Summary Purchasing & Supply Chain
Management ,Revised ,Verified ,With
Questions and Answers (Graded A+)
Why are more top managers recognizing the importance of purchasing/supply
management? - Correct Answer>>SCM 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? -
Correct Answer>>Purchasing 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? - Correct
Answer>>Supply 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? - Correct
Answer>>Organizational 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? - Correct Answer>>Quality of good and service,
availability of resource, availability of alternative resource, level of competition.
What knowledge and skills are required for a purchasing professional? - Correct
Answer>>knowledge 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? - Correct Answer>>If 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? - Correct Answer>>They are
challenging tasks which require detailed planning and time.
What are 4 enablers of purchasing and supply excellence? - Correct
Answer>>Human Resources, organizational design, information technology,
measurement.
How can an effective purchasing department affect organization appearance? -
Correct Answer>>optimal amount of purchasing will increase bargaining power
which will reduce cost, reduces defective goods, maintains minimal inventory.
Who are purchasing internal customers? - Correct Answer>>The employees of the
organization and internal users of the product.
Discuss the contributions a purchasing department can make to the corporate
strategic planning process. - Correct Answer>>procurement of materials, price
evaluation, compliance of policy.
List the areas that are typically within purchasing span of control. - Correct
Answer>>Spend Analysis, demand management and specifications, category
management, contract management, cost management and supplier management.
Describe how purchasing becomes aware of purchasing requirements? - Correct
Answer>>Quality 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? - Correct
Answer>>Anticipating 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? - Correct Answer>>less suppliers in market, requires early procurement
materials, cannot determine risks and costs.
List documents which are covered by E-procurement tools. - Correct
Answer>>Proper purchasing document, cost free document, other supporting
documents.
What are the advantages/disadvantages of E-Procurement tools? - Correct
Answer>>Advantage: 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? -
Correct Answer>>ensure performance initiatives, manage purchasing of good and
services, identify opportunities and purchasing trends, support future purchasing
decisions.
How does just in time purchasing and production system reduce the need for certain
purchasing documents? - Correct Answer>>It gives a continuous amount of supply
of product or inventory to reduce documentation. Documents regarding warehouse
and transportation are not needed.
Why has purchasing been involved with transportation and other non-purchasing
areas? - Correct Answer>>Its an important kind of buying dealing with logistics
providers and suppliers. This includes assembly, packaging, and warehouse
production items.
What is the difference between capital equipment and routine supplies? - Correct
Answer>>Capital equipment is a capital expenditure, profits can be earned only in
the future, requires lump sum to buy. Routine Supplies is a revenue expenditure
profit earned immediately, requires less to purchase.
What is the difference between a purchase order and a blanket order. What are the
advantages of a blanket order? - Correct Answer>>A purchase order is viable
document with the price, quantity and type of product. Blanket order is an open
