OM 300 FINAL EXAM QUESTIONS AND ANSWERS
The University of Alabama, OM 300, Final ExamComponents of a supply chain network
- Answers - - Suppliers
- Manufacturers
- Distributors
What is outsourcing? - Answers - - Transfers some of the internal activities of a firm to
outside vendors
- Uses specialization for efficiency so they can focus on core production
Many companies sourcing strategy for suppliers - Answers - - Plays one supplier
against another so they compete
- Holds supplier responsible for technology, expertise, forecasting, cost, quality, and
delivery
- Long term relationships are not the goal
- Common with commodities
Few companies sourcing strategy for suppliers - Answers - - Creating long term
relationships with few suppliers
- Suppliers particiapting in JIT programs and contribute expertise
- Beleive cost of changing partners is huge
- Have trade secrets and other alliances
What is vertical integration? - Answers - - Developing the ability to produce goods or
services previously purchased within the company OR just buying the supplier
-Two types: forward and backward
- Benefits: Cost reduction, higher quality, inventory reduction
-Works best when company has large market share
Forward integration - Answers - Moving closer to the finished goods of customers,
-Involves the purchase or control of DISTRIBUTORS moving to finished goods
Backward integration - Answers - Purchasing of a SUPPLIER
-it can improve efficiency and save money (raw materials)
Four stages of supplier selection for a company - Answers - 1. Supplier evaluation
2. Supplier development
3. Negotiations
4. Contracting
1. Supplier selection: Evaluation - Answers - - Finding potential suppliers and
determining the likelihood of becoming good suppliers
, -Strict evaluations of all types of things (ie; financial strength, management, quality,
etc...)
- May require internal or external certification! (3 step process) once certified they are
treated with priority
2. Supplier selection: Development - Answers - - Ensuring the supplier has the right
equipment to produce quality items and can deliver on time
- Includes training, engineering and production help
3. Supplier selection: Negotiations - Answers - -When price, delivery terms, quality
standards and advertising are discussed
-Cost based (time and materials)
-Market based (based on indexs ie; commodities)
-Competitive bidding (suppliers bid against each other)
4. Supplier selection: Contracting - Answers - - Shares the risks and benefits
- Creates incentives to encourage supplier efficiency
- Spells out terms
- Goal is collboration
- Make pie bigger and then divide to all participants
Five distribution systems - Answers - - Trucking: moves vast majority of goods, flexibility
- Railraods: Large loads, unflexible
- Air: Fast, flexible. Expensive
- Water: Bulk cargo. Shipping cost > speed
- Pipelines: Oil, gas, chemicals
- Multimodal: Combines methods with Standardized containers (international)
Three ethical concerns in supply chain - Answers - - Personal ethics: Subject to
dilemma because sales personnel are anxious to sell and are tempted to do so via
bribes (Critical to long term success)
- Ethics within supply chain: Managers may be tempted to ignore lapses by supplier or
offload pollution to supplier
- Environmental ethics: Being environmentally concious
Amazon Global Company Profile - Answers - -Started as a virtual retailer (no
inventory/warehouses, directly to suppliers)
-Growth forced them to become world leader in warehousing
-Customer experience yields low price, fast delivery
-Pull, package, and ship in less than 3 minutes
Four main types of inventory - Answers - 1. Raw material: Purchased but not processed
2. WIP: Some change, incomplete
3. Maintenance: Supplies needed for upkeep for productivity
4. Finished Goods: Completed product, awaiting shipment
The University of Alabama, OM 300, Final ExamComponents of a supply chain network
- Answers - - Suppliers
- Manufacturers
- Distributors
What is outsourcing? - Answers - - Transfers some of the internal activities of a firm to
outside vendors
- Uses specialization for efficiency so they can focus on core production
Many companies sourcing strategy for suppliers - Answers - - Plays one supplier
against another so they compete
- Holds supplier responsible for technology, expertise, forecasting, cost, quality, and
delivery
- Long term relationships are not the goal
- Common with commodities
Few companies sourcing strategy for suppliers - Answers - - Creating long term
relationships with few suppliers
- Suppliers particiapting in JIT programs and contribute expertise
- Beleive cost of changing partners is huge
- Have trade secrets and other alliances
What is vertical integration? - Answers - - Developing the ability to produce goods or
services previously purchased within the company OR just buying the supplier
-Two types: forward and backward
- Benefits: Cost reduction, higher quality, inventory reduction
-Works best when company has large market share
Forward integration - Answers - Moving closer to the finished goods of customers,
-Involves the purchase or control of DISTRIBUTORS moving to finished goods
Backward integration - Answers - Purchasing of a SUPPLIER
-it can improve efficiency and save money (raw materials)
Four stages of supplier selection for a company - Answers - 1. Supplier evaluation
2. Supplier development
3. Negotiations
4. Contracting
1. Supplier selection: Evaluation - Answers - - Finding potential suppliers and
determining the likelihood of becoming good suppliers
, -Strict evaluations of all types of things (ie; financial strength, management, quality,
etc...)
- May require internal or external certification! (3 step process) once certified they are
treated with priority
2. Supplier selection: Development - Answers - - Ensuring the supplier has the right
equipment to produce quality items and can deliver on time
- Includes training, engineering and production help
3. Supplier selection: Negotiations - Answers - -When price, delivery terms, quality
standards and advertising are discussed
-Cost based (time and materials)
-Market based (based on indexs ie; commodities)
-Competitive bidding (suppliers bid against each other)
4. Supplier selection: Contracting - Answers - - Shares the risks and benefits
- Creates incentives to encourage supplier efficiency
- Spells out terms
- Goal is collboration
- Make pie bigger and then divide to all participants
Five distribution systems - Answers - - Trucking: moves vast majority of goods, flexibility
- Railraods: Large loads, unflexible
- Air: Fast, flexible. Expensive
- Water: Bulk cargo. Shipping cost > speed
- Pipelines: Oil, gas, chemicals
- Multimodal: Combines methods with Standardized containers (international)
Three ethical concerns in supply chain - Answers - - Personal ethics: Subject to
dilemma because sales personnel are anxious to sell and are tempted to do so via
bribes (Critical to long term success)
- Ethics within supply chain: Managers may be tempted to ignore lapses by supplier or
offload pollution to supplier
- Environmental ethics: Being environmentally concious
Amazon Global Company Profile - Answers - -Started as a virtual retailer (no
inventory/warehouses, directly to suppliers)
-Growth forced them to become world leader in warehousing
-Customer experience yields low price, fast delivery
-Pull, package, and ship in less than 3 minutes
Four main types of inventory - Answers - 1. Raw material: Purchased but not processed
2. WIP: Some change, incomplete
3. Maintenance: Supplies needed for upkeep for productivity
4. Finished Goods: Completed product, awaiting shipment
