MNP2601 exam questions solutions.

CHAPTER 2 Oct/Nov 2014 Question 2 2.1 In a table, shortly explain why a supply manager would consider a decentralised purchasing and supply organisational structure by referring to the following. Chapter 2 (a) Any 5 advantages of a decentralized P&S Organisational structure (5 marks) (b) Any 5 disadvantages of a decentralized P&S Organisational structure (5 marks Type of structure Advantages Disadvantages Centralised  Materials & products are standardised.  Negotiating power is increased & volume discounts are made possible.  Staf are aforded the opportunity of becoming experts.  Control is improved.  Administrative costs are reduced.  Supplier relations are enhanced.  Information systems integration is facilitated.  Duplication of efort is eliminated.  There is a slow response time to regional plants.  There is resentment from geographically dispersed business unit management.  There is a tendency to bypass the central buying office.  Less integration with user departments.  Staf structure is top heavy.  Lack of insight into the requirements of dispersed plant units. Decentralis ed  There are better relations between decentralised purchasing and other functions.  There is good service delivery to regional plants.  There is faster reaction time to user departments in emergencies.  Support of local suppliers generates goodwill.  There is greater autonomy for profit centres.  Inter-divisional competition can improve purchasing performance.  There is loss of economies of scale.  Suppliers are confused by dealing with many offices.  There is Duplication of staf and facilities.  Control over the function is much more difficult.  There is greater likelihood of communications breakdown.  There is focus on local units and under emphasis on strategic issues. Centralised org structure – is when org vests authority for P&S in 1 person/dedicated team. Specialist staf do strategic planning. Widely used more coz of availability & efficiency of transport or logistics networks, development such as SCM, supplier partnering, long-term contracts & integrated info systems. Sophisticated IT systems has assisted P&S in making info available from centralized structure to operational units which are geographically dispersed. Decentralised org structure – is defined as purchasing by diferent departments, branches/plants while each of them enjoys an important measure of autonomy in decision making regarding the P&S function. More freedom for the business units to manage own supply matters. CHAPTER 3 Question 2 - May/June 2013 2.1 When an order has been placed in the purchasing process, the order from serves as a source document for all activities to be performed. To which functions or groups should the order form, or copies thereof, be distributed and for what reasons? (10) Pg 54  The supplier receives the original order  The financial function receives a copy, verification of invoice and for payment purposes. This copy and another copy with a certificate confirming that the ordered goods were received are usually filed as proof of payment for audit purpose.  The receiving function, frequently part of the stores, receives a copy notifying it to expect the delivery. This is also used for the receipt and inspection of the goods.  The inspection function receives a copy with detailed information on the specs, enabling it to plan the inspection task efficiently.  The purchasing function keeps a copy for follow-up & expediting, and as control measures in the case of part deliveries of the order.  The last copy says in the order book, as a permanent record of transaction Analysing the invoice Pg 57 The invoice is analysed and compared with the official order and delivery note. The most important aspects of this task are:  Comparing invoice prices with those on the order or quotation  Verifying calculations  Checking discounts  Comparing quantities received with those ordered  Confirming that the details on the invoice are in full agreement with the terms & conditions of the original orde