Chapters 1 & 2

Question 1

Seven Rights of Purchasing

Answer 1

Obtaining the right material
In the right quantity
For delivery to the right place
At the right time
From the right supplier
With the right service

Question 2

Percentage of COGS

Answer 2

50%-80% for manufacturing
30%-40% for service

Question 3

Profit Leverage Effect

Answer 3

$1/profit margin % = $ impact to bottom line for every dollar purchasing saves

Question 4

Reverse Profit Leverage Effect

Answer 4

$ saved by purchasing/profit margin % = $ needed to sell by marketing to equal impact

Question 5

Return on Assets

Answer 5

Profit Margin % * Asset Turnover (Sales/Total Assets)

Question 6

Purchasing Process

Answer 6

Need Communication
Supplier Selection
Transaction Management
Relationship Management