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L4 M2 > Chapter 1 - Definitions > Flashcards

Chapter 1 - Definitions Flashcards

1
Q

Being legally responsible for something.

A

Liability

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2
Q

A justification for a proposed project or undertaking on the basis of its investment and cost implications balanced against its expected benefits.

A

Business case

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3
Q

The targets set by an organisation or company that will achieve the organisations mission or objectives

A

Corporate goals

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4
Q

Straightforward repurchase of an item bought previously, rather than considering an alternative.

A

Straight rebuy

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5
Q

A product/service that has been sourced before but requires a slight change prior to being rebought.

A

Modified rebuy

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6
Q

The purchase of an item for the first time.

A

New purchase

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7
Q

The purchase of an item using a framework agreement that has already been through a procurement process.

A

Call off

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8
Q

A reduction in the usual price when a minimum quantity is ordered.

A

Volume discount

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9
Q

The sequence of steps in a project plan that together determine the shortest time to complete the project.

A

Critical path

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10
Q

A formal invitation sent to suppliers inviting them to make an offer to supply goods or services

A

Invitation to tender

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11
Q

An estimate used to help buyers determine the end to end cost of providing a service, manufacturing, or procuring a product.

A

Whole life costs

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12
Q

Comparing an element of one business, such as price, quality or service, against another

A

Benchmarked prices

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13
Q

RAQSCI model

A

Regulatory requirements, assurance of supply, quality, service, cost, innovation

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14
Q

This is a long term agreement between a buying organisation and a selling organisation which sets out how each party proposes to share information, costs, risks and results by working together on a product or service.

A

Collaborative agreement

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15
Q

The purchase of an item without a contract when a contract for that item already exists.

A

Buying off contract

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16
Q

The elimination of a cost in the manufacture of a product or the delivery of a service by means of removing an item from the specification.

A

Cost out approach

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17
Q

The reduction of a cost in the manufacture of a product or the delivery of a service by means of changing an item in the specification.

A

Cost down approach

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18
Q

A measure of profitability that indicates whether a gain or loss has been generated compared with the initial cost.

A

Return on investment

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19
Q

The level of risk that an individual or organisation is willing to accept.

A

Risk appetite

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20
Q

The processes or stages relating to the development of a product from scratch; bringing the product to the marketplace, sales in the market and the eventual decline and the removal of the product from the marketplace. The model has 4 key stages: introduction, growth, maturity and decline.

A

Product life cycle

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21
Q

A document used to gather information about suppliers and their capabilities prior to a formal procurement process.

A

Request for information

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22
Q

An invitation to suppliers to bid on specific products or services.

A

Request for quotation

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23
Q

A document used to canvas potential solutions from suppliers when the specification is still unclear.

A

Request for proposal

24
Q

Costs that are associated with the production of a good or service.

A

Direct costs

25
Q

The general running costs of the organisation- these costs cannot easily be attributed to specific products or services.

A

Indirect costs aka overheads

26
Q

Business costs that remain the same irrespective of the volume of activity of the business.

A

Fixed costs

27
Q

Costs that change in proportion to the output of the business. They increase as the volume of the product or service is increased. For example, the amount of materials that are used or the cost of hours worked.

A

Variable costs

28
Q

A business model created by Micheal porter that details the set of coordinated processes, people and resources within an organisation which generates corporate value.

A

Value chain

29
Q

A cost that is made up of both fixed cost and a variable cost.

A

Semi variable costs

30
Q

Excess of average profit over normal profit

A

super profit

31
Q

The analysis of the cost of the individual materials, components and activities that make up a purchased item.

A

Procurement Cost Analysis

32
Q

The relationship between 2 parties where either or both of the parties are not interested in developing a closer relationship.

A

Arms Length Relationship

33
Q

Those who have an integral role in an organisations value chain over and above the provision of a product or service.

A

Strategic Suppliers

34
Q

a structured approach for defining customer requirements and translating them into product specifications.

A

Quality Function Deployment

35
Q

an approach for testing whether or not the price paid for goods or services is fair.

A

Price analysis

36
Q

A price that can be used as a benchmark against which the price of other products with similar characteristics can be assessed.

A

Price comparator

37
Q

the total cost incurred in acquiring a product from sourcing to receiving and installing.

A

Total Cost of Aquisition

38
Q

Systematic processes and activities that together have the effect of preventing mistakes in the manufacture of a product or delivery of a service

A

Quality Assurance

39
Q

the amount of time from placing the order to the goods/services being delivered.

A

Lead time

40
Q

Stock held as a contingency or insurance against disruption or unexpected demand.

A

Safety Stock or Buffer Stock

41
Q

a management process for reducing waste and thereby creating more value in a set of activities.

A

Lean

42
Q

A quality management approach that focuses on improving processes, products or services through the identification and elimination of defects.

A

Six Sigma

43
Q

A process used to review and amend new products to reduce costs and increase value to customers

A

Value Engineering

44
Q

A technique for deciding whether to follow a particular course of action based on its financial impact.

A

Cost - Benefit Analysis

45
Q

The costs incurred by a buyer when changing from one product or supplier to another.

A

Switching Costs

46
Q

The process, tools and techniques for dealing with the people aspect of change to achieve the business outcome required.

A

Change Management

47
Q

The amount of money going in and out of a business.

A

Cash Flow

48
Q

Analysis using data from financial statements to identify and monitor trends in performance, for example, profitability, liquidity and debt.

A

Financial Ratios

49
Q

A finanical ratio which identifies a business’s ability to generate profit from the captial used.

A

Return on Capital Employed

50
Q

A process designed to assess and calculate all costs associated with producing or delivering a product or service and arrive at a provable end cost.

A

Cost Model

51
Q

An adjustment made to a set of financial accounts to reflect activity that has occurred but for which cash has not yet been received or paid.

A

Accrual

52
Q

a written statement of the purpose of an organisation which does not change over time.

A

Mission Statement

53
Q

Sets out the rules and goals by which the organisation will conduct its affairs in order to acheive its mission.

A

Vision Statement

54
Q

A method of budgeting in which every expense must be justified starting from a base of zero.

A

Zero-based Budget

55
Q

Closed Problems

A

These appear when something happens that should not have happened.

56
Q

Open- Ended Problems

A

These are where something is stopping the achievement of an objective or blocking progress.

57
Q

Defines roles and responsibilties: RACI Matrix

A

Responsible - Performs the task.
Accountable - Overall control, power to say yes or no
Consulted - Need feedback on project, some input
Informed - Need to know about decisions made for the project.

L4 M2 (7 decks)

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