
to reduce the number of suppliers to increase values and save the organization’s costs, resources.
“To increase the number of suppliers to optimize costs and resources” is incorrect, “to reduce the number of suppliers to increase values and save organization’s costs, resources” is correct.
“To increase the number of suppliers to optimize costs and resources” & “to reduce the number of suppliers to increase values and save organization’s costs, resources” are correct.
It is a good idea for companies to outline explicit policies to ensure that those who deal with suppliers know precisely what is and what is not acceptable behaviour. These often include rules regarding the receipt of gifts, the treatment of confidential information, a code of conduct, fair and ethical quotation and negotiation processes, declaration of conflicts of interest, diversity, personal benefits and illegal/ unethical behaviour.
True
False
As part of its request for proposal (RFP), an organization requires suppliers to include copies of their safety policies and procedure manuals. Supplier XYZ does not have a safety policy and consequently does not include a manual with its RFP response. Based on this information, the buying organization is likely to categorize XYZ as a_______.
certified supplier
certifiable supplier
de-barred supplier
disqualifiedsupplier
Strategic sourcing process begins with the ____.
Selection of an appropriate supplier
Issuance of a purchase order
Identification of a need (a requirement)
Determine who can authorize the purchase.
Which of the following is a key component of an organization mission statement.
How is the organization will treat employees.
How the organization will meet its customers’ needs.
How the organization will measure performance.
How the organization willl treat suppliers.
The supplier base relates to__________________:
The number, range, location of the vendors that supply the purchaser.
The number, range, location and characteristics of the vendors that supply the purchaser.
The number, range of the vendors that supply the purchaser.
The quality, number, range, location and characteristics of the vendors that supply the purchaser.
What does CIPS stand for?
Chartered Institute of Procurement and Supply.
Certified International Property Specialist.
Canadian Information Processing Society
Communication and Interpersonal Skills.
In procurement procedure, why should we need to keep and record all document?
For tax purpose.
For auditing purpose.
For future purchasing negotiation purpose.
All of the above
What is due diligence?
Is a tool to determine that supplier has necessary qualities to become a partner of buying organization
Is a methodology to determine that supplier has necessary qualities to become a partner of buying organization
Is an organization to determine that supplier has necessary qualities to become a partner of buying organization
Is a third party to determine that supplier has necessary qualities to become a partner of buying organization
Why is it necessary to evaluate supplier performance?
In order to significantly improve supplier performance.
Decide whether a supplier should be retained or removed.
A&B are correct.
None is correct.
A Three-way match involves which of the following documents?
Delivery note, purchase order/ contracts, packing list.
Red Invoice, delivery note, purchase order/ contract.
Delivery note, commercial invoice, packing list.
Purchase order/ contract, packing list, commercial invoice.
A_______ refers to an individual or entity purchasing products from manufacturers and then selling them directly to customers. By contrast, a _________ is a person or business that provides raw materials, parts, and machines to manufacturing units.
Supplier/ Vendor.
Supplier/ Distributor.
Vendor/ Supplier.
Distributor/ Retailer.
In Bensaou model, which relationship profile needs 02 parties to invest highly specialized asset.
Captive buyer.
Strategic relationship.
Captive supplier.
Market exchange.
. 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.
Which statement is correct about E-commnerce and E-business?
E-business refers to buying and selling online, while e-commerce encompasses all business conducted online. E-business can be viewed as a subset of e-commerce.
E-commerce refers to buying and selling online, while e-business encompasses all business conducted online. E-commerce can be viewed as a subset of e-business.
E-commerce refers to buying and selling online, while e-business encompasses all business conducted online. E-business can be viewed as a subset of e-commerce.
E-commerce refers to all business conducted online, while e-business refers to buying and selling transaction. E-commerce can be viewed as a subset of e-business.
. 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.
____are those items provided by suppliers and used directly during productions or service delivery.
Direct materials
Indirect materials
Internal materials
Vendor managed inventory
5. 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 requisitions 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 or service.
A/ An_____ involves sending a preliminary survey to suppliers
Request for Quotation
Request for Information
Purchase Order
Order Release
____is a process associated with defining contract, defining roles and responsibility of both parties, and advising when to modify and ensure appropriate escalation.
Spend analysis
Contract management
Cost management
Supplier selection
It is a good idea for companies to outline explixit policies to ensure that those who deal with suppliers know precisely what is and what is not acceptable behavior. These often include rules regarding the receipt of gifts, the treatment of confidential information, a code of conduct, fair and ethical quotation and negotiation processes, declaration of conflicts of interest, diversity, personal benefits and illegal/ unethical behavior.
True
False
When suppliers deliver goods/ products to companies. What action should companies do?
Selecting Suppliers.
Check the goods/ products to make sure they are correct as requested.
Placing Order.
Developing a Purchase Agreement.
The home medical testing device includes a very sensitive sensor with a customized, easily readable display. This sensor is “low cost but high risk” because shortages could stop production at the buying organization’s plant. In this situation, which term BEST describes the sensor?
Bottleneck item.
Non -critical component.
Leverage item.
Strategic item.
Which is NOT one of the advantages of negotiating via email?
Saving time and travel cost.
Build rapport and trust easily.
Provoke less stress.
Negotiate anytime you want.
____are the action plans designed to help achieve a desired result.
Arguments
Questions
Strategies
Tactics
During the COVID 19 pandemic, which method we should not use?
Negotiating via telephone
Negotiating via email
None of them
Negotiating in person
Negotiation___refers to the overall approach used to reach a mutually beneficial agreement with a supplier that holds different points of view from the buyer
Tactic
Positioning
Strategy
Conflict
We had better not use email when negotiating because:
There is a tendency to lie or exaggerate with email
Information may be stolen
Less conflict are taken place
"There is a tendency to lie or exaggerate with email & Information may be stolen" are correct
A face-to-face negotiation can be successful if people
All of them
Read nonverbal cues
Be mindful of your stance
Maintain eye contact
When a negotiation needs to be delivered to a large amount of people in one go, which one should we use?
Telephone
Direct talk
None of them
What should we do before negotiating?
Maintain a suitable tone of voice.
Prepare content and practice carefully.
All of them.
Concentrate on all information your partners give.
Regarding interpersonal negotiations, which is NOT something that negotiators should do?
Prepare well before the negotiation
Gain the right to speak more than your partner
Patience, control emotions
Follow the win-win principle
During negotiation should we prolong as much time as possible?
Yes
No
Which of the following is the primary reason for ineffective cross-cultural business negotiations?
insufficient knowledge about native bargaining rituals
highly restrictive government legislation
poorly planned business strategies
language differences
Process of “give and take” resulting in a compromise where each side makes a concession for the benefit of everyone involved.
Skills
Negotiation
Types of nonverbal communication
Active Listening
This is considered a “win-lose” negotiation.
Discontracted negotiations
Integrative negotiations
Adversarial negotiation
Collaborative negotiation
Negotiation requires the ability to see the problem and ...
Find a solution.
Find a question
Find a dove
Find a business
Building rapport (pronounced “ra-pore”) is:
The act of building relationships with others in which both parties feel supported and understood.
The act of building relationships with dinosaurs in which both parties feel supported and understood.
Integrative negotiations implies a "win-win" situation and involves compromise and cooperation to create value and invest in long-term relationships.
True
False
Distributive negotiation is a
negotiation that seeks to divide up a fixed amount of resources so that there is win–win situation.
negotiation that seeks to divide up a fixed amount of resources; a win–lose situation
negotiation that seeks one or more settlements that can create a win–win solution.
negotiation that seeks create a win–win solution
Before entering into negotiation with the other party, you should
Do nothing--- everything can be done on the same day
Research about the other person or negotiation party to find out their needs, strengths and weaknesses
Have a big meal and get a good night's sleep
Go to the library and read up something about negotiation
What is a common mistake while negotiating ?
Listening to the other person
Rushing into making a decision
Being open-minded and flexible
Asking probing questions to be sure of the correctness of factual information
The final aim of negotiation is to
end a dispute
reach an agreement which is satisfactory to both or more parties
go to a concession
win at any cost
The area of overlapping position among issues, when there is one, between the negotiators (buyer & seller) is termed___
Bargaining zone or ZOPA
Concurrent zone
Agreement possibility
Positive position
All of the following are effective e-negotiating practices except____
Use a blended negotiation, starting with an initial face to face meeting to a telephone call to build essential rapport with other party.
Establish common ground and interests to build mutual trust.
Forward email negotiations to the other party' s immediate superior for verification.
Proofread the entire message, including addresses before sending the email out.
A/An _____ is also known as the negotiator’s bottom line or reservation point, that is, that point in the negotiation where it is most advantageous for the negotiator to walk away from the table and implement his or her next-best option.
BATNA
position
interest
need
Which of the following strategies is most effective when a procurement professional has strong alternatives outside the negotiation?
Avoidance
Collaborative negotiation
Competitive negotiation
Accommodation
In a procurement negotiation, a "contingent contract" is best used to:
Resolve disputes by including a third-party arbitrator.
Set conditions for future adjustments based on uncertain outcomes.
Secure exclusive rights for the buyer over a particular supplier.
Allow either party to withdraw from the agreement within a specific timeframe.
: A procurement department's value add is that it__ between the firm and its supplier.
A. mediates
B. negotiates
C. manages all relationships
D. interfaces
What characterizes Bottleneck suppliers?
A. Cost cutting through aggressive negotiation.
B. Supply assurance is critical.
C. Risk diversification through multiple suppliers
D. Set up tight control mechanisms of vendors.
What is the name of the document used by the purchasing de contains a description of the items required?
A. Request for Quote (RFQ)
B. Purchase Requisition (PR)
C. Authorization for Purchase (AFP)
D. Managerial Requisition Form (MRF)
Person in purchasing department has the authority to approve purchase of goods or services
A. Division Manager
B. BU Manager
C. Purchasing Manager
D. Buyer
Ongoing transactions in the business market where the customer and the supplier focus only on the timely exchange of standard products at competitive prices could be described as:
A. transactional exchange.
B. a partnership.
C. collaborative exchange.
D. a strategie alliance.
What is strategic sourcing?
A. Buying goods and services only from local suppliers
B. Developing long-term relationships with key suppliers
C. Purchasing goods and services as needed without planning
D. Focusing solely on cost reduction without considering quality
What is supplier relationship management (SRM)?
A. Minimizing interaction with suppliers to reduce costs
B. Developing mutually beneficial relationships with suppliers
C. Negotiating the lowest price with suppliers
D. Ignoring supplier performance metrics
What is the purpose of supplier segmentation?
A. To increase procurement costs
B. To categorize suppliers based on their importance to the organization
C. To reduce supplier diversity
D. To eliminate all but one supplier for each category of spend
What is the difference between a transactional relationship and a strategic partnership with suppliers?
A. Transactional relationships focus on short-term gains, while strategic partnersh focus on long-term value creation.
B. Transactional relationships involve minimal communication, while strategic partnerships involve open collaboration.
C. Transactional relationships prioritize cost reduction, while strategic partnership prioritize innovation and joint problem-solving.
D. All of the above
Consider the following products and classify them based on the Bensaou mc
Fruits and Vegetables from a Local Farmer's Market
A. Captive Buyer
B. Captive Supplier
C. Market Exchange
D. Strategic Partnership
A multinational beverage company regularly purchases packaging materials such as plastic bottles and aluminium cans for its products. These materials are standardized and readily available from multiple suppliers worldwide. The company has significant purchasing volume, allowing it to negotiate favorable pricing and terms with suppliers.
How would you categorize the procurement of packaging materials using the Kraljic Matrix:
A. Routine Items
B. Bottleneck Items
C. Leverage Items
D. Strategic Items
What are the key steps involved in the strategic sourcing process?
A. Identify needs, select suppliers, negotiate contracts, and manage relationships
B. Identify competitors, analyze market trends, develop marketing strategies, and promote products
C. Identify sales targets, develop pricing strategies, advertise products, and close deals
D. Identify customer complaints, address quality issues, improve customer service, and retain customers
What is global sourcing?
A. Sourcing from suppliers located within the same country
B. Sourcing from suppliers located in multiple countries
C. Sourcing from suppliers with global certification
D. Sourcing from suppliers with high-quality standards
What are some challenges associated with global sourcing?
À. Language and cultural differences
B. Currency fluctuations and exchange rate risks
C. Longer lead times and shipping delays
D. All of the above
Which of the following is NOT typically included in TCO?
A. Initial purchase price
B. Maintenance and repair costs
C. Employee salaries unrelated to the product
D. End-of-life disposal costs
What are some key characteristics of companies that achieve world-clas: performance?
A. Innovation, continuous improvement, and customer-centricity
B. Large workforce and extensive market presence
C. High levels of bureaucracy and rigid organizational structures
D. Reactive decision-making and lack of strategic planning
What are some strategies that companies can employ to enhance their performance and competitiveness?
A. Investing in employee training and development
B. Streamlining processes and eliminating waste
C. Fostering a culture of innovation and collaboration
D. All of the above
How can procurement contribute to achieving strategic objectives of the organization?
A. By aligning procurement strategies with overall business goals
B. By focusing solely on cost reduction
C. By outsourcing procurement functions to third-party providers
D. By prioritizing short-term gains over long-term value
What is the difference between strategic sourcing and tactical purchasing?
A. Strategies sourcing focuses on short-term cost savings, while tactical purchasing focuses on long-term supplier relationships.
B. Strategic sourcing involves long-term planning and supplier selection, while tactics purchasing involves day-to-day transactional activities.
C. Strategic sourcing is conducted by top management, while tactical purchasing is delegated to mid-level managers.
D. Strategic sourcing prioritizes speed and efficiency, while tactical purchasing emphasizes quality and innovation.
What is the role of procurement in managing supply chain risk?
A.Procurement has no role in managing supply chain riíks
B.Procurement plays a proactive role in identifying and mitigating potential risks in th pply chain
C.Procurement solely relies on suppliers to manage supply chain risks
D.Procurement focuses only on cost reduction and does not consider risk management
What is the purpose of a procurement policy?
A. To maximize profits for the organization
B. To outline the rules and procedures governing the procurement process
c. To minimize competition among suppliers .
D. To expedite the procurement process
What role does procurement play in ensuring compliance with legal and regulatory requirements?
A. Procurement has no role in ensuring compliance
B. Procurement ensures compliance with legal and regulatory requirements by conducting due diligence on suppliers and contracts
C. Compliance with legal and regulatory requirements is solely the responsibility of legal department
D. Compliance with legal and regulatory requirements is not necessary in procurement.
How can organizations ensure transparency and fairess in the procurement process?
A. By favoring certain suppliers over others
B. By maintaining confidentiality and excluding stakeholders from the process
C. By adhering to clear procurement policies and procedures, conducting open ar competitive bidding processes, and providing equal opportunities to all qualified suppliers
D. By avoiding documentation and record-keêping
What is the purpose of a supplier evaluation process in procurement?
A. To exclude potential suppliers based on personal biases
B. To ensure compliance with legal requirements
C. To assess and select suppliers based on predefined criteria such as quality, cost, delivery, and reliability
D. To establish exclusive partnerships with suppliers
What are some key performance indicators (KPIs) commonly used to measure supplier performance?
A. On-time delivery, quality defects, and cost savings
B. Employee satisfaction, office infrastructure, and company culture
C. Executive bonuses, shareholder dividends, and revenue growth
D. Number of employees, market share, and brand recognition
When is a purchase order (PO) typically issued in the procurement process?
A. After receiving the invoice from the supplier.
B. Before negotiating the contract terms with the supplier.
C. After the supplier confirms the order but before the shipment is made.
D. After the purchase requisition has been approved and before placing the order with the supplier.
What are the key components of a procurement procedure?
A. Supplier selection and price negotiation
B. Requisition, sourcing, evaluation, contract award, and supplier management
C. Ordering and payment processing
D. Inventory management and distribution
What are some potential consequences of non-compliance with contract obligations in procurement?
A. Loss of credibility and reputation damage
B. Legal disputes and financial penalties
C. Disruption of supply chain operations and loss of business opportunities
D. All of the above
. In procurement, what does "E-Procurement" primarily involve:
a) Electronic payment systems
b) Online procurement processes and tools
c) Procurement of electronic goods
d) Emergency procurement procedures
Which support tool is commonly used to automate and manage procurement processes electronically?
a) Customer Relationship Management (CRM)
b) Enterprise Resource Planning (ERP)
c) Supply Chain Management (SCM)
d) Electronic Procurement (E-Procurement) systems
What procedure ensures that all procurement activities comply with relevant laws and regulations?
a) Vendor Registration
b) Compliance Audits
c) Market Analysis
d) Contract Management
Which policy outlines the ethical standards and behavior expected from procurement staff?
a) Procurement Compliance Policy
b) Code of Conduct
c) Supplier Diversity Policy
d) Conflict of Interest Policy
Which procedure involves validating that the goods or services received meet the specified requirements before approving payment?
a) Goods Receipt
b) Three-Way Matching
c) Supplier Evaluation
d) Invoice Reconciliation
Which procurement term refers to the practice of evaluating and selecting suppliers based on their sustainability practices?
a)green procurement
b) Ethical sourcing
c) Sustainable sourcing
d) Eco-friendly purchasing
Which procurement document outlines the specifications, terms, and conditions for a project and invites suppliers to bid?
a) Purchase Order
b) Statement of Work (SOW)
c) Invitation to Tender (ITT)
d) Service Level Agreement (SLA)
In procurement procedures, what is the significance of a "Procurement Lifecycle"?
a) It outlines the steps from identifying needs to managing supplier relationships
b) It details the financial aspects of procurement
c) It focuses solely on supplier selection
d) It describes the legal requirements for procurement
What is the primary role of a procurement audit?
a)approve purchase orders
B) to evaluate the efficiency and compliance of procurement processes
c) To negotiate better terms with suppliers
d) To manage supplier relationships
E-Commerce is used by
Individuals
Companies
Both
Neither
how many levels of organizational policy ensure alignment from the top of the organization down to specific operational tasks?
3
4
6
5
What's the aim of E-SCM?
Maximize Sales Growth
Minimizing Cost
Enhance Sales Perfẻomance
All
How many steps are included in the procurement procedure?
6
7
8
9
What documents are needed for three-way matching?
PO (Purchase Order), GR (Goods Receipt), Invoice
B/E (Bill of Exchange), GR (Goods Receipt), Invoice
PO (Purchase order), Invoice, B/E (Bill of Exchange)
P/N (Promissory Note), PO (Purchase Order), GR (Goods Receipt)
Which applications are considered e-commerce?
Shopee
SAP-SCM
Netflix
Coupa
How many steps are there in the strategic sourcing process?
2
4
3
5
Which of the following is an example of Strategic Sourcing?
Ordering paper from a nearby store due to an urgent need
Developing long-term contracts with trusted suppliers after spend analysis
Buying spare parts from various suppliers based on price
Switching suppliers quickly in case of a disruption
Which of the following is NOT a key factor to assess in supplier evaluation?
Financial health
Productive capacit
Marketing strategy
Health and safety policies
What is the focus of the corporate strategy in the integrative strategy development process?
Support business unit strategies
Define the businesses the corporation will participate in
Detail how supply management supports the business
Establish partnerships with key suppliers
What is the first stage in the Procure to Pay (P2P) process?
Supplier Identification/Selection
Forecast and Plan Requirement
Contract/Purchase Order Generation
Need Clarification (Requisition)
What does Total Cost of Ownership (TCO) NOT typically include?
Acquisition costs
Operating costs
Initial purchase price
Supplier's profit margin
Which of the following is a quantitative measure used to evaluate supplier performance?
Responsiveness to corrective actions
Technical skills
Delivery performance
Compatibility with the buyer
What is Tactical Sourcing focused on?
Long-term partnerships with suppliers
High-risk, critical products
Low-risk, everyday items
Detailed spend analysis
Which sourcing strategy involves analyzing a company's overall spending to optimize supplier relationships?
Strategic Sourcing
Tactical Sourcing
Quick Procurement
Spot Buying
Which of the following is a standard used to evaluate a supplier's environmental management practices?
ISO 9001
ISO 14001:2015
BSI Register
OSHA 18001
Reasons can vary greatly.
Allows a firm to focus on activities that represent its core competencies.
Company can create a competitive advantage while reducing costs.
(Entire function can be outsourced, or some elements of an activity while the rest kept in house)
• Components of Core Competency
• Goals-based Strategic Planning
• Reasons for Sme Failure in International Markets
• Reasons for Outsourcing
An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value.
•True
• False
When firms consider all the costs that can be assigned to the acquisition, use, and maintenance of a purchase, creating more realistic view of costs of global sourcing
Total cost of ownership (TCO)
Purchase price
Acquisition cost
Hidden cost
Integration of social and environmental considerations into all stages of the purchasing process with goal of minimizing impact of procurement activities on human health and environment
A.Traditional procurement
B.Purchasing
C.Sustainable procurement
D.E-procurement
.Classifies corporate purchases in terms of importance and supply complexity with goal of minimizing supply vulnerability and getting the most from a firm's purchasing power
Kraljic's Portfolio matrix
Supplier Development matrix
Supplier preferencing
Procurement Portfolio approach
Buying components and inputs anywhere else in the world due to unavailability in the market or cost effectiveness.
Global sourcing
Inventory management
International procurement
Global production
The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business.
Green sourcing
Strategic sourcing
Total cost of ownership
Cost of goods sold
Foreign exchange premiums; foreign taxes imposed; import tariffs; extra labor for special handling; additional administrative expenses; additional security measures.
Strategic cost management
Capital budget
C. Potential hidden costs
D. Potential problem areas in global sourcing
.Lowest price, specification driven, short term reacts to market, trouble avoidance, purchasing's responsibility, tactical, little sharing of information
Traditional Buyer-Supplier Relationships
Potential Hidden Costs
Global Sourcing Organizations
Supplier Selection Decisions
A company purchases raw materials from an overseas supplier. A potential local workers' strike at the destination port closest to the company's warehouse operation may disrupt the supply source. Given this situation, what should we do?
Seek to qualify a domestic supplier for these raw materials.
Arrange for the materials to be air-freighted if there is a strike.
C. Increase days of stock at the warehouse to mitigate the impact a strike could give on its operations.
D. Contact its freight expediter and redirect incoming deliveries to another reports.
.One of the major challenges of global sourcing is:
Partner selection
Exchange rates
Reduced complexity of worldwide network
Constraint ability to safeguard intellectual assets
. Offshoring is
Substituting foreign for domestic labor.
Subcontracting a part of production to another firm
Exporting
Building a factory in another country to produce for that country's market.
Which of the following refer to buying of goods or services from some vendors of other countries rather than the local country
idle sourcing
sunk sourcing
out-sourcing
in-sourcing
Which of the following is why it is sometimes cheaper for an outside company to make your product?
• The outside company uses cheap materials.
• The outside company is in a country with a low cost of living.
• None of these answers are correct.
• All of these answers are correct.
Which of these are deciding factors for companies when buying offshore?
Cost benefits &
Market penetration
Manufacturing flexibility
Access to technology & quality
Requirement for offsets
Domestic non-availability for raw materials
Đúng hết
All of the following are risks associated with outsourcing EXCEPT
• Loss of control
• Dependency on outsourcing providers
• Inadequate adaption of newer technologies
• Requiring more training of in-house staff
• Potential loss of competitive secrets
Ensuring a cultural fit with an outsourcing provider is especially important when an organization is considering which one of the following?
Offshoring
In-sourcing
On-shoring
Selective outsourcing
Which of the following makes countries attractive for offshoring?
• English language proficiency
• Political stability
• Economic stability
• Countries with friendly relationships
• All of the above
___is a simultaneous engineering approach that occurs betweeN buyer and seller and seeks to
maximize the benefits received by taking advantage of the supplier's design capabilities.
• Supplier development
• Early supplier design involvement
• Total cost of ownership
• Supplier relationship management
• Supply base optimization
Today, buyers seldom use the Internet to help locate potential sources that might qualify for further evaluation.
True
False
Using third-party information can be a timely and effective way to gain insight into potential suppliers.
True
False
Which of the following is not a commonly accepted source of information regarding potential supply sources?
• Current suppliers.
• Sales representatives.
• Television advertising.
• Organizational knowledge.
• Second-party or indirect information
Which of the following is not one of the criteria used to determine whether to buy direct vs. using a distributor?
• Size of the purchase.
• Manufacturer's policies regarding direct sales.
• Storage space available at the purchaser's facility.
• Distance between the manufacturer and the diítributor
__are more responsive to the buying firm's changing needs and can economically make frequent smaller deliveries.
• Local suppliers
• International suppliers
• Global suppliers
• National suppliers
A__is a supplier who no longer meets the buying organization's standards and will not be considered for future business until its problems are corrected.
• preferred supplier
• disqualified supplier
• certified supplier
• single source supplier
• sole source supplier
__is defined as the continual monitoring of the strength of suppliers' financial condition to ensure their ability to meet the purchaser's performance requirements for products or services.
• Operational risk management
• Sole sourcing
• Financial risk management
• Multiple sourcing
All of the following are examples of entry qualifiers that suppliers must possess before theyproceed to the next phase of the evaluation and selection process except__
• appropriate sales and marketing activities financial strength
• proven manufacturing or service capability
•capable and supportive management
• adequate facilities
Which of the following is not a risk of selecting a supplier in poor financial condition?
The supplier is unwilling to share its technical expertise with the purchaser.
• The supplier will go out of business.
• The supplier may not have the resources to invest in plant, equipment, or research that
is necessary for longer-term technological or other performance
improvements.
The supplier may become too financially dependent on purchaser.
All of the following are examples of questions that should be asked when evaluating a
supplier for longer-term relationship potential except _
• Has the supplier indicated a willingness or commitment to a longer-term relationship?
• Will the supplier engage in joint problem solving and improvement efforts?
• What is the supplier's on-time delivery performance?
• Is the supplier willing to come to us first with innovations?
An organizationally driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best
True
False
