PURCHASING & SUPPLY CHAIN MANAGEMENT EXAM
WITH ANSWERS #1
Why are more top managers recognizing the importance of purchasing/supply
management? - correct answer SCM improves relationship building and innovation,
improves reputation, time, competitive advantages, and operating cost of company.
What is the difference between purchasing and supply management? What is the
difference between supply chain orientation and supply chain management? - correct
answer Purchasing management is a functional group, it maximizes the organization
and is a process of managing purchase functions. Supply management is a process of
managing resources, its the present and future needs of the company, strategic/cross
functional approach of nature. Supply chain orientation is the managing of operating
activities. SCM is the managing the flow of the goods.
What is the difference between supply chain and value chain? - correct answer Supply
chain is the process of transfers material information from one place to another,
packaging and marketing not required, organizational orientated. Value Chain creates a
value and competitive advantage for company, storage and transportation not required,
involved packaging and marketing and is customer orientated.
Do you think organizational purchasers should behave like entrepreneurs? - correct
answer Organizational purchasers should behave like entrepreneurs to enhance
company profit margins and growth because of the responsibility for profit and loss of
business.
What are some of the factors which might influence how important purchasing is to the
success of the business? - correct answer Quality of good and service, availability of
resource, availability of alternative resource, level of competition.
What knowledge and skills are required for a purchasing professional? - correct answer
knowledge of supplier and company, purchasing strategies, time management to be
efficient, negotiation skills for prices.
Why does the collective behavior of supply managers have such an impact on
economic trends? - correct answer If similar goods are ordered the price will be
affected. Since supply managers have control of the price they have control of
economic trends.
Why are supply base innovation and risk management two future area that will consume
more of the supply managers day? - correct answer They are challenging tasks which
require detailed planning and time.
What are 4 enablers of purchasing and supply excellence? - correct answer Human
Resources, organizational design, information technology, measurement.
, How can an effective purchasing department affect organization appearance? - correct
answer optimal amount of purchasing will increase bargaining power which will reduce
cost, reduces defective goods, maintains minimal inventory.
Who are purchasing internal customers? - correct answer The employees of the
organization and internal users of the product.
Discuss the contributions a purchasing department can make to the corporate strategic
planning process. - correct answer procurement of materials, price evaluation,
compliance of policy.
List the areas that are typically within purchasing span of control. - correct answer
Spend Analysis, demand management and specifications, category management,
contract management, cost management and supplier management.
Describe how purchasing becomes aware of purchasing requirements? - correct answer
Quality guarantee, reasonable pricing, on-time delivery, safety, maintenance and
service.
How is anticipating a requirement or a need through purchasers involvement on new
product development different than reacting to a purchase need? - correct answer
Anticipating a material requirement will increase cycle time, better evaluation of
suppliers. When a firm is required to decrease cycle time it would help analyze and fulfill
requirements of purchasing.
Why do firms no longer rely on competitive bidding when awarding purchase contracts?
- correct answer less suppliers in market, requires early procurement materials, cannot
determine risks and costs.
List documents which are covered by E-procurement tools. - correct answer Proper
purchasing document, cost free document, other supporting documents.
What are the advantages/disadvantages of E-Procurement tools? - correct answer
Advantage: No paperwork, time reduction, error reduction, communication
improvement, reductions in costs.
Disadvantage: push back from users, frictions and resistance, communication gap.
Why is it important to measure and monitor supplier performance improvement? -
correct answer ensure performance initiatives, manage purchasing of good and
services, identify opportunities and purchasing trends, support future purchasing
decisions.
How does just in time purchasing and production system reduce the need for certain
purchasing documents? - correct answer It gives a continuous amount of supply of
product or inventory to reduce documentation. Documents regarding warehouse and
transportation are not needed.
WITH ANSWERS #1
Why are more top managers recognizing the importance of purchasing/supply
management? - correct answer SCM improves relationship building and innovation,
improves reputation, time, competitive advantages, and operating cost of company.
What is the difference between purchasing and supply management? What is the
difference between supply chain orientation and supply chain management? - correct
answer Purchasing management is a functional group, it maximizes the organization
and is a process of managing purchase functions. Supply management is a process of
managing resources, its the present and future needs of the company, strategic/cross
functional approach of nature. Supply chain orientation is the managing of operating
activities. SCM is the managing the flow of the goods.
What is the difference between supply chain and value chain? - correct answer Supply
chain is the process of transfers material information from one place to another,
packaging and marketing not required, organizational orientated. Value Chain creates a
value and competitive advantage for company, storage and transportation not required,
involved packaging and marketing and is customer orientated.
Do you think organizational purchasers should behave like entrepreneurs? - correct
answer Organizational purchasers should behave like entrepreneurs to enhance
company profit margins and growth because of the responsibility for profit and loss of
business.
What are some of the factors which might influence how important purchasing is to the
success of the business? - correct answer Quality of good and service, availability of
resource, availability of alternative resource, level of competition.
What knowledge and skills are required for a purchasing professional? - correct answer
knowledge of supplier and company, purchasing strategies, time management to be
efficient, negotiation skills for prices.
Why does the collective behavior of supply managers have such an impact on
economic trends? - correct answer If similar goods are ordered the price will be
affected. Since supply managers have control of the price they have control of
economic trends.
Why are supply base innovation and risk management two future area that will consume
more of the supply managers day? - correct answer They are challenging tasks which
require detailed planning and time.
What are 4 enablers of purchasing and supply excellence? - correct answer Human
Resources, organizational design, information technology, measurement.
, How can an effective purchasing department affect organization appearance? - correct
answer optimal amount of purchasing will increase bargaining power which will reduce
cost, reduces defective goods, maintains minimal inventory.
Who are purchasing internal customers? - correct answer The employees of the
organization and internal users of the product.
Discuss the contributions a purchasing department can make to the corporate strategic
planning process. - correct answer procurement of materials, price evaluation,
compliance of policy.
List the areas that are typically within purchasing span of control. - correct answer
Spend Analysis, demand management and specifications, category management,
contract management, cost management and supplier management.
Describe how purchasing becomes aware of purchasing requirements? - correct answer
Quality guarantee, reasonable pricing, on-time delivery, safety, maintenance and
service.
How is anticipating a requirement or a need through purchasers involvement on new
product development different than reacting to a purchase need? - correct answer
Anticipating a material requirement will increase cycle time, better evaluation of
suppliers. When a firm is required to decrease cycle time it would help analyze and fulfill
requirements of purchasing.
Why do firms no longer rely on competitive bidding when awarding purchase contracts?
- correct answer less suppliers in market, requires early procurement materials, cannot
determine risks and costs.
List documents which are covered by E-procurement tools. - correct answer Proper
purchasing document, cost free document, other supporting documents.
What are the advantages/disadvantages of E-Procurement tools? - correct answer
Advantage: No paperwork, time reduction, error reduction, communication
improvement, reductions in costs.
Disadvantage: push back from users, frictions and resistance, communication gap.
Why is it important to measure and monitor supplier performance improvement? -
correct answer ensure performance initiatives, manage purchasing of good and
services, identify opportunities and purchasing trends, support future purchasing
decisions.
How does just in time purchasing and production system reduce the need for certain
purchasing documents? - correct answer It gives a continuous amount of supply of
product or inventory to reduce documentation. Documents regarding warehouse and
transportation are not needed.
