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Supply Chain Management > Test 5 Blueprint > Flashcards

Test 5 Blueprint Flashcards

1
Q

What is the business function responsible for all activities and processes required to purchase goods and services from suppliers

A

Sourcing

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2
Q

The process of buying goods and services

A

Purchasing

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3
Q

What term goes beyond focusing on just the price of goods and considers a strategic and future-oriented perspective

A

Strategic Sourcing / Supply Management

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4
Q

Evolution of the Sourcing Function pre-WWII mostly clerical in nature then transitioning from a mere buying function to being responsible for cultivating suppliers and ensuring adequate and continuous supply. (Shortage of materials realized during WWII led to this transition! We talked about one example: the shortage of rubber in class.)

A

Just memorize

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5
Q

What type of sourcing has a limited number of potential suppliers and larger volumes, specialized needs lead to more opportunity to negotiate

A

Commercial

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6
Q

What type of sourcing has many suppliers of common items. Buyers are typically final customers and buyer is a small portion of supplier’s total business. Buyer has little ability to negotiate price

A

Consumer

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7
Q

Which sourcing function acquires the right material and services and making sure they are available to all parts of the organization in the right quantities, right price and right time

A

Commercial Sourcing Primary Function

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8
Q

What are the 5 impacts on the organization and the supply chain

A

Operational impact
Financial impact
Strategic impact
Risk Mitigation
Information impact

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9
Q

Which organization impact ensures the right materials, right quantities, right place, and right time and strikes an optimal balance of inventory
- Shortage= disruption
- Excess=tied-up capital and financial losses

A

Operational Impact

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10
Q

Which organization impact ensures sourcing spends 50% - 90% of revenue in most manufacturing
organizations and ensures large sums of money

A

Financial Impact

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11
Q

Which organization impact supports organization’s strategic direction (business strategy –competitive priorities and matching criteria when selecting
suppliers)

A

Strategic Impact

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12
Q

Which organization impact minimizes supply disruptions and protects reputation? This impact also ensures suppliers meet performance standards and evaluates suppliers on a longer-term source of supply

A

Risk Mitigation

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13
Q

Which organization impact will continually collect information on prices, suppliers, goods, new products and tech

A

Information Impact

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14
Q

What is responsible for acquiring goods and services, ranging from identifying potential suppliers to negotiating and awarding contracts and ensuring those contracts standards are met

A

Sourcing Function

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15
Q

What part of the sourcing process involves identifying potential suppliers and solicits business from potential suppliers by sharing a RFQ, RFP, or RFI

A

Supplier Selection

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16
Q

When potential suppliers solicit a business by sharing a specific document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors. What document are they using?

A

Request for Quotation (RFQ)

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17
Q

When potential suppliers solicit a business by sharing a specific used to solicit vendor responses when the functional requirements
and features are known but no specific product is in mind. What document are they using?

A

Request for Proposal (RFP)

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18
Q

When potential suppliers solicit a business by sharing an inquiry to a potential supplier about that supplier’s product or service for potential use in the business. The inquiry can provide certain business
requirements or be of a more general exploratory nature. What document are they using?

A

Request for Information (RFI)

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19
Q

What organizational functions do sourcing teams have to consider in from?

A

Engineering
Operations
Marketing

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20
Q

Which organization function must assess tolerance specification requirements for purchased parts

A

Engineering

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21
Q

What organization function must determine which sourcing choice is preferred given the current production process

A

Operations

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22
Q

What organizational function must understand if product changes influenced by sourcing selection will impact sales

A

Marketing

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23
Q

Define the term: the sum of all costs incurred to produce the product

A

Cost

24
Q

Define the term: the amount at which the product us being sold in the marketplace

A

Price

25
Q

What is the Total Cost formula

A

F (fixed cost) + V( variable cost) * Q( number of units sold)

26
Q

Define the term: purchase price plus all other costs associated with acquiring the item

A

Total Cost of Ownership (TCO)

27
Q

T/F- TCO is determined by adding the other “associated costs” like the cost of transportation to the Price

A

True

28
Q

What are two different methods used to reach agreement and develop contracts with potential suppliers

A

Bidding and Negotiation

29
Q

When suppliers offer a competitive price to win contracts from buyers and the product is standardized( not customized) and qualified supplies are plentiful. This is an example of

A

Bidding

30
Q

The process of gaining concessions from another party; a cooperative process, typically few suppliers exist, suppliers customize product to buyer, product is new or technically complex

A

Negotiation

31
Q

What products can be described as satisfying basic functions or needs, i.e. food, gas, batteries, etc

A

Functional

32
Q

What products are purchased for status such as high fashion or tech

A

Innovative

33
Q

When product demand is unstable and difficult to predict

A

Demand Uncertainty

34
Q

When there is uncertainty regarding the sources of supply and their capabilities

A

Supply Uncertainty

35
Q

What product falls under these characteristics stable and predictable demand, long life cycles, supply chain is easier to manage BUT they have low profit margins

A

Functional Products

36
Q

What product falls under these characteristics highly unpredictable demand (this makes forecasting difficult), short life cycles, supply chain is difficult to manage BUT they have higher profit margins

A

Innovative Products

37
Q

Demand uncertainty and Supply uncertainty are related to the type of product and their supply chain

A

Demand uncertainty involves functional and innovative products

Supply Uncertainty involves low supply uncertainty and high supply uncertainty

38
Q

Sources of supply are well established, manufacturing processes are mature, underlying technology is stable this is known as

A

Low supply uncertainty (stable process)

39
Q

When sources of supply are rapidly changing this is known as

A

High supply uncertainty (evolving process)

40
Q

Which form of sourcing is becoming the norm?

A

Single Sourcing

41
Q

The benefits of this form of sourcing builds closer relationships and cooperation. It reduces costs via volume discount, improved quality, lowers freight costs, is easier for scheduling deliveries, and the supplier may be more cooperative in general knowing they are the only supplier

A

Single Sourcing

42
Q

The drawbacks of this form of sourcing are risky! The buyer may use majority of supplier capacity and may not want to be tied to a supplier that is highly dependent on them. Buyer is vulnerable should there be a supply disruption (fire, tsunami, labor strike, etc.)

A

Single Sourcing

43
Q

The benefits of this form of sourcing was originally believed to increase cost competition (drive down prices) and ensure supply security

A

Multiple Sourcing

44
Q

The drawbacks of this form of sourcing focus on competitive bidding vs. building closer relationships, could drive higher cost due to lack of volume consolidation

A

Multiple Sourcing

45
Q

Define the term: choosing a third party, such as an outside supplier or vendor, to perform a task, function, or process to incur business benefits

A

Outsourcing

46
Q

What are 3 benefits of outsourcing?

A

Lower costs
Access to technical skills
Ability to free themselves of doing noncore activities

47
Q

What are the two key dimensions of outsourcing

A

Scope and Criticality

48
Q

This dimension of outsourcing is the degree of responsibility assigned to the supplier

A

Scope

49
Q

The dimension of outsourcing that focuses on the importance of the outsourced activity/ task to the organization

A

Criticality

50
Q

The use of internet technology to conduct auctions as a means of selecting suppliers and determining aspects of the purchase contracts can be described as

A

E-Auctions

51
Q

What is another tool for sourcing managers to use when selecting suppliers

A

E-Auctions

52
Q

What are the 3 common performance measures that are used to measure the performance of the sourcing function

A

Inventory turnover
Weeks of Supply
Cash to Cash Cycle

53
Q

A measure of how quickly inventory moves can be described as

A

Inventory Turnover

54
Q

Tells a manager how long the current on hand inventory will last based on current demand can be described as

A

Weeks of Supply

55
Q

Ellis Enterprises is a world class manufacturer of automobile audio systems. Ellis Enterprises employs highly specialized production processes and as a result they have inventory throughout. They have $2,725,000 in raw material inventory, $1,152,000 in work in process inventory, and $3,225,000 in finished goods inventory on average. Ellis Enterprises sales for the most recent year was about $25 million. What is the inventory turnover for Ellis Enterprises?

A

Inventory turnover = COGS/Avg Inventory Value
=$25,000,000/($2,725,000+$1,152,000+$3,225,000)
=$25,000,000/$7,102,000
=3.52 turns

56
Q

Walmart, Inc. reported an average inventory value of $44,435,000,000 in their January 31, 2020 report. For the same period they reported a Cost of Revenue valued at $394,605,000,000 and Total Revenue valued at $523,964,000,000. What is their inventory turnover?

A

Inventory turnover = COGS/Avg Inventory Value
=$394,605,000,000/$44,435,000,000
=8.88 turns

57
Q

Do 3,4, and 5 on the homework

A

Supply Chain Management (11 decks)

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