S/P

Question 1

What is Procurement(kind a like supply) ?

Answer 1

All activities that are required in order to get the product from the supplier to its final
destination. It is based on ‘total cost of ownership-thinking’.
Definition:
The management of the company’s external resources in such a way that the
supply of all goods, services, capabilities and knowledge which are
the materials, information and money flows up to the point of
consumption.

Monitoring and control of the order to secure supply (expediting) make it faster.

supplier rating and supplier ranking

Question 2

What is Puchasing?

Answer 2

All activities for which the company receives an invoice from outside parties.
Differentiation between:
– Purchasing function.
– Purchasing department.

Question 3

What are differnces between Puchasing Function and Puchasing department?

Answer 3

Scope: PF, refers to the broader process of acquiring goods or services needed by a company.
PD is a specific organizational unit within a company that is responsible for executing the purchasing function. Mostly focuses on day-to-day activities.

Structure: PF, involves many departments or stakeholders within a company.
PD, is a dedicated unit within a company’s organizational structure.

Responsibilities: PF, encompasses a wide range of activities related to acquiring goods or services.
PD, is primarily responsible for executing these activities efficiently and effectively.

Question 4

Purchasing/procurement

Answer 4

Purchasing: Generally refers to the transactional aspect of acquiring goods or services.
Short-term transactions, obtaining goods or services at the best price, quality, and delivery terms to meet immediate needs.

Procurement: Encompasses a broader set of activities beyond just purchasing. It is a longer-term perspectivestrategic approach, focusing on aligning procurement activities with the overall goals and objectives of the organization.

Question 5

Value Chain Management

Answer 5

Value chain management is a strategic approach to managing a network of interconnected activities involved in delivering value to customers. It involves optimizing each stage of the value chain—from raw material sourcing to production, distribution, and ultimately, delivery to the end customer—to enhance efficiency, reduce costs, and improve overall competitiveness. Key aspects of value chain management include identifying opportunities for process improvement, streamlining operations, fostering collaboration with suppliers and distribution partners, and aligning activities with customer needs and preferences. The goal is to create value for both the company and its customers while maximizing profitability and sustainable growth.

Question 6

Internal Customer

Answer 6

In essence, within a company, every employee or department can be considered an internal customer to another employee or department.

Question 7

International Purchasing Offices (IPOs)

Answer 7

Nowadays many companies produces their produtds in low cost countries. This lead to the organizations set up International Purchasing Offices (IPOs).

Question 8

Plants

Answer 8

In a business context, the term “plant” typically refers to the physical infrastructure or facilities where production, manufacturing, or other operational activities take place.

Question 9

CSR

Answer 9

Corporate social responsibility (CSR) is a business approach that involves(attempts) a company’s initiatives to assess and take responsibility for its effects on environmental and social well-being. CSR programs typically encompass efforts to engage in sustainable practices, support ethical labor standards, contribute to community development, and minimize environmental impact.

Question 10

Challenges in Procurenent process

Answer 10

1.Sustainabilty:Procurement professionals should ensure that the products
and services they buy come from sources of high integrity=refers to the commitment of individuals, organizations, or businesses to uphold ethical principles and demonstrate honesty, transparency, and accountability in their sustainability efforts.

2. Resouce scarcity =Famine, hunger
   How to secure the
   company’s future requirements for critical materials and products.

3.Digitalization for procurement professionals when
selecting new suppliers.

4.Early supplier involment
As more and more innovations in industry come from suppliers,
getting them involved early in the new product development process
becomes an issue of prime concern

5.Cross-functional sourcing is a procurement strategy that involves collaboration and coordination among multiple departments or functions within an organization to optimize the sourcing process. Instead of sourcing decisions being made solely within the procurement or purchasing department, cross-functional sourcing involves input and participation from various stakeholders across different departments such as finance, operations, marketing, engineering, and quality assurance.

Question 11

Derived demand:

Inelastic, fluctuating demand:

ORGANIZATIONAL BUYING BEHAVIOUR

Answer 11

These two concepts are related to industrial markets and how they differ from consumer markets:

1. Derived demand: Derived demand refers to the demand for goods or services that arises from the demand for another good or service. In the context mentioned, it means that the demand for industrial products or services is often derived from the demand for end-user products or services further downstream in the value chain. For example, the demand for steel might be derived from the demand for automobiles or construction projects. Changes in end-user markets can lead to changes in demand for intermediate goods or services used in production.
2. Inelastic, fluctuating demand: This refers to the characteristic of demand in industrial markets where it tends to be less responsive to changes in price compared to consumer markets. Industrial markets often exhibit inelastic demand because the products or services they provide are essential inputs for the production of other goods or services. However, while demand may be inelastic over the long term due to the necessity of certain inputs, it can still fluctuate in response to changes in economic conditions, technological advancements, or shifts in end-user demand. This means that while demand is less sensitive to price changes, it can still vary over time.

Question 12

Fisher 1970

Answer 12

According to Fisher (1970)
the procurement decision-
making process is primarily
determined by two aspects:
product complexity and
commercial uncertainty

If these two aspects are
combined, statements can
be made about what
disciplines will be involved
in the decision-making
process.

Question 13

Decision Making Unit (DMU)

Answer 13

DMU relates to all those individuals and groups who
participate in the procurement decision-making process, who
share some common goals and the risks arising from the decisions.

Users
– Influencers
– Buyers
– Decision-makers
– Gatekeepers (people who control the flow of information
from the supplier towards the other members of the DMU
and vice versa).

Question 14

Procurement situations?

Answer 14

a)New task situation:
Completely new product from unknown suppliers
High uncertainty regarding outcome
acquisition of capital goods=The acquisition of capital goods refers to the process of purchasing or obtaining long-term assets that are used in the production of goods or services within a business. Capital goods are tangible assets that are expected to provide benefits to the business over an extended period, typically more than one year

b)Modified rebuy:
New product from known supplier
Existing product, new supplier
Moderate uncertainty regarding outcome

c)Straight newbuy:
Known product from known supplier
Low uncertainty regarding outcome
(e.g. consumable items like MRO,Maintenance, Repair, and Operations: In a business or industrial context, MRO refers to the activities related to maintaining, repairing, and operating equipment, machinery, and facilities necessary for production or operations.)

Question 15

Purchase order specification

Answer 15

Purchase order specification contains
– Quality specifications
– Logistics specification
– Maintenance specification
– Legal and environmental requirements
– Target budget.

Question 16

bidders

Answer 16

teklif verenler

Question 17

Penalty, warranty

Answer 17

Ceza, garanti

Answer 18

The specification phrase
Supplier selection and assessment
Negotiations(müzakere) and contracting
Prices and terms of delivery
Terms of payment
Penalty, warranty, and other agreements

Question 19

personal selling

Answer 19

person to person communication with prospect(possibility)

Question 20

simple sales

Answer 20

Complex sales and simple sales refer to two different approaches or types of transactions in the realm of sales and business. Here’s an overview of each:

1. Simple Sales:
   
   • Simple sales typically involve transactions where the product or service being sold is relatively straightforward and doesn’t require extensive customization or consultation.
   • These sales often occur in retail environments or online platforms where customers can easily understand the product or service and make a purchase decision without much assistance.
   • Examples of simple sales include buying everyday consumer goods like groceries, clothing, electronics, or software subscriptions from a retail store or website.
   • In simple sales, the sales process tends to be shorter, with less need for relationship-building or in-depth negotiation.

Question 21

Complex sales

Answer 21

2. Complex Sales:
   
   • Complex sales involve transactions that are more intricate and involve higher levels of customization, consultation, and negotiation.
   • These sales typically occur in business-to-business (B2B) environments or for high-value products or services where the buyer requires more information, expertise, and support to make a purchasing decision.
   • Complex sales often involve multiple stakeholders within the buying organization, lengthy sales cycles, and the need for detailed proposals, presentations, and demonstrations.
   • Examples of complex sales include selling enterprise software solutions, industrial equipment, consulting services, or large-scale infrastructure projects.
   • In complex sales, the sales process is more relationship-driven, requiring sales professionals to build trust, understand the customer’s specific needs, and provide tailored solutions.

In summary, while simple sales involve straightforward transactions typically occurring in retail settings with minimal consultation, complex sales involve more intricate transactions, often occurring in B2B environments, requiring extensive customization, consultation, and relationship-building to meet the buyer’s specific needs.