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46 True/False questions

  1. JIT delivery...

          

  2. High level of supply riskRoutine and Leverage purchase

          

  3. Supplier Certification"An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections."
    Institute for Supply Management

          

  4. High valueRoutine and Bottle neck

          

  5. ISO (International Organization for Standardization)An independent, non-governmental membership organization and the world's largest developer of voluntary International Standards. Made up of 162 member countries, with a Central Secretariat based in Geneva, Switzerland.

          

  6. Critical purchases -items that involve a low percentage of the firms' total spend and involve very little supply risk.

          

  7. Spend analysis -identifies how much is being spent on each type of product or service across all locations in the firm

          

  8. Is make or buy strategic?Yes

          

  9. Describe some examples of Supplier Performance Metrics...Bottleneck and Critical

          

  10. Internet-based communications offerseveral opportunities for making product information available while overcoming compatibility issues between computer systems

    Electronic catalogs allow rapid access to product info, specifications, pricing and ordering
    Buying exchanges allow sellers or buyers of specific goods or services to find each other on a common web site

          

  11. Purchasing was historically-Purchasing was historically perceived as just a buying function for manufacturing, repair materials, and supplies

    -Purchasing agents tried to get the lowest price possible for the most acceptable quality

    -Transactional focus led to getting the best possible "deal" today
    Did not focus on future transactions
    No concept of supply chain
    Purchasing seldom looked beyond the first-tier supplier
    Purchasing simply responded to the demands of the production group

          

  12. Backward Vertical Integration- Refers to acquiring sources of supply

          

  13. Pretransaction components1.) Line fallout
    2.)Defective finished goods rejected before sale
    3.)Field failures
    4.)Repair/replacement in field
    5.) Customer goodwill/reputation of firm
    6.)Cost of repair costs
    7.) Cost of maitnence and repairs

          

  14. Procurement is an organizational capability thatAn independent, non-governmental membership organization and the world's largest developer of voluntary International Standards. Made up of 162 member countries, with a Central Secretariat based in Geneva, Switzerland.

          

  15. Routine purchasesitems that involve a low percentage of the firms' total spend and involve very little supply risk.

          

  16. Supplier Selection and AssessmentSupplier audits
    Supplier development
    Monitoring performance
    Supplier certification
    E-commerce and procurement
    -Electronic data interchange (EDI)
    -Internet

          

  17. Transaction components1.) Line fallout
    2.)Defective finished goods rejected before sale
    3.)Field failures
    4.)Repair/replacement in field
    5.) Customer goodwill/reputation of firm
    6.)Cost of repair costs
    7.) Cost of maitnence and repairs

          

  18. High valueCritical and Leverage purchase

          

  19. Procurement Focuses on Several Issues related to the Firms' Supply Baseensures the firm is positioned to implement its strategies with support from its supply base

    -Focuses on building relationships with suppliers (Tier 1 and beyond)
    -Involvement with outsourcing includes more than just purchasing raw materials and parts
    -Also includes finding alternate sources for manufactured products or services to help manage demand

          

  20. Operational IntegrationRefers to acquiring customer's operations.

          

  21. Operational IntegrationPrimary objective of operational integration is to cut waste, reduce cost, and develop a relationship that allows both buyer and seller to achieve mutual improvements

    Integration can take many forms
    -Buyer providing detailed sales information to supplier
    -Buyers and suppliers working together to redesign linked processes
    -Eliminating duplicated activities performed by both the buyer and supplier

    -Can provide incremental savings of 5% to 25% over the benefits of volume consolidation

          

  22. Electronic Data Interchange (EDI)is the electronic transmission of data between a firm and its suppliers
    Shares information and knowledge such as order entry, planning/scheduling, tracking, delivery, billing and payment

          

  23. Low value...

          

  24. Volume ConsolidationsIncreasing procurement leverage by reducing the total number of suppliers while continuing to minimize risk

          

  25. Leverage purchasesCommodity items where many alternatives of supply exist and supply risk is low. Spend is high and there are potential procurement savings

          

  26. Supplier Evaluation:"An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections."
    Institute for Supply Management

          

  27. Alternative procurement strategiesUser buy
    Volume consolidations
    Operational integration
    Value management

          

  28. Value ManagementRoutine and Bottle neck

          

  29. User BuyAllow users in the organization to doing the routine buying of items considered to be too insignificant to warrant further consideration.

          

  30. Several factors have elevated the importance of procurement to the firmUser buy
    Volume consolidations
    Operational integration
    Value management

          

  31. Bottleneck purchasesunique procurement problems. Supply risk is high and availability is low. Small number of alternative suppliers.

          

  32. Forward Vertical Integration -Refers to acquiring customer's operations.

          

  33. Where does procurement lookProcurement looks up and down the entire supply chain for impacts and opportunities
    Goods and service account for 55 cents of every sales dollar

          

  34. Supplier selection considerationsSupplier audits
    Supplier development
    Monitoring performance
    Supplier certification
    E-commerce and procurement
    -Electronic data interchange (EDI)
    -Internet

          

  35. Postransaction components1.) Identifying need
    2.) Investigating sources
    3.)Qualifying sources
    4.) Adding supplier to internal systems
    5.) Educating

          

  36. Leverage purchases- commodity items where many alternatives of supply exist and supply risk is low. Spend is high and there are potential procurement savings.

          

  37. ISO 9000A series of quality standards that provide basic definitions for quality assurance and quality management .
    Companies wanting to sell in the global market seek ISO 9000 certification.

          

  38. Low level of supply riskRoutine and Leverage purchase

          

  39. Pareto Principle:Buying materials and components from suppliers instead of making them in-house. The trend has moved toward outsourcing.

          

  40. Implications to decisions made in the following dimensions of procurement strategyPurchased goods and services are among the largest cost elements for most firms: 55 cents of every sales dollar
    The growing emphasis of outsourcing has expanded the supply base of organizations
    This added complexity requires more management attention on the organizational interfaces with suppliers

          

  41. Total cost of ownership1.) Pretransaction components
    2.) Transaction components
    3.) Posttransaction components

          

  42. ISO 14000A series of standards for environmental management measuring a firm's environmental impact.
    The benefits include reduced energy consumption, environmental liability, reduced waste & pollution, and improved community goodwill.

          

  43. A buyer's activities to improve a supplier's performance and/or capabilities based on the following approach:What types of metrics might I use to rate my suppliers?
    What about metrics for transportation providers?

          

  44. Supplier Recognition ProgramsA process to identify the best & most reliable suppliers
    Sourcing decisions are made on facts and not on perception
    Frequent feedback can help avoid surprises & maintain good relationships.
    Suppliers should also be allowed to provide constructive feedback to (you) the customer

          

  45. Outsourcing -Buying materials and components from suppliers instead of making them in-house. The trend has moved toward outsourcing.

          

  46. A segmented approach is used toprioritize resources for purchasing
    The most procurement effort goes to the most critical supplies/suppliers