Lecture 3

Question 1

Strategic sourcing

Answer 1

The development and management of supplier relationship to acquire goods and services in a way that aids in achieving the immediate needs of the business

Question 2

Specifity

Answer 2

Refers to how common the item is and how many substitutes available

Question 3

Request for proposal (RFP) When used?

Answer 3

Used for purchasing items that are complex or expensive

Question 4

Vendor managed inventory

Answer 4

when a customer actually allows the supplier to manage the inventory policy for an item or group of items

Question 5

Bullwhip effect

Answer 5

A supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels

Question 6

Continuous Replenishment

Answer 6

Inventory is replaced frequently,
as part of an ongoing process to reduce variability

Question 7

Stable supply process

Answer 7

Manufacturing process and underlying technology are mature and supply base is well established, it is not changing anymore (e.g. Functional products)

Question 8

Evolving supply process

Answer 8

Manufacturing process and underlying technology are still under early development and are rapidly changing (e.g. Innovative products)

Question 9

Efficient supply chain strategy

Answer 9

Utilize strategies aimed at creating the highest cost efficiency

Question 10

Risk Hedging supply chain strategy

Answer 10

Utilize strategies aimed at pooling and sharing resources in a supply chain to share risk

Question 11

Responsive supply chain strategy

Answer 11

Utilize strategies aimed at being responsive and flexible

Question 12

Agile supply chain strategy

Answer 12

Utilize strategies aimed at being responsive and flexible to customer needs

Question 13

Financial reasons to Outsource

Answer 13

1. Improve return on assets
2. Generate cash by selling low-return entities
3. Gain access to new markets
4. Reduce costs through lower cost systems
5. Turn fixed costs into variable costs

Question 14

Improvement reasons to Outsource

Answer 14

1. Improve quality and productivity
2. Shorten cycle time
3. Obtain expertise, skills and technologies that are otherwise unavailable
4. Improve risk management
5. Improve credibility and image by associating with superior providers

Question 15

Organizational reasons to Outsource

Answer 15

1. Improve effectiveness by focusing on what the firm does best
2. Increase flexibility to meet changing demand for products and services
3. Increase product and service value by improving respons to customer needs

Question 16

Logistics

Answer 16

Management functions that support the complete cycle of material flow. (All about moving the products within the supply chain.)

Question 17

Green sourcing

Answer 17

The awareness of firms to be environmental responsible in order to deliver “green results” with their supply chain.

Question 18

Green Sourcing Six-Step Process

Answer 18

1. Assess the opportunity
2. Engage sourcing agents
3. Assess the supply base
4. Develop the sourcing strategy
5. Implement sourcing strategy
6. Institutionalize the sourcing strategy

Question 19

Total Cost of Ownership (TCO)

Answer 19

An estimate of the cost of an item that includes all the costs related to the procurement and use of an item