MNP2601 ASSIGNMENT 06 ANSWERS- 2023 DUE 17 OCT 2023
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Course
Purchasing Management (MNP2601)
Institution
University Of South Africa (Unisa)
This document has x2 attempts of 18 multiple-choice questions and answers. The final assignment also has calculations which are included here. ALL THE BEST!
Question 1
Question text
When using the profitability index (PI) as quantitative assessment method when deciding on
capital equipment, if PI ˃ 1 it means that the investment must be accepted.
Select one:
True
False
Question 2
Question text
Capital procurement is the fastest-growing sector in business today.
Select one:
True
False
Question 3
Question text
In modern organisations, the expertise of the purchasing and supply function is needed when
buying professional (i.e. high cost and high risk) services to ensure that the best value is realised.
Select one:
True
False
Question 4
Question text
Which one of the following options is a determinant factor in the number of personnel involved
in the purchasing of capital equipment?
Mode of transport used
Risk associated with the purchase ????
Geographical location of marketers
Size of supplier warehouse
Question 5
Question text
When an organisation has a short term (for example, one year) need for particular capital
equipment it will most probably …
lease it by means of a financial lease.
buy it on hire purchase.
purchase used equipment.
lease it by means of an operating lease.
,Question 6
Question text
The decision on what vehicles to purchase was previously left to the marketing manager of an
innovative organisation as he is a car enthusiast with vast knowledge about vehicles in general as
well as vehicle manufacturer capabilities. Given that this innovative organisation has a very
limited fleet and is only looking to purchase a couple of vehicles, is this approach suitable?
No, the purchasing and supply function should be the only department making decisions
related to the purchase of capital equipment.
No, owning to the complex nature of purchasing capital equipment, a capital equipment task
team needs to be formed.
No, the marketing manager would likely make a decision that is against the best financial
interest of the organisation and only considers product quality.
Yes, the individual with the most technical knowledge in the organisation should be
making the purchasing decision.
Question 7
Question text
An online grocer has decided to go into partnership with a new local courier company for
delivering goods in larger quantities to local orphanages. Many potential courier service providers
can be approached and eventually contracted. Which one of the following could be expected to
the biggest challenge for the grocer in purchasing courier services?
Have a compliance policy related to the contract with the courier
Allocate resources to purchasing and supply management relative to the importance of
courier services buying
Develop a performance measurement system for courier service delivery
Develop a relationship with the courier service provider
Question 8
Question text
Uber is delivering a range of items, not only food takeaways. To load bigger items, Uber invested
in a conveyor machine to load the items. Which one of the following options is the correct
payback period for the conveyor machine that cost Uber R360 000, with net cash flow after
operating costs and expenses have been deducted at R100 000?
3.6 years
R260 000 per annum
36 months
36 years
Question 9
Question text
Woolworths strives to have home, fashion and beauty products readily available to customers;
therefore, replenishments to retail stores are made on a regular basis, considering customers’
demand. Which one of the following would be a primary activity performed within Woolworths’
value chain?
, Contracting sustainable suppliers who can deliver on time to shorten lead time
Ordering items on time from suppliers to avoid stock-outs
Appointing multilingual customer service managers to enhance service levels
Recording valuable information on consumers’ needs
Question 10
Question text
What makes negotiating for better prices more challenging in a monopolistic market?
suppliers differentiate products through better service
lower-priced products might be of inferior quality
price differences between suppliers can be exploited
substitute products or services are hard to find
Question 11
Question text
During the Covid-19 pandemic, Woolworths and other retailers, had to adhere to strict safety and
hygiene regulations imposed by government. What type of risk did these regulations impose on
Woolworths?
core business risk
people risk
operational risk
external downside risk
Question 12
Question text
The following principle should be kept in mind when evaluating purchasing and supply
performance:
A sound database with information on only a few purchasing and supply activities is
necessary to evaluate performance.
Quantitative measures give the best and most accurate indication of purchasing and supply
performance.
No generic evaluation system is available to evaluate purchasing and supply performance.
As long as the benefits equal the costs, the evaluation system for evaluating purchasing and
supply performance is effective.
Question 13
Question text
Suppose an organisation decides to outsource the reverse logistics process to be performed when
recalling products. In which phase of the outsourcing process would they be if they debate the
rationale for outsourcing to a suitable supplier by considering their focus on their core
competencies and on either cost-efficiency or service delivery?
Question 14
Question text
An example of internal service quality in a public sector institution would be the following:
A municipality’s purchasing and supply team has an obligation towards the different
municipality departments to contract the most cost-effective supplier.
An outside group is awarded a contract based on political connections and not by following
regular tender processes.
An outside contractor is able to provide municipal services at affordable rated in many
villages.
An outside contractor is dismissed due to tax certificates not issued by South African
Revenue Services (SARS).
Question 15
Question text
When considering warehouse space (whether for renting or buying), organisations are actively
looking for value offerings, referring not only to a building but a greener building with solar
panels on the roof. You are appointed on the capital equipment task team of an organisation who
recently installed solar panels to supplement Eskom power. To ensure payment to the provider,
the accounting department needs to allocate the expense correctly according to its description and
usage. Which option best describes the classification of solar panels?
Green or accessory capital equipment, as solar panels are categorised as part of “green
funding” at financial institutions.
Single-purpose equipment, as solar panels can do one operation (or several similar
operations).
Operating equipment, as no organisation can trade without power supply.
Green capital fittings, as solar panels are semi-permanent structures.
Question 16
“The Russian war in Ukraine and the harsh Covid-19 shutdown in many industrial Chinese cities
has amplified supply chain vulnerabilities to such an extent that in March 2022, only 7% of sea
shipments from Asia to North America arrived on time, while 6% were on time for the Asia-to-
Europe route”.
What key variable should an organisation consider the most when deciding on a transporter for
their items, knowing that there is a war in Ukraine and their shipments might not arrive on time?
Any transporter will suffice if only the items arrive, because during a war, no one can
dictate.
The organisation must ensure that they have accessibility to the supplier to load their
items in the Ukraine.
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