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Exam 7: Supply Management

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Question 1

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A company using portfolio analysis correctly decides to streamline the purchasing process for a few items by use of EDI and automated requisitions to the greatest extent possible.The quadrant that these items fall in is most probably the:

A) bottleneck quadrant.
B) critical quadrant.
C) leverage quadrant.
D) routine quadrant.

E) B) and C)
F) A) and D)

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Question 2

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This table contains the performance criteria and scores (larger numbers are better)for four potential suppliers to Satriale's Pork Store.Evaluate the data and identify the BEST source for Satriale's.Consider the two runners-up to the best source and what points of negotiation might lead them to becoming the optimal supplier.

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Company P has the highest score,3.8,and ...

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Question 3

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The entire plant needs a fresh coat of paint so you,as the operations manager,are charged with securing a painting contract to accomplish this.You locate four painting contractors and ask them for their performance on four criteria.Their responses,along with your minimum standards and the importance you place on each criterion,is shown in the table.Assign scores from 1 to 5 where 1 is terrible and 5 is excellent,for each contractor's performance on each criterion and determine who should be awarded the contract.Write a brief explanation for all the 1s and 5s you assign.

Flingers Inc.reveals the following information in their annual report for FY 2014. What is Flingers' profit margin?

The purchasing team occasionally examined its spending patterns to identify irregularities as part of a(n)________.

What takes place in each step in the procure-to-pay cycle and which step is most critical?

The weighted-point evaluation system allows for a completely objective decision to be made.

A company that regularly outsources goods and services may have established close relationships with their suppliers and therefore will allow these suppliers the first opportunity to bid for new business needs.These suppliers are known as ________.

Dusty is evaluating three bids to supply fence hardware for the 5 acres of pasture that need to be fenced.Breezy submits a bid of $40 per unit with a defect rate of 2%; Lady's bid is $50 per unit with a defect rate of 0.5%; and Spike's bid is $30 per unit with a defect rate of 5%.If a section of fence fails,it costs an average of $500 in losses and herding costs to round up all of the capybaras.Dusty believes it will take 1000 units to fence in this pasture configuration; what is the lowest total cost?

Company A spends $250 million purchasing materials and subassemblies that it processes and sells for a total of $350 million.The cost of goods sold by Company A is $350 million.

A manufacturer seeking to reduce the variability of the quality of purchased products should use multiple sourcing.

A description method used when a product or service is proprietary or when there is a perceived advantage to using a particular supplier's product or services is:

Single sourcing is a better choice than multiple sourcing from the perspective of:

Flingers Inc.reveals the following information in their annual report for FY 2014. They plan to aggressively pursue cost savings in the purchasing area for FY 2015 and expect to lower their cost of goods sold by 8% while maintaining the same level of sales.Calculate Flingers' leverage effect for 2014 and their expected leverage effect for 2015.Compare the two results for your leverage effect calculations and provide insight as their relative magnitude.

A sourcing strategy in which two suppliers are used for the same purchased product or service is:

Briefly discuss the three trends that make supply management so critical in today's business climate.

Terms and conditions for a purchased service that indicate what services will be performed and how the service provider will be evaluated is called a:

Firms do not compete only against global competitors,but against:

Dusty is evaluating three bids to supply fence hardware for the 5 acres of pasture that need to be fenced.Breezy submits a bid of $40 per unit,Lady's bid is $50 per unit,and Spike's bid is $30 per unit.If a section of fence fails,it costs an average of $500 in losses and herding costs to round up all of the capybaras.Dusty believes it will take 500 units to fence in this pasture configuration.What defect rates for the three suppliers would make Dusty indifferent among them from a total cost standpoint?

For the average manufacturer,over 50 percent of the value of shipments comes from materials.