L4M6 - Practice Test 3 & 4 Flashcards
(20 cards)
Is ABC analysis a suitable technique for a procurement professional to categorise purchases by their profit impact and supply risk?
No, because ABC analysis only focuses on volume and value
What is the Pareto Analysis?
Pareto Analysis is a technique that helps to identify and focus on the most significant or influential items or activities among a large number of them. For example, a Pareto analysis can help to identify the most common causes of customer complaints, the most profitable products or services, or the most time-consuming tasks.
What is ABC analysis?
ABC analysis is a technique that helps to classify and manage different types of items or activities based on their relative importance or value. It divides items or activities into 3 categories A, B, and C according to their contribution to the total value or cost.
What helps improve the accuracy of cost modelling?
- Capture cost drivers, not just cost elements.
- Build commodity-specific models to highlight key drivers.
- Consider the impact of total cost of ownership.
- Start simple and add complexity only as needed.
- Triangulate around data to improve accuracy and confidence.
What are some potential advantages for a buyer who establishes a partnership with a supplier?
- Greater stability of supply and prices
- Potential cost-savings
2 main benefits of using Mendelow’s Theory to map the stakeholders for procurement?
- It helps to gain insights to key stakeholders’ requirements and expectations
- It helps to allocate time and efforts effectively in managing relationships
What kind of relationships encourages open book costing from the supplier?
Adversarial relationship?
Tactical relationship?
Arm’s length relationship?
Partnership relationship?
Partnership relationship
What are the essential steps that both buyer and supplier should take to maintain total quality management (TQM) throughout the partnership?
Jointly Develop KPIs with supplier
Develop formal review process
What are Primary activities in Porter’s value chain?
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- After-sales service
What are the support activities in Porter’s Value Chain?
- Firm infrastructure
- Human Resources management
- Technology development
- Procurement
What are the 6 factors that affect a buyer-supplier relationship the most?
Trust me
Power
Commitment
Transparency
Cooperation
Communication
What are some reasons that might motivate a company to collaborate with its supplier?
Use distributive approach in negotiation
Expand the frequency of stockouts
Shorten product life cycle
Higher cost efficiencies
Higher cost efficiencies
What does FSNP stand for?
Forming - First stage of team development where team members meet each other.
Storming - Second stage of team development where team members express opinions, idea’s, and expectations, which may cause conflict, disagreement or power struggles within the team.
Norming - Team members start to cooperate and collaborate more effectively, and develop a sense of unity and harmony.
Performing - Works together efficiently and productively.
What are the 7 external factors influencing organisation?
- Socio-cultural
- Technological
- Economic
- Environmental
- Political
- Legal
- Ethical
What type of competitive strategies is a company using when it reduces its operating costs and sells standard products at below-average prices to increase its market share?
Cost leadership
A company who selects cost leadership strategy will implement the following:
- The company competes as the lowest-cost producer by exploiting the sources of cost advantage
- The company typically sells standards or budget products
The Kraljic model helps a procurement team sort the products and services they buy into different quadrants. Each group of items has a certain level of supply risk that determines its position on the model. Which factor does the procurement team use to evaluate the level of risk for each group?
Impact
Probability
The importance of quality assurance and system integration requirements in a JIT system:
- Quality Assurance
- System Integration Requirements
- Competitive Prices and Bulk Discounts
- Uniforms and Brand Types
What tool can be used to assess how profitable an industry is?
Porter’s 5 forces - PFF is a tool for analysing the profitability and attractiveness of an industry.
Is it true or false that a broad differentiation strategy means providing a unique service to a small market segment?
False, it targets a wide customer group and stands out from the competition
What are the processes that enable an organisation to keep improving continuously?
Total quality management
Value Analysis
