SCMN 3730 Exam 2 Questions and Answers with Verified Solutions Graded A 2024
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Module
SCMN 3730
Institution
SCMN 3730
What are the primary steps in the strategic souring process? -Correct Answer -Research & Analysis
-Initiative Planning
-Supplier Selection
-Contract Negotiation
What is the objective of the sourcing process? -Correct Answer To achieve the "lowest landed cost" position for a specified product ...
SCMN 3730 Exam 2 Questions and Answers with
Verified Solutions Graded A 2024
What are the primary steps in the strategic souring process? -Correct Answer ✔-
Research & Analysis
-Initiative Planning
-Supplier Selection
-Contract Negotiation
What is the objective of the sourcing process? -Correct Answer ✔To achieve the
"lowest landed cost" position for a specified product quality, quantity, and terms &
conditions
direct vs. indirect purchases -Correct Answer ✔-Direct = Goes into final product
(Wheels on a car)
~ raw materials, semi-finished products, finished products
-Indirect = Does not go into final product (Case for a phone)
~ Admin, EHS, Factory/Equipment, IT, etc
When developing an AS-IS spend company profile, what is meant by the analysis terms
of number of contracts, contract coverage and compliance? -Correct Answer ✔AS-IS =
how things are right now, how much you are currently spending vs where you want to
be in the future
-# of contracts = contracts in place (existing obligations)
-Contract coverage = scope? size? (local/regional/global)
-Contract compliance = contracts being utilized well
slide 24
When developing a corporate AS-IS spend profile, how is a total spend vs. business
importance quadrant analysis used in evaluating sourcing categories management? -
Correct Answer ✔total spend - how much did we spend on the goods?
What are the characteristics / value added benefits to each total spend vs. business
importance quadrant? -Correct Answer ✔
How are SWOT and 5-Forces business tools used in developing a strategic sourcing
strategy? -Correct Answer ✔Have to ensure you have the capabilities and strengths to
strategically source; tells you what others are doing too
3. Buyer Bargaining Power
4. Threat of New Entrants
5. Market Competition
What marketplace conditions exist to form a monopoly /oligopoly? -Correct Answer ✔-
Monopoly = government allows, little to no competition, one supplier
-Oligopoly = few sellers (actions affect prices and competitors)
What is a competitive market structure? What constitutes a buyer's and a seller's
market? -Correct Answer ✔-Competitive market structure = monopoly, oligopoly, perfect
competition
-Buyer's market = Supply > Demand: pricing will go down
-Seller's market = Demand > Supply: pricing will go up
What conclusions can be drawn from the "Top 10 CPO Goals" survey? -Correct Answer
✔Implemented cost saving and ROI are most important factors
What is a strategy; how is strategy applied to the sourcing process? -Correct Answer ✔-
Strategy = a plan of action designed to achieve a goal; an elaborate and systematic
plan of action
>Align purchase objectives to marketplace needs
>Develop goals to meet business needs
>Maximize corporate leverage to generate savings
>Include business operations (clients) in decision-making
What are the four opportunities for procurement to impact the income statement's
"bottom line"? -Correct Answer ✔Operating Costs
-Negotiate contract with lower pricing
-Implement cost reduction in supply chain
-Reduce purchased volumes
-Reduce P2P operation costs; increase efficiency
What are the two opportunities for procurement to positively impact the balance sheet? -
Correct Answer ✔-Reduce inventory investment
-Increase days payable
-Inventory investment; increase inv. turns
-Days-payable outstanding; increase cash
-Fixed asset mgt; tooling and equipment
What are the key value drivers for each quadrant strategy? For each quadrant, how
does procurement drive savings (strategy) to the "bottom line"? -Correct Answer ✔-
Tactical: not critical to business (best price wins); try to automate
-Leverage: not critical but a lot of money involved (contract with few suppliers to gain
improved pricing structure); continuous improvement
SCMN 3730 Exam 2
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