Question 1

Which of the following reflects does not reflect a strategic focus on procurement?&#10;A)focus on total cost of ownership.&#10;B)supply base reduction.&#10;C)focus on purchase price.&#10;D)win-win negotiation.

Accepted Answer

A strategic focus on procurement takes into account various factors such as total cost of ownership, supplier relationship management, and risk management. Focusing solely on purchase price does not reflect a strategic approach as it overlooks other important aspects of procurement. Therefore, option C is the correct choice as it does not reflect a strategic focus on procurement.

Question 2

company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the company has begun:&#10;A)volume consolidation&#10;B)supplier operational integration&#10;C)value management&#10;D)analysis of total cost of ownership

Accepted Answer

The company's decision to no longer extensively count and inspect products from a particular supplier indicates that it has established a strong relationship and trust with the supplier. This is a result of supplier operational integration, where the company has worked closely with the supplier to improve efficiency and reduce costs, while maintaining quality standards. Volume consolidation may involve working with fewer suppliers to reduce purchasing costs, value management involves optimizing the value received from suppliers, and total cost of ownership analysis involves assessing the costs associated with owning and using a product over its lifetime. While these concepts may be related to supplier operational integration, the decision to reduce inspection suggests a closer focus on supplier trust and collaboration.

Question 3

Supply base reduction (volume consolidation)&#10;A)has potential benefits for suppliers as well as for buyers.&#10;B)involves early supplier involvement in product design.&#10;C)puts the buyer at a negotiating disadvantage.&#10;D)has little potential for savings for buyers.

Accepted Answer

Supply base reduction, also known as volume consolidation, can benefit both suppliers and buyers. Suppliers can benefit from having more consistent demand and a larger share of the buyer's business, while buyers can benefit from lower transaction costs, better quality control, and stronger supplier relationships.

Question 4

procurement, Total Cost of Ownership includes all of the following except:&#10;A)field failures of purchased items&#10;B)consideration of the impact of supplier quantity discounts&#10;C)cost of order placement&#10;D)In fact, total cost of ownership includes all of the above.

Accepted Answer

Total Cost of Ownership (TCO) includes all of the listed items, including field failures of purchased items, consideration of the impact of supplier quantity discounts, and cost of order placement. TCO is a comprehensive approach to evaluating the cost of acquiring and owning goods or services over their entire life cycle, from acquisition through disposal or replacement. It takes into account not just the initial purchase price but also ongoing costs such as maintenance, repair, and replacement.

Deck 4: Procurement