Test bank For Purchasing & Supply
Chain Management 6th Edition by
Bowersox
Why are more top managers recognizing the importance of purchasing/supply management? -
ANSSCM improves relationship building and innovation, improves reputation, time, competitive
advantages, and operating cost of company.
What is the difference between purchasing and supply management? What is the difference
between supply chain orientation and supply chain management? - ANSPurchasing
management is a functional group, it maximizes the organization and is a process of managing
purchase functions. Supply management is a process of managing resources, its the present
and future needs of the company, strategic/cross functional approach of nature. Supply chain
orientation is the managing of operating activities. SCM is the managing the flow of the goods.
What is the difference between supply chain and value chain? - ANSSupply chain is the process
of transfers material information from one place to another, packaging and marketing not
required, organizational orientated. Value Chain creates a value and competitive advantage for
company, storage and transportation not required, involved packaging and marketing and is
customer orientated.
Do you think organizational purchasers should behave like entrepreneurs? - ANSOrganizational
purchasers should behave like entrepreneurs to enhance company profit margins and growth
because of the responsibility for profit and loss of business.
What are some of the factors which might influence how important purchasing is to the success
of the business? - ANSQuality of good and service, availability of resource, availability of
alternative resource, level of competition.
What knowledge and skills are required for a purchasing professional? - ANSknowledge of
supplier and company, purchasing strategies, time management to be efficient, negotiation skills
for prices.
Why does the collective behavior of supply managers have such an impact on economic
trends? - ANSIf similar goods are ordered the price will be affected. Since supply managers
have control of the price they have control of economic trends.
, Why are supply base innovation and risk management two future area that will consume more
of the supply managers day? - ANSThey are challenging tasks which require detailed planning
and time.
What are 4 enablers of purchasing and supply excellence? - ANSHuman Resources,
organizational design, information technology, measurement.
How can an effective purchasing department affect organization appearance? - ANSoptimal
amount of purchasing will increase bargaining power which will reduce cost, reduces defective
goods, maintains minimal inventory.
Who are purchasing internal customers? - ANSThe employees of the organization and internal
users of the product.
Discuss the contributions a purchasing department can make to the corporate strategic planning
process. - ANSprocurement of materials, price evaluation, compliance of policy.
List the areas that are typically within purchasing span of control. - ANSSpend Analysis,
demand management and specifications, category management, contract management, cost
management and supplier management.
Describe how purchasing becomes aware of purchasing requirements? - ANSQuality
guarantee, reasonable pricing, on-time delivery, safety, maintenance and service.
How is anticipating a requirement or a need through purchasers involvement on new product
development different than reacting to a purchase need? - ANSAnticipating a material
requirement will increase cycle time, better evaluation of suppliers. When a firm is required to
decrease cycle time it would help analyze and fulfill requirements of purchasing.
Why do firms no longer rely on competitive bidding when awarding purchase contracts? -
ANSless suppliers in market, requires early procurement materials, cannot determine risks and
costs.
List documents which are covered by E-procurement tools. - ANSProper purchasing document,
cost free document, other supporting documents.
What are the advantages/disadvantages of E-Procurement tools? - ANSAdvantage: No
paperwork, time reduction, error reduction, communication improvement, reductions in costs.
Disadvantage: push back from users, frictions and resistance, communication gap.
Why is it important to measure and monitor supplier performance improvement? - ANSensure
performance initiatives, manage purchasing of good and services, identify opportunities and
purchasing trends, support future purchasing decisions.