Chapter 4

Question 1

Refers to the process or method of finding and procuring quality goods, services, or works through cost- effective methods

Answer 1

Procurement strategy

Question 2

Key strategies of procurement/Types of procurement strategies

Answer 2

-cost reduction
-sustainable purchasing
-risk management
-supplier relationship management
-global sourcing
-total quality optimization

Question 3

This type of strategy is beneficial to organizations in accounting for company expenditure and improving organizational functions

Answer 3

Cost reduction

Question 4

Also known as green purchasing, sustainable purchasing highlights the procurement of quality goods and services with low environmental impact

Answer 4

Sustainable purchasing

Question 5

Is an ideal option for businesses striving toward minimizing their carbon footprint

Answer 5

Sustainable procurement

Question 6

Are a part of any business transaction or process

Answer 6

Risk

Question 7

Concentrates on minimizing risks related to the procurement of goods and services

Answer 7

Risk mitigation

Question 8

Emphasizes forming robust supplier relationship and empowering them to enhance their capabilities

Answer 8

Supplier relationship management

Question 9

Is a well-defined strategy that entails procuring products and services from an expansive range of international suppliers

Answer 9

Global sourcing

Question 10

Is a method of strategy that ensures quality procurement by way of acquiring the right products that adhere to the highest standards

Answer 10

Total quality optimization

Question 11

Involves the gathering of facts, data, observations and trends about the marketplace in which suppliers conduct business

Answer 11

Supply chain market analysis

Question 12

Involves an assessment of multiple key areas that impact the full sourcing and procurement spectrum

Answer 12

Spend management

Question 13

Involves all of the common processes that you would expect-data retrieval, cleansing, classification, interpretation and presentation

Answer 13

Spend Analysis

Question 14

2 Factors considered while developing this model

Answer 14

1. Annual Expenditure Value of the SKU/Service
2. Criticality to the business

Question 15

Strategic tools used by procurement and supply chain professionals to identify and minimize supply risks

Answer 15

Kraljic Matrix

Question 16

This quadrant is represent by items which are least critical to your business and account for least expenditure value

Answer 16

Routine

Question 17

SKUs/Service in this quadrant are similar to routine quadrant but the spend value is very high for these items

Answer 17

Leverage

Question 18

Different quadrants

Answer 18

-Routine
-Leverage
-Bottleneck
-Critical

Question 19

These SKUs/Service are characterized by high risk and low annual expenditure value

Answer 19

Bottleneck

Question 20

Similar to bottleneck items, these items are very critical to your business

Answer 20

Critical

Question 21

Was developed in the 1970s to improve the purchasing process

Answer 21

Electronic Data Interchange (EDI)

Question 22

Benefits derived from implementing an e-procurement system

Answer 22

-Time saving
-Cost saving
-Accuracy
-Real time use
-Mobility
-Trackability
-Management benefits
-Supplier benefits

Question 23

Is essential in creating strong and mutually beneficial relations with vendors

Answer 23

Strategic sourcing

Question 24

Benefits include lower barriers to entry and transaction costs access to more buyers, and the ability to instantly adjust to market conditions, this making e-procurement attractive to most suppliers

Answer 24

Supplier benefits

Question 25

The system can be designed to store important supplier information, including wether suppliers are minority or locally owned, thus allowing the buyers to support such businesses

Answer 25

Management benefits

Question 26

The e-procurement system allows submitters and buyers to track each purchase requisition electronically through the process-from submission to approval and finally conversion to a purchase order

Answer 26

Trackability

Question 27

The buyer can submit, process, and check the status bids as well as communicate with supplier regardless of the buyer's geographical location and time of day

Answer 27

Mobility

Question 28

Buyers have a real-time access to the purchase requisition once it is prepared

Answer 28

Real-time use

Question 29

The system eliminates double-key inputs-once by the material users and then once again by the buyers

Answer 29

Accuracy

Question 30

Buyers can handle more purchases, and the manual tasks of matching bids to purchase requisition is reduced

Answer 30

Cost savings

Question 31

E-procurement is more efficient when (a)selecting and maintaining a list of potential suppliers (b) processing requests for quotation and purchase orders, and (c) making repeat purchase

Answer 31

Time savings

Question 32

Formula for total assets

Answer 32

=net income/ROA

Question 33

Profit leverage effect formula

Answer 33

=Cost Savings/Current Profit

Question 34

Process of acquiring goods and services from a third party member

Answer 34

Procurement

Question 35

Supply Chain Market Analysis

Answer 35

-Comprehensive Assessment -Characteristics of a market -Develop effective procurement strategies -insight needed

Question 36

Advantages of Supply chain market analysis

Answer 36

-It helps to identify market opportunities -It helps guide interaction with suppliers -It can help reduce expenses -It improves efficiency