OM 300 FINAL EXAM CORRECT 100%
Outsourcing - ANSWERTransfers traditional internal activities and resources of a
firm to outside vendors
Utilizes the efficiency that comes with specialization
Firms outsource information technology, accounting, legal, logistics, and production
Vertical Integration - ANSWERdeveloping the ability to produce goods or service
previously purchased
Forward integration - ANSWEREX: Apple starting own retail stores
Backward integration - ANSWERpurchasing suppliers; EX: Apple deciding to
manufacture its own semiconductors
Four stages of supplier selection - ANSWERsupplier evaluation, supplier
development, negotiations, and contracting
Components of supply chain network - ANSWERsuppliers, manufacturers/service
providers, distributors, wholesalers/retailers, final customer
Many suppliers - ANSWERcommonly used for commodity products, purchasing is
typically based on price, suppliers compete with one another, supplier is responsible
for technology, expertise, forecasting, cost, quality, and delivery
Few suppliers - ANSWERbuyer forms longer term relationships with fewer suppliers,
create value through economies of scale and learning curve improvements, suppliers
more willing to participate in JIT programs and contribute design and technological
expertise, cost of changing suppliers is huge so risk of being stuck with each other
Four types of inventory - ANSWERraw material inventory, work in process inventory,
Maintenance/repair/operating supply (MRO) inventory, finished-goods inventory
ABC analysis - ANSWERClass A high annual dollar volume
Class B medium annual dollar volume
Class C low annual dollar volume
high shortage/holding cost, engineering, delivery, quality
Pareto Principle - ANSWER"critical few and trivial many"
Inventory holding costs - ANSWERHousing, Material-handling, labor, investment,
scrap
Purpose of the basic economic order quantity (EOQ) - ANSWERMinimize the total of
ordering and holding costs
Outsourcing - ANSWERTransfers traditional internal activities and resources of a
firm to outside vendors
Utilizes the efficiency that comes with specialization
Firms outsource information technology, accounting, legal, logistics, and production
Vertical Integration - ANSWERdeveloping the ability to produce goods or service
previously purchased
Forward integration - ANSWEREX: Apple starting own retail stores
Backward integration - ANSWERpurchasing suppliers; EX: Apple deciding to
manufacture its own semiconductors
Four stages of supplier selection - ANSWERsupplier evaluation, supplier
development, negotiations, and contracting
Components of supply chain network - ANSWERsuppliers, manufacturers/service
providers, distributors, wholesalers/retailers, final customer
Many suppliers - ANSWERcommonly used for commodity products, purchasing is
typically based on price, suppliers compete with one another, supplier is responsible
for technology, expertise, forecasting, cost, quality, and delivery
Few suppliers - ANSWERbuyer forms longer term relationships with fewer suppliers,
create value through economies of scale and learning curve improvements, suppliers
more willing to participate in JIT programs and contribute design and technological
expertise, cost of changing suppliers is huge so risk of being stuck with each other
Four types of inventory - ANSWERraw material inventory, work in process inventory,
Maintenance/repair/operating supply (MRO) inventory, finished-goods inventory
ABC analysis - ANSWERClass A high annual dollar volume
Class B medium annual dollar volume
Class C low annual dollar volume
high shortage/holding cost, engineering, delivery, quality
Pareto Principle - ANSWER"critical few and trivial many"
Inventory holding costs - ANSWERHousing, Material-handling, labor, investment,
scrap
Purpose of the basic economic order quantity (EOQ) - ANSWERMinimize the total of
ordering and holding costs
