Chapter 2

Question 0

How do you calculate inventory turnover?

Answer 0

annual sales (at cost) / average aggregate inventory value

tells you the rate this inventory is consumed

Question 1

how do you calculate weeks of supply?

Answer 1

average aggregate inventory value / weekly sales (at cost)

tells you how many weeks of supply you has

Question 2

nested processes: SOURCING

explain

Answer 2

• the eyes as ears of the org in the supplier marketplace
• seeks better value from suppliers
• do: selection, supplier certification, competitive orientation, cooperative orientation.

Question 3

Purchasing types?

Answer 3

1. electronic data interchange (EDI)
   -enables transfer of routine, standardized business docs from comp to comp.
2. catalog hubs
   -system where suppliers post catalog of items on the Internet and buyers select and buy electronically
3. exchange
   -electronic marketplace where buyers and sellers come together to do bus.
4. auction
   marketplace where firms place competitive bids to buy something

Question 4

centralized vs localized purchasing means what? does what?

Answer 4

when an org has several divisions, it must decide to buy centrally or locally.

centralized buying gives better savings, ensures long supply relationships, but loses local control.

best answer is centralized buying with local autonomy.

Question 5

what is customer demand planning?

Answer 5

facilitated the collaboration of a supplier and it’s customers to more accurately forecast customer requirements for product.

it’s a business planning process that enables sales teams to develop dans forecasts as well as other planning.

Question 6

What is outsourcing?

Answer 6

paying suppliers and distributors to perform certain activities.

make or buy decision. make in house or buy?

backward integration. move towards the source of materials?

forward integration. move downstream towards warehouses and retail stores?