Cost Advantage - CORRECT ANSWER-Efficiency gains / utilization
-Reduce purchasing costs
-Reduce in inventory levels
-Sharing capital investment
-Reduced waste
Centralized Procurement Structure - CORRECT ANSWERCentralized procurement
organization for al commodities with a single upward reporting structure
Hybrid Procurement Structure - CORRECT ANSWERDecentralized transactions, but
central led strategy and sourcing control
Coordinated Procurement Strucuture - CORRECT ANSWERDecentralized sourcing,
but center led led strategy. Voluntary commodity strategy collaboration across BU
Make - CORRECT ANSWERThe organization produces the goods or provides the
services internally
Buy - CORRECT ANSWERThe organization procures the goods or services from a
supplier
Insource - CORRECT ANSWERTransition from buy to make
Outsource - CORRECT ANSWERTransition from make to buy
Offshoring - CORRECT ANSWERThe relocation of business processes and services to
a lower-cost foreign location
100% Make - CORRECT ANSWERAll components are made internally
100% Buy - CORRECT ANSWERFinished goods are completely outsourced
Transaction Cost Economics - CORRECT ANSWERa theoretical framework in
strategic management to explain and predict the boundaries of the firm, which is central
to formulating a corporate strategy that is more likely to lead to competitive advantage
Transaction Cost Economics Attributes - CORRECT ANSWERThe cost of producing
something should be weighed against the cost of acquiring it in a market
The tradeoff which must be managed when managing an exchange relationship is the
level of incentives required to avoid opportunistic behavior
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