Chapter 17 - Procurement of Materials

Question 0

Call-off

Answer 0

The part of the delivery plan furthest in time. It is normally considered as a clear order from the customer.

Question 1

Advanced shipment notice

Answer 1

A notification sent by the supplier to notify the customer that the delivery is on the way

Question 2

Customer-managed ordering

Answer 2

A customer/supplier ordering process in which the customer is responsible for entering customer orders directly into the supplier’s ERP system or web-shop.

Question 3

Delivery agreement

Answer 3

A delivery agreement may be drawn up in many different ways, but in general it is an agreement to purchase a certain minimun quantity of a specific item or group of items at a certain price during a certain period of time, normally six months or one year.

Question 4

Delivery precision

Answer 4

Delivery precision refers to the extent to which deliveries take place at the delivery dates agreed with the customer. While the efficiency measurement of stock service-level is intended to state the delivery capacity from stock, The delivery precision is intended as an expression of delivery capacity for companies with assemble-to-order, make-to-order and engineer-to-order type of operations.

Question 5

Delivery schedule

Answer 5

The required or agreed time or rate of delivery of goods or services purchsed for a future period.

Question 6

Electronic data interchange (EDI)

Answer 6

The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorisations, advanced shipment notices and invoices, using standardised document formats.

Question 7

Internet

Answer 7

A worldwide network of computers belonging to businesses, governments and universities that enables users to share information in the form of files and to send electronic messages and haveaccess to tremendous store of information.

Question 8

Material planning

Answer 8

The activities and techniques of determinig the desired level of items, whether raw materials, work in process, or finished products including order quantities and safe stock levels.

Question 9

Order acknowledgements

Answer 9

A message from a supplier to advise the customer that a purchase order has been received and accepted.

Question 10

Order-to-delivery process

Answer 10

From customer order received to invoice dispatch.

Question 11

Procurement

Answer 11

The business function of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection and salvage operations.

Question 12

Purchase item

Answer 12

An item sourced from a supplier

Question 13

Purchase order

Answer 13

The purchaser’s authorisation used to formalise a purchase transaktion with a supplier. A purchase order, when given to a supplier, should contain statements of the name, part number, quantity, description an price of the goods or services ordered; agreed-to terms as to payment, discounts, date of performance, and transportation; and all other agreements pertinent to the purchase and its execution by the supplier.

Question 14

Purchase requisition

Answer 14

An authorisation to the purchasig department to purchase specified materials in specified quantities within specified time.

Question 15

Quotation

Answer 15

A statement of price, terms of sale, and description of goods or services offered by a supplier to a prospective purchaser;a bid. When given in response to an enquiry, it is usually considered an offer to sell.

Question 16

Request for quotation

Answer 16

A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors.

Question 17

Supplier kanban

Answer 17

A move kanban is called supplier kanban when the supplying unit is an external supplier.

Question 18

Vendor-managed inventory (VMI)

Answer 18

A means of optimising supply chain performance in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. This activity is accomplished by a process in which resupply is done by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels. The vendor obtains a receipt for the restocked inventory anccordingly invoices the customer.