Exam 6: Strategic Sourcing

Use the information below to answer the following question(s): A retailer operating a network of home improvement stores has annual sales of $800 million, annual cost of goods and materials purchased of $500 million,and net income of $125 million. -What should the new annual sales be to have the same effect on the bottom line as a 15-percent reduction in the cost of goods and materials purchased,other things remaining unchanged?

The process of comparing supplier prices against one another or against external benchmarks is known as ________.

A purchased item with few alternate sources of supply,typically due to complex specifications,is a

The sheer volume of spend for a particular item is known as the ________.

The process of comparing supplier prices against one another or against external benchmarks is known as

For a manufacturer of canned fruit,the procurement of items like oranges and peaches will fall in the leverage quadrant.

The process of buying and working with suppliers is known as

The focus of the purchasing function in the war years (1910-1946)was on obtaining scarce materials.

The spend on an item like steel by an automobile manufacturer should be categorized in which spend category?

A dollar saved in the cost of materials purchased is a dollar added to the pre-tax profit.

The process of buying materials,components and services and working with suppliers is known as ________.

The ABC Tool company is considering the best manufacturing location decision for manufacturing their range of PowerDrills.The 3 options are to manufacture in the USA (current scenario),outsource manufacturing to either China or India.The cost to manufacture the product in the USA location (including all overhead costs)is $50 per unit,whereas the same cost for the China and India locations are $33 per unit and $30 per unit respectively.A container can hold 1000 units and it costs $10,000 to ship a container from China to USA and $11,200 to ship a container from India to USA.Additional inventory carrying costs incurred on account of the China and India locations are $1 and $1.35 per unit respectively.Additional logistics costs (on account of customs duties and related delays)are $2 and $2.5 for the China and India locations respectively.Determine the best (lowest cost)location to manufacture the PowerDrill product line.

Purchased goods and services typically make up what percentage of a firm's cost of goods sold?

The terms procurement and purchasing are used interchangeably.

Use the information below to answer the following question(s): A retailer operating a network of home improvement stores has annual sales of $800 million, annual cost of goods and materials purchased of $500 million,and net income of $125 million. -What is the new profit margin with a 15-percent reduction in the cost of goods and materials purchased,assuming sales and other costs remain unchanged?

The impact of sourcing materials or services with improved quality for a firm is

A purchased item that has many sources of supply,but has the potential to affect profit because it is bought in high volumes is a(n)________ item.

The spend on building and large equipment is categorized within the capital spend category.

The sourcing strategy for procuring routine items would be to

The focus of the purchasing function in the new millennium (year 2000 onwards)has been