Q9-3 How Does the Procurement Process Work at CBI With SAP? Flashcards
How does SAP support the procurement process at CBI?
SAP supports the procurement process by automating tasks, reducing administrative time, and improving responsiveness to customers through integrated ERP systems that streamline purchasing, inventory management, and payment processes.
What competitive strategy did CBI adopt in its industry?
CBI adopted a differentiation strategy focused on high-end bikes and scooters, emphasizing responsiveness to retailers by quickly fulfilling orders and offering a wide range of products.
What are the five forces that determine industry structure according to Porter’s model?
Threat of substitutes
Threat of new entrants
Existing rivals
Bargaining power of suppliers
Bargaining power of customers
What is a purchase requisition (PR) in the SAP-supported procurement process?
A purchase requisition (PR) is an internal company document that issues a request for a purchase.
At CBI, this process is automated, and a PR is generated when raw material inventory goes below the reorder point.
How does the SAP-supported procurement process improve purchasing?
In the SAP-supported procurement process, the PR is automatically generated, and the Purchasing Manager converts it into a legally binding purchase order (PO) which is shared with approved suppliers.
What is a source list in SAP procurement?
A source list is a list of approved vendors in SAP, allowing CBI to improve purchasing control by limiting potential vendors to only those approved.
What information does the “Create Purchase Order” screen in SAP display?
The “Create Purchase Order” screen shows key details such as vendor name, item quantity, delivery date, net price, and company information like purchasing organization and group.
What steps does Maria, the purchasing manager, follow to create a purchase order in SAP?
Maria logs into SAP, navigates to the “Create Purchase Order” screen, inputs vendor and item data (e.g., quantity, delivery date, and price), and saves the purchase order, which generates a unique PO number.
How does SAP notify vendors after a purchase order is created?
SAP notifies the vendor, such as Space Bike Composites, through email, web service, or electronic message once a purchase order is saved and approved.
What is the next activity in CBI’s SAP-supported procurement process after the Purchase Order is sent?
The next activity is “Receive Goods,” where the shipment is received at the warehouse, and the Warehouse Manager inspects the contents and logs the receipt into the SAP system.
What does Wally, the Warehouse Manager, do when the shipment arrives?
Wally notes the Purchase Order number on the box, opens and inspects the contents, logs into SAP, and records the quantities received on the Goods Receipt screen.
What is the purpose of the Goods Receipt screen in SAP?
The Goods Receipt screen allows Wally to enter the quantities of goods received and store them in a specific location.
SAP then updates the inventory and records a debit to the raw materials inventory account.
What happens after Wally saves the goods receipt in SAP?
After Wally saves the goods receipt, SAP creates a document number for the receipt, updates the Raw Material Inventory table, posts a debit to the inventory account, and records the goods receipt in the Purchase Order record.
What is the next activity after receiving goods in the SAP-supported procurement process?
The next activity is “Receive Invoice,” where the Accountant (Ann) enters the invoice data into SAP, including the invoice date, amount, and Purchase Order number, which updates the accounting records.
What is the purpose of the Pay Supplier activity in SAP?
The Pay Supplier activity posts an outgoing payment to the supplier after ensuring a three-way match between the Purchase Order, goods receipt, and invoice.
