lecture 5 Flashcards
what are commodity strategies used for?
To define strategies for products which are alike, since different situations require different approaches
What are the profit impact and supply risk for leverage items?
They have a high profit impact and low supply risk?
What is an item that has high supply risk and high profit impacts?
strategic items
What are strategic items?
they are items that are critical to profitability and operations, there are few qualified sources for supply for it, and their design and quality are critical
What are routine items?
Are items that have many alternatives to it, have many sources of suppliers and possess low value
What are items that are limited in suppliers and cheap? why?
bottleneck items, they have few alternatives for suppliers, are of new technology and is production based scarcity
What are the shortcomings for the Kraljics matrix?
does not take into consideration the suppliers and so making a strategic decision without their side is not recommended
What is the ABC analysis?
where firms categorize items based on their significance, A are most important items, B medium importance and C less importance
What is a disadvantage of the ABC analysis?
does not take into account supply market risk and product uncertainty
What are 3 ways to avoid supply risk?
standardization of the material group, check the number of suppliers available (the high the lower the risk)
What are framework contracts?
are contract designed for repeated use during a certain time period and is accompanied by one or more detailed agreements
Why is framework contracts applicable for routine items?
it limits the process cost and makes so there is less work involved as there is not much need for maintenance
Why is framework contracts applicable for leverage items?
firms can get better conditions through purchasing bundles
Items you can have a strategic alliance through purchasing bundles is …? (framework contract)
Bottleneck items
What is CSR and what is it for?
corporate social responsibility and is for firms to give back to the community and add positive value to social issues
