Lesson 1

Question 1

What is the first step in the strategic sourcing process?

Answer 1

Discovering Potential Suppliers

The ability to discover qualified and competent suppliers has increased exponentially with the introduction of the Internet.

Question 2

What follows after discovering potential suppliers in the strategic sourcing process?

Answer 2

Evaluating Potential Suppliers

This involves assessing each supplier individually after developing a comprehensive list.

Question 3

What is the purpose of developing suppliers in the strategic sourcing process?

Answer 3

To improve a supplier’s performance or capabilities to meet the buyer’s short- and long-term supply needs.

Question 4

What are key performance metrics used for in supplier management?

Answer 4

To help manage the suppliers effectively.

Question 5

What is another term for purchasing?

Answer 5

Procurement.

Question 6

What does sourcing encompass?

Answer 6

The entire set of business processes required to purchase goods and services.

Question 7

List three benefits of effective sourcing.

Answer 7

• Reduction in the overall cost of purchasing
• Design collaboration resulting in easier-to-manufacture products
• Appropriate supplier contracts allowing for risk sharing.

Question 8

What is capacity aggregation?

Answer 8

Surplus created by aggregating demand across multiple firms to gain production economies of scale.

Question 9

True or False: Procurement aggregation can create surplus for a third party.

Answer 9

True.

Question 10

What factor dictates the amount of inventory required?

Answer 10

Replenishment lead time.

Question 11

Fill in the blank: Supplier development is any activity undertaken by a buyer to improve a supplier’s _______.

Answer 11

performance or capabilities.

Question 12

What is a significant challenge faced by Grand View Hotel in its procurement processes?

Answer 12

Managing a vast array of supplies, ingredients, and services while balancing cost control, quality, and sustainability.

Question 13

What is one strategy for improving purchasing at Grand View Hotel?

Answer 13

Implement a rigorous supplier evaluation process.

Question 14

What does JIT stand for in purchasing practices?

Answer 14

Just-in-Time.

Question 15

What should be established to improve the selection of ingredients and suppliers at Grand View Hotel?

Answer 15

Feedback mechanisms from the kitchen and guests.

Question 16

When did corporate purchasing begin to integrate more with material systems?

Answer 16

Late 1960s and 1970s.

Question 17

What is the primary role of supply chain management?

Answer 17

To ensure goods, services, or products get to customers in the easiest way possible.

Question 18

List two roles and responsibilities in supply chain management.

Answer 18

• Increase customer service
• Reduce production cost.

Question 19

What is one reason why the importance of purchasing increased during the early 1990s?

Answer 19

Value Proposition in purchasing increased.

Question 20

What is one way to enhance the quality of products in supply chain management?

Answer 20

By responding to customer requests and high competitive market conditions.

Question 21

What is the purchasing process described as?

Answer 21

A highly complex organizational process with objectives beyond obtaining goods and services.