Exam 7: Supply Management

A supplier that has previously demonstrated its performance capabilities through purchase contracts may well receive:

Use of EDI in the supply chain has led to shorter lead times and lower inventory.

Flingers Inc. reveals the following information in their annual report for FY 2017 Earnings and Expenses Sales \ 10,000,000 Cost of goods sold \ 5,000,000 Pretaxearnings \ 500,000 Selected Balance Sheet Items Merchandise inventory \ 80,000 Total assets \ 2,000,000 Upper management plans to cut cost of goods sold by 5% for the coming year but retain the same sales. What will Flingers' return on assets figure be for 2018

A manufacturer that wants to make sure that suppliers do not become complacent should use multiple sourcing.

Cross sourcing is a strategy in which two suppliers are used for the same purchased product or service.

A company that regularly outsources goods and services may have established close relationships with their suppliers and therefore will allow these suppliers the first opportunity to bid for new business needs. These suppliers are known as ________.

This table contains the performance criteria and scores (larger numbers are better)for four potential suppliers to Los Pollos Hermanos. Evaluate the data and identify the BEST source for Los Pollos Hermanos. Performance Dimension Company W Company P Company D Company G Purity (=0.5) 5 4 2 5 Cost (=0.2) 4 3 5 2 Stability (=0.2) 2 1 4 5 Speed (=0.1) 3 5 5 2

Flingers Inc. reveals the following information in their annual report for FY 2017 Earnings and Expenses Sales \ 10,000,000 Cost of goods sold \ 5,000,000 Pretaxearnings \ 500,000 Selected Balance Sheet Items Merchandise inventory \ 80,000 Total assets \ 2,000,000 Calculate Flingers' profit margin, return on assets, and leverage effect

One advantage of outsourcing is that it:

Flingers Inc. reveals the following information in their annual report for FY 2018 Earnings and Expenses Sales \ 10,000,000 Cost of goods sold \ 5,000,000 Pretaxearnings \ 500,000 Selected Balance Sheet Items Merchandise inventory \ 80,000 Total assets \ 2,000,000 What is Flingers' return on assets?

What is portfolio analysis and how is it accomplished? Provide an example of a purchased product or service that would fall in each area for a university applying portfolio analysis.

The bulk of insourcing costs are usually ________ costs.

Identify the major trends in supply management and their impact from a strategic perspective.

________ is the name for a process requiring a company to identify and determine all of the major costs associated with different sourcing possibilities.

Dusty is evaluating two bids to supply fence hardware for the 5 acres of pasture that need to be fenced. Breezy submits a bid of $40 per unit with a defect rate of 3%; Lady's bid is $50 per unit and their product manager estimates the defect rate to be around 0.5%. If a section of fence fails, it costs an average of $500 in losses and herding costs to round up all of the capybaras (giant rodents from South America - their leather makes fine gloves). Dusty believes it will take 500 units to fence in this pasture configuration. The product manager's uncertainty has Dusty concerned; what defect rate for Lady would make Dusty indifferent between the two suppliers as far as total cost is concerned?

Maverick spending is often promoted by top management as a way to improve the bottom line and break out of a purchasing cycle.

Building relationships for key suppliers and preparing contingency plans in case of supply interruptions is vital for products or services found in the:

A company using portfolio analysis decides to form partnerships with suppliers; the products in question probably fall in the ________ quadrant.

Company A spends $250 million purchasing materials and subassemblies that it processes and sells for a total of $350 million. The cost of goods sold by Company A is $350 million.

________ is a purchasing description method that focuses attention on the outcomes the customer wants.