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CIPS L4M1 > Definitions > Flashcards

Definitions Flashcards

1
Q

Procurement

A

Process of acquiring goods and services the company requires

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2
Q

Supply Chain Management

A

The extensive infrastructure needed to get the goods

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3
Q

Inter-business Relationships

A

Chain of commercial relationships

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4
Q

Supply

A

infrastructure which ensures products or services get from the supplier to the customer

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5
Q

Purchasing

A

The act of physically ordering or buying something

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6
Q

Fixed Costs

A

costs which do not change with the output of the company (must be paid independent of output of the company)

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7
Q

Direct Costs

A

Costs associated directly with the project/job/contract

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8
Q

Indirect Costs

A

Costs not directly associated with a project/job/contract

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9
Q

Variable Costs

A

Costs which change with the output of the organisation (rise as production increases)

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10
Q

Elements of Procurement

A
  1. Added Value
  2. Purchasing
  3. Inventory
  4. Waste Management
  5. Logistics
  6. Supply
  7. Cost
  8. Quality
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11
Q

Waste Management

A

Movement of waste from its inception to its final disposal

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12
Q

Primary Materials

A

Raw materials

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13
Q

Secondary Materials

A

Manufactured materials

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14
Q

Tertiary Sector

A

Provide Services

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15
Q

Stock Procurement

A

1- Primary Materials
2-Secondary Materials
3- Finished Product- stock for retail industry resale

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16
Q

Direct Procurement

A

Purchasing of large quantities of raw materials needed for production to produce product for customers

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17
Q

Indirect Procurement

A

Services and tools that do not form part of final product but required to maintain the business and production process

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18
Q

Non-Stock Procurement

A

Not on inventory, can be intangible goods. Belongs to tertiary sector; commercial services used to help run business.

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19
Q

Economies of scale

A

The trend of cost per unit decreasing as output increases and cost of tooling being shared amongst larger number of units.

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20
Q

Organisational budget

A

Monitors income and expenditure

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21
Q

Operational budget/expenditure

A

cost associated with running a business e.g. raw materials, rent, salary, transport

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22
Q

CAPEX

A

Budget relating to capital expenditure including capital purchases

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23
Q

OPEX

A

Budget relating to operational expenditure

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24
Q

Capital Purchases

A

Relate to assets of an organisation purchased to help a business develop, make money and keep with market trends

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25
Q

Supply Chain

A

How the goods transform from raw materials to end user, including all activities and organisations associated

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26
Q

Upstream

A

Getting raw materials needed for production

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27
Q

Downstream

A

Processing raw materials into finished product

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28
Q

Supply chain management

A

Aims to reduce costs, improve value and reduce risk. Gives a competitive advantage over competition by adding value through the process and achieving it in the most effective, efficient and ethical way. Also involves managing customer relationships

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29
Q

Procurement v Supply Chain Management

A

Procurement ends from the point of delivery of the goods/services; SCM continues until the end consumer receives the product.

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30
Q

Complex Supply Chains

A

Tiers of suppliers; the lower the number, the closer to buyer

31
Q

Logistics

A

The process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods, including services and related info, from the point of origin to the point of consumption for the purpose of conforming to customer requirements. (Control of flow of goods/services between 2 points)

32
Q

Materials Management

A

the handling, storage, inspection and issuing of raw materials, components and finished goods

33
Q

Material Requirement Planning

A

Materials and production planning system used in manufacturing environments- it can schedule orders, monitor inventory and manage production process

34
Q

Enterprise Resource Planning

A

Includes more functions than MRP e.g. accounting, SCM, CRM, Manufacturing, Procurement management and materials management

35
Q

Total Cost Ownership

A

total cost incurred by owning a product throughout its useful life

36
Q

Total Cost of Acquisition

A

Total cost of acquiring a product from sourcing to receiving and installing. (Budget needed to get product onsite)

37
Q

Internal Suppliers

A

linked by working either on same site or for same company

38
Q

External Suppliers

A

Separate business entities from buying organisation

39
Q

KPIs

A

Values that can be measured or monitored to assess levels of achievement

40
Q

Supplier relationship management

A

Process for identifying all interactions with key suppliers and then managing them in a way that increases value from relationship for both parties

41
Q

Tangible

A

Physical existence
Depreciate
Easier to liquidate
Cost can be easily determines

42
Q

Intangible

A

No physical existence
Amortised
Not easy to liquidate and sell
Cost harder to determine e.g. software

43
Q

Stakeholders

A

Any individuals or groups of individuals that have an interest in an organisation. They have an affect or are affected by the achievement of an organisations objectives

44
Q

External stakeholders

A

Individuals outside the organisation who have an interest in the organisation and either impacted by it or could impact it

45
Q

Internal stakeholders

A

People involved directly in the business e.g. directors

46
Q

Service level agreement

A

An agreement between a supplier and a buyer based on quality, delivery, availability and other measurable criteria

47
Q

Incoterms

A 
Ex works
Free carrier
Carriage Paid To
Carriage and insurance paid to
Delivered at terminal
48
Q

Fisher v Bell

A

Invitation to treat is not an offer

49
Q

Felthouse v Brindley

A

Silence does not constitute acceptance

50
Q

Contractual relationship

A 
Consideration
Intent to create legal relations
Authority to sign 
2 parties
Offer & acceptance
51
Q

Value

A

Extent to which a produce or service supplied to a customer or consumer meets their requirements

52
Q

Requisitioning

A

Demand the supply of something by official order

53
Q

Reverse auction

A

An auction in which sellers are bidding to sell services (reduce sale price)

54
Q

E-auction

A

Auction between buyer and seller on an electronic platform

55
Q

Electronic Data Interchange (EDI)

A

Electronic exchange of documents in an agreed format between organisations.

56
Q

When does a conflict of interest arise?

A

When a person’s involvement within a business includes multiple interests which could influence and lead to preferential treatment

57
Q

Ethics

A

Set of rules which govern behaviour of a person.

Moral principles influenced by professions

58
Q

Actual conflict of interest

A

If decision affects them personally

59
Q

Perceived conflict of interest

A

Procurement person has personal interests which could influence the process

60
Q

Policy

A

Part of an organisations strategic plan and contains info on how a business will conduct itself and its business activities

61
Q

Procedure

A

How a policy is delivered

62
Q

Organisational Accountability

A

All members of business working together and independently to achieve objectives defined through policies and procedures

63
Q

Step change

A

Unfreeze —> change —> referees

64
Q

Incremental change

A

Constant reaction to events - less problematic as it is a gradual change

65
Q

Centralised structure

A

Activities carried out at 1 central location

66
Q

Devolved procurement

A

Procurement carried out by location or departments

67
Q

Hybrid structures

A

Combo centralised and decentralised

68
Q

Consortium structures

A

When similar organisations or organisations with same needs collaborate for their mutual benefit

69
Q

Sector

A

A classification given to an area of industry, society or the economy to distinguish it from other areas

70
Q

Economic classifications

A

How they were funded, objective and policy

71
Q

Name the economic sectors

A

Public
Private
Third Sector

72
Q

Compliance

A

adhering to regulations, following legislation and conforming to rules.

73
Q

Sustainability

A

(1) Supplier is performing well and likely to be in existence for foreseeable future
(2) Environmentally aware and replacing natural resources used

74
Q

Corporate Governance

A

the system of standards, procedures and policies by which an organisation is controlled

CIPS L4M1 (1 decks)

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